A corporation is an entity, something that exists only through its employees. However, a corporation can be vicariously liable for criminal activity unless it is a limited liability corporation (LLC). For example, a corporation can be criminally liable under these circumstances:
A corporation can be held liable for the criminal acts of it's employees as long as the employees are acting within the scope of employment and their conduct benefits the corporation. A corporation cannot be imprisoned or punished like individuals. However, there are ways to punish a corporation, such as:
To act within the scope of his or her employment, the corporate employee must have permission or the actual authority to act on the corporations behalf. A corporate authority who is acting within his or her corporate duties and engaging in corporate activities that is related to the corporation would be acting within the scope of their employment. If there is a rational relationship between the employee's criminal act and his or her corporate duties, then the corporation will be criminally liable for the employees conduct
When a corporation is criminally liable, the responsibility also falls on individuals. The board of directors, officers, and other high-ranking officials will almost always be criminally liable as well (just look at the Enron fiasco). A individual can be held criminally liable for another employee's illegal act under the accomplice liability theory. If an individual aids, encourages, assists, or instructs another employee to commit or engage in a criminal conduct, they can also be held liable for the employee's criminal act.
Subordinates or supervisors who have a duty to look after other employees and know or should know that an employee is engaging in criminal conduct within the scope of their duties can also be held liable if they turn a blind eye and fail to take action to prevent the conduct.
A corporate who is held criminally liable for it's employees criminal conduct may suffer financially and criminally. Everyone in the corporate entity may be held liable for the criminal activity including officers, directors, and the corporation itself. The penalties may include:
Laws governing corporate responsibility are different in every state. Which state laws are applied depends on where the company was incorporated. An experienced business attorney can inform you of the local laws, your rights and defenses, and the best way to proceed in a criminal trial. If you were a victim of a corporation's actions, contact an experienced attorney to get compensation for your loss.
Last Modified: 04-18-2018 07:36 PM PDTLaw Library Disclaimer
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