Can a company be prosecuted criminally? Absolutely. Legal entities simply have their own criminal liability. This liability must always be distinguished from that of the natural persons (such as company directors) who acted or failed to act on behalf of the company.
Which companies are liable to prosecution?
In principle, any legal entity can be held liable by a criminal court. This has not been the case for very long. Until the legislative change in 2018, public law entities such as the Belgian State, the regions, the cities… were not considered legal entities (just like de facto associations such as trade unions and political parties). Now, these public law entities do belong to the club of legal entities with criminal liability.
The expansion by the legislator does require some nuance, as the intervention of the criminal judge with regard to these public law bodies remains limited. Only the pronouncement of a “simple declaration of guilt” is possible. So no heavy sanctions for the city or the municipality.
For which offences can a company be punished?
A legal entity is only criminally liable for committing two “types” of offences. The first category concerns offences that have an intrinsic link to the realisation of its purpose or the protection of its interests. Think of a company that advises its clientele on interesting investments, and then sells shares based on a fake agreement. The second category of offences concerns those which, as will be apparent from the specific circumstances, were committed on its behalf. This could include the falsification of the annual accounts.
The criminal liability of a legal entity will be established as soon as the commission of the offence either follows from a knowing and willing decision taken within the legal entity, or is the result of negligence committed within this legal entity.
Can the company director also be punished alongside the company?
It is not inconceivable that both the company and the company directors end up in the dock.
Until 2018, a company and the natural person could only be convicted together if the offence was committed intentionally. This was different for non-intentional offences. In that case, only the company or the natural person could be convicted, depending on who committed the most serious fault (non-cumulation rule).
Since 2018, the non-cumulation rule has been abolished. Since then, legal entities and natural persons can be convicted together for both intentional and non-intentional offences.
Conclusion
The criminal liability of companies can no longer be ignored in our legal system. Entrepreneurs and companies are therefore increasingly confronted with their criminal liability. We also see this in legislation: there are hardly any economic, social, tax and environmental laws left that do not include criminal provisions.
Companies must be aware of the criminal liability that rests on both the company and the management.
If this awareness comes too late, a criminal conviction is lurking around the corner.
We can assist you and your company both in preventing criminal liability and in criminal proceedings and all steps in between.
Feel free to contact us with any additional questions.