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Laws relating to corporate criminal liability

Author: 
Shrishaila B Mudhol
Subject Area: 
Social Sciences and Humanities
Abstract: 

A company can only act through human beings and a human being who commits an offence on account of or for the benefit of a company will be responsible for that offence himself. The importance of incorporation is that it makes the company itself liable in certain circumstances, as well as the human beings” - Glanville Williams. The evolution of the concept of corporate criminal liability in India can be classified as a long processing effort from the judiciary to fix responsibilities on non-fictitious persons. Initially, the corporations were considered incapable of committing crimes, but with globalisation and liberalisation came a shift in the societal wherein corporations were seen as being involved in committing (almost all) white collar crimes. Criminal liability encompasses two elements: actusreus (guilty act) and mensrea (guilty mind). There is no dispute that a company is liable to be prosecuted for criminal offences. However, the company being an artificial person cannot have the requisite mensrea, hence the question whether a company could be prosecuted for an offence for which the mandatory sentence is imprisonment. Corporate criminal liability explains vicarious liability and the identification principle as well; it is an important item on the agenda of legislators and legal practitioners to inculcate. In general terms, it refers to the imposition of criminal liability on a company or its employees for an illegal act. The Indian law on corporate criminal liability is not confined to the general criminal law under the Indian Penal Code (IPC), 1860, but is scattered across several statutes, including The Companies Act 2013, Money Laundering Act 2002, and The Prevention of Corruption Act 1988. The Negotiable Instruments Act, 1881, and The Information Technology (IT) Act, 2000. Due to the rapid pace of globalization of business and evolution of transnational corporations, it has become very essential to determine the concept of corporate criminal liability and the present paper discusses the laws relating to corporate criminal liability and to what extent they are regulating the wrongs done by corporations.

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