Can a Corporation Be Charged With a Crime
Can a corporation be charged with a crime? As legal entities, modern corporations can be charged for the crimes they commit.3 min read
Can a corporation be charged with a crime? As legal entities, modern corporations can be charged for the crimes they commit. They can also sue others and be sued, though historically, this was not the case. While they're independent entities, corporations can't act on their own behalf, so one of the corporation's agents — like a director or board member — has to perform any actions. When the action is done within the scope of that person's employment, then the corporation can be held liable for what the agent did.
Common Types of Corporate Crime
The prosecutor has to prove what was done illegally, that the agent of the corporation acted as part of his or her duties, and that it was done with the specific intention of providing benefit to the corporation. Corporate-level crimes are often white-collar offenses, such as:
- Antitrust violations
- Corporate fraud
- Securities violations
Another common corporate crime is environmental, especially for manufacturing corporations in industrial settings.
Penalties for Corporate Crimes
One of the most effective ways to punish the corporation for corporate crime is by assessing a monetary fine and making the corporation pay restitution to the victims. The corporate agent, however, might face prison time for the crimes.
The Decision to Prosecute
The decision about who to charge, whether the agent or the corporation, falls on the prosecution. The prosecution does have the option to press charges against both the corporation and individual agents involved. However, the prosecutors are also required to prove which entity committed the crime, and they are also required to prove each detail of the crime beyond all shadow of a reasonable doubt.
The process of deciding to charge a corporation with a crime is similar to the process of deciding to charge an individual with a crime. The prosecution sifts through the information and details, considering things like whether the evidence is sufficient, whether the case would likely succeed if it goes to trial, and past crimes and unethical behavior the corporation might have committed. Sometimes sanctions, which are not criminal penalties, might be imposed.
Conditions of Finding a Corporation Guilty of a Crime
Even though corporations aren't people, legally a corporation is treated as if it were an individual in some cases. The corporation can be held liable for and found guilty of a crime if
- If the corporation's agents do something criminal while working,
- Are responsible for the details of the crime,
- And commit the crime in question for the profit of the corporation rather than for their own profit.
Knowingly Engaging in Crime
For a corporation to be found guilty of a crime, every detail of the crime has to have been committed by the corporation's agents. The prosecution has to prove the corporation's agent, or agents, knowingly engaged in each of the crime's elements, if more than one person acted illegally on behalf of the corporation. When dealing with a small business, this is usually fairly simple.
As an example, if one of the small company's workers uses poor quality parts that were purchased by the business partner, with full knowledge of their substandard quality, then both the person who purchased the substandard parts and the one who installed them are performing a fraudulent act and are standing as agents of the corporation when committing the crime.
Even if the Owners Don't Know
If the corporation's owner embezzles from the company, the owner benefits from committing the crime but the company doesn't. That means the company isn't guilty of the crime. The owner is guilty of the crime. If one of the bosses, however, has the employees do something illegal, like dumping hazardous waste to save money on disposing of it, then the company benefits and is, therefore, the guilty entity in the crime.
The company is guilty even if the owners and shareholders don't know that the manager has done the illegal thing. If the company's agents commit a crime to benefit the company, then the company can still be held liable and found guilty, even if the owners had nothing to do with the crime.
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