Corporate Crimes and Criminal Liability

Introduction
The popularity of corporate form of organizations like corporations and companies for running the business is growing day by day.

However, along with the growth of companies, both private and public, different types of corporate crimes are also increasing everyday. Corporate crimes in the form of fraud, forgery, misrepresentation, tax evasion, fund embezzlement, statutory offences and many other kinds of offences may take place.

Corporate Crimes
Corporate crimes cannot be looked at in a narrow manner. It covers a wider area of criminal offences. It not only deals with crimes which include false and misleading advertising, illegal exploitations of employees, mislabeling of goods, violation of weights and measures, selling adulterated foodstuffs and evading corporate taxes, but also socio-economic crimes like bribery and corruption, misappropriation of funds, frauds, embezzlement, black marketing, profiteering and hoarding, smuggling and violation of foreign exchange. It is no longer limited in its nature and scope. Therefore, any corporation may be involved in any kind of above-mentioned crimes.

Corporate Criminal Liability
The question of imposing criminal liability to a corporation for criminal offences committed by directors, managers, officers and other employees of the corporation while conducting corporate affairs has gained a lot of importance in the jurisprudence of criminal law. The very basis for the possibility of imposing criminal liability to a corporation is its independent legal personality.

Now the question is whether a corporation as an artificial person is capable of committing a crime and is criminally liable by the law or not. The traditional view was that a corporation could not be guilty of a crime, because criminal guilt required intent and a corporation not having a mind could form no intent. In addition, a corporation had no body that could be imprisoned.

Courts are especially likely to impose criminal liability on a corporation when the criminal act is requested, authorized, or performed by the board of directors, an officer or another person having responsibility for formulating company policy or high level administrator having supervisory responsibility over the subject matter of the offence and acting within the scope of his employment.

Though a corporation may be characterized as a 'person' capable of a crime, the theoretical difficulty of attributing a criminal intent - a required element of most criminal offences - to non-human, artificial entities create problems in the process. At the same time it is also argued that though the corporation is a legal person, its true responsibility can be located in its organizational structure, policy, procedures and culture. Therefore, imposing corporate criminal liability on the basis of the fault of the directors or senior corporate managers who are identified for such purposes as the corporation has also been raised for deliberation. Here the question of "directing minds" arises. In fact, the issue of corporate criminal liability has mostly focused on the problem or articulating a test or mechanism for locating a corporation's "directing minds" so that the criminal intent of the directing minds can be attributed to the corporation.

Theories of Corporate Criminal Liability
Three devices have been used, in different contexts, to hold corporations criminally liable for true crimes and regulatory offences. The first device is vicarious liability and the second is the identification theory. A third device - locating fault in the corporation's organizational structure, policies, culture and ethos which permitted or encouraged the commission of the crime - has been advocated by legal theorists such as Fisse and Wells.

Traditional doctrine of vicarious liability holds the master (or employer) liable for the acts of the servant (or employee) in the course of the master's business without proof of any personal fault on the part of the master. This is because vicarious liability does not require proof of personal fault on the part of the master. The master can be either an individual or a corporation.

Under the second device, the identification theory, the acts and state of the directing minds are identified as the corporation. The corporation is considered (fictionally) to be directly liable, rather than vicariously liable if mind of certain senior officers in a corporation - the directing minds of the corporation- are deemed to be the acts and state of mind of the corporation. The identification doctrine arose out of the perceived need to find a way to hold corporations liable for mens rea offences.

Rationale for Adoption of Corporate Criminal Liability
The rationale for adoption of the concept of corporate criminal liability is that the human agents running the corporations or companies began to cheat or defraud the public and even the government, knowing that law will not pursue a corporate body for the criminal acts of its directors and employees. It went against the intention of the legislators as conceived of. Corporate bodies reap all the advantages flowing from the acts of the directors and they act to the detriment of the public in the name of the corporate bodies. Since the companies are legal entities, they are open to prosecution and indictment for criminal acts of its directors and employees. Thus, the gravity of harm caused to the community and to the individuals by human agents with the help of sophisticated scientific and technical measures warranted such a change, which not only needs to be kept up but also tightened for the general good.