Offences by entrepreneurs and legal persons

Liability of a legal person for an offence

Legal persons are granted legal personality from their creation until their dissolution. During this period, a legal person may perform legal acts, acquire rights and obligations and act unlawfully. The liability of a legal person for an offence is conceived as strict liability. This is a significant difference from the liability of a natural (non-business) person and means that fault is not considered here.

Liability of a legal person for an offence therefore arises if the following conditions are met:

• there is a breach of an obligation imposed by law on the legal person,
• the obligation is breached by a natural person whose conduct is attributable to the legal person,
• the breach of the obligation occurs in the course of the activities of the legal person, in direct connection with its activities, for the benefit of the legal person or in its interest.

1) Breach of an obligation imposed on a legal person

The offences that apply to legal persons are either directly stated in the law in this way, i.e. in the sense of “a legal person commits an offence by…”, or the obligation is imposed by the law in general, but may also apply to a legal person, which usually follows from other provisions of the law.

2) Conduct attributable to a legal person

Conduct attributable to a legal person means the conduct of certain natural persons who are responsible for either the management or the operation of the legal person. At the same time, however, it is not necessary to know their identity; it is not examined whether the conduct was culpable or not.

Example: under the Consumer Protection Act, a seller commits an offence by failing to indicate the destination and date of delivery on the proof of purchase of a product in the case of a sale with subsequent delivery. If the insufficient document is secured in this way, the employee who issued it is not identified for the purposes of punishing the offence. A fine may be imposed only on the basis that it is apparent that the document was issued by the legal person concerned. Whether an internal investigation is subsequently carried out and, for example, the employee’s liability for damages is inferred from the situation is completely irrelevant to the offence.

Similar examples could be the serving of alcohol to minors in a restaurant, etc.

The Misdemeanour Act provides an exhaustive list of persons whose conduct is imputable to a legal person for the purposes of misdemeanour law. This is a rather broad list, which includes the following persons:

• a statutory body or a member of a statutory body,
• another body of the legal person or a member thereof,
• an employee or a person in a similar position in the performance of tasks arising from that position,
• anatural person who performs the tasks of a legal person – the performance of a task is to be understood as ‘any task undertaken on the basis of instructions from a legal person (e.g. an employer), even if the instruction is an instruction encouraging a breach of a legal norm,
• anatural person used by a legal person in the course of its activities, or
• a natural person who has acted on behalf of the legal person, if the legal person has benefited from the result of such action.

3) The breach of duty occurred in the course of the activities of the legal person

The breach of duty occurred in the course of the activities of the legal person, in direct connection with the activities of the legal person or for the benefit of the legal person or in its interest.

In contrast to the previous case, we can imagine a situation where the managing director of a company commits a traffic offence in his personal car and at his leisure, which is in no way related to the activities of the legal person. He will therefore be liable for it as a natural person.

All of the above conditions must be met for the liability of a legal person to arise.

Concurrent liability of a legal and natural person for an offence

The Act on Misdemeanours introduces an interesting concept of concurrent liability, according to which separate proceedings can be conducted on the liability of a legal entity and a natural person for the same offence. This is not a violation of the principle of double punishment for one act, precisely because the subject is different each time.

However, a legal person may be exonerated from liability for an offence if it proves that it made all the efforts that could be required of it to prevent the offence. As an example, in the explanatory memorandum the legislator mentioned various preventive measures, training and checks on employees.

Liability of a natural person in business for an offence

An entrepreneurial natural person can typically be thought of as a sole trader or a natural person in a similar position. Liability is again (as with a legal person) conceived as objective, i.e. irrespective of fault. It is therefore irrelevant whether the offence was committed intentionally or negligently. This is the fundamental difference between the assessment of offences committed by natural persons engaged in business and those not engaged in business.

The following conditions must be met:

• there is a breach of an obligation imposed by law on a natural person in business or on a natural person in general – it is not necessary that the law imposes the obligation on the natural person in business in the first place,
• the obligation is breached by a natural person whose conduct is attributable to the natural person in business,
• the breach of the obligation occurs in the course of the activities of the natural person carrying on business, in direct connection with the activities of the natural person carrying on business, for the benefit of the natural person carrying on business, or in the interests of the natural person carrying on business – at this stage it is crucial whether the activities of the natural person carrying on business are involved. Similarly to a legal person, a sole trader may commit, for example, disturbing the peace during a private party. In such a case, however, the conduct is not ‘acting in the course of the business of a natural person’, so he would be liable as an ordinary natural person and culpability would have to be proved.

Theoretically, we can also imagine a situation where a sole trader has committed a certain act, which has the characteristics of an offence of a natural entrepreneur, but outside the context of his business. However, the law regulates the relevant facts exclusively for natural persons engaged in business. In such a case, an act committed by a natural person engaged in business outside the context of his business would not be punishable.

A person whose conduct is attributable to an entrepreneurial person is deemed to be a person under the Offences Act:

• an employee or a person in a similar position in the performance of the tasks arising from that position,
• a natural person who performs the tasks of a natural person engaged in business;
• a natural person used by an entrepreneurial natural person in the course of his or her business;
• a natural person who has acted on behalf of the natural person in business, if the natural person in business has benefited from the result of such action.

An entrepreneurial natural person shall not be liable for an offence if he proves that he has made all the efforts that could be required of him to prevent the offence.

Circumstances precluding unlawfulness

As in the case of natural (non-business) persons, circumstances precluding unlawfulness may apply to business persons and legal persons. These include necessary defence, extreme necessity, the consent of the injured party, the legitimate use of a weapon, and permissible risk.