The word ” company ” has no strict legal meaning. It is clear that the term company implies an association of persons for some common object or objects. A company can therefore be described as an association of a number of persons united for economic purposes i.e to carry on business for gain.
However, the word ” company ” in this context is a more complicated one, therefore ” A company ” is recognised as a distinct legal person from its members which are either corporated or unincorporated.
The direct consequences of incorporation is that a registered company is hereby conferred with the privileges of corporate personality. The fundamental attribute of corporate personality is that the company is a legal entity distinct from its members. Hence it is capable of enjoying rights and being subject to duties which are not the same as those enjoyed or borne by its members. In other words, it has ” legal personality ”. It is a legal creation, an ” artificial person ” as opposed to a ” natural person ”. It is capable of suing and being sued in its corporate name. Whilst, an unincorporated association is not a legal person. Unlike a company, it can neither sue nor be sued in its own name, but its members may sue or be sued on its behalf.
Nevertheless, it used to be thought that a company, being an artificial person, cannot ( except in strict liability offences, i.e. Statutory offences ) be convicted of a crime. This belief was hinged on the fact that an artificial body is incapable of having the requisite mental element and intention necessary to ground a conviction. It has, However, been held in a number of cases that a company can be guilty of an offence and that the knowledge and intention of its agents or employees must be imputed to it. See M & K Ltd v. C. O. P ( 1958 ) W. N. L. R see also, D.P.P. v. KENT & CONTRACTORS LTD. ( 1944 ) K. B. 146.
A preliminary point to bear in mind is that it is not the act or knowledge of every agent or employee of the company which will be attributed to the company, but only of those whom the company has made its ” responsible officers ” for the action in question. See Tesco Supermarkets Ltd. v. Natrass ( 1972 ) A. C. 153. For example, a company can be criminally liable under these circumstances :
If the criminal act by the employee or agent was within the ” scope of employment ”.
A statute(s) defines what crimes a company is liable for i.e failure to perform an affirmative duty.
Company’s must perform certain duties under the law. Failure to perform such duties can result in criminal liability. For example, a company will be guilty of Tax evasion if it doesn’t pay taxes.
HOW CAN A COMPANY BE LIABLE FOR CRIMINAL ACTS ?
A company 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 company. A company cannot be imprisoned or punished like individuals. However, there are ways to punish a company such as:
Fines
Loss of business license(s)
Regulation by government agencies.
IF A COMPANY IS CRIMINALLY LIABLE, ARE INDIVIDUALS PUNISHED ?
When a company 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. An 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 be held liable for the employee’s criminal act.
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.
Written By: Akinola Michael. A
Written By: Akinola Michael. A
