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Ronald C.

Lara Business Organization II: Private


Corporation Law
Fourth Year Atty. Alizedney M. Ditucalan, LL.M.
MSU Law, Iligan Extension Class

Can A Corporation Commit Criminal Liability?

By virtue of its being a mere fiction of law, the general rule is that a corporation by
itself cannot be held criminally liable. This is precisely because of the nature and
character of both Criminal Liability and of the Corporation. However, like any other
general rules, such is subject to certain exceptions.

A corporations legal existence is sourced from a law which recognizes it and


confers upon it certain rights, while at the same time imposes certain limitations
and obligations. As a consequence, the Corporation acquires a juridical personality
which is separate and distinct from that of its shareholders or members, as the case
may be, or from any other legal entity to which it may be connected or related. It
can also enter into contracts, sue or be sued, possess and dispose properties and
perform any lawful endeavor subject to the restrictions imposed upon it by law.

However, because it is only an artificial being, a corporation is devoid of corporal


existence. It cannot exercise its granted rights and attributes on its own. It decides
and set business policies and direction through its so called directing minds,
usually called the Board of Directors (BOD) or Board of Trustees (BOT), and executes
the same through a myriad of agents and employees. This means that a
corporation, by itself, is just an abstract entity and without volition.

These characteristics of a corporation make it, generally, not capable of incurring


criminal liability. Accordingly, criminal liability is generally made up to two (2)
elements, namely: (1) the guilty act or omission known as the actus reus, and the
(2) prohibited state of mind or guilty mind known as the mens rea. The mental
element requires the proof of an intention on the part of the person who commits
the criminal act. Since the corporation has no soul, it therefore cannot have a
wicked intent.

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Ronald C. Lara Business Organization II: Private
Corporation Law
Fourth Year Atty. Alizedney M. Ditucalan, LL.M.
MSU Law, Iligan Extension Class

Thus the public policy that a crime committed in the name of the corporation is
attributed to those individuals who actually act for and in behalf of the corporation.
Where a law requires a corporation to do a particular act, failure of which on the
part of the responsible officer to do so constitutes an offense, the responsible officer
is criminally liable therefore. If the business itself involves a violation of law all who
participate in it are liable. Corporate officers or employees, through whose act,
default or omission the corporation commits a crime, may themselves be
individually held answerable for the crime 1. However, a director or officer can be
held liable for a criminal offense only when there is a specific provision of law
making a particular officer liable because being a corporate officer by itself is not

enough to hold him criminally liable.

On the other hand, by way of exception to the general rule, certain laws are being
enacted enabling Corporations to commit criminal liability. This is made possible by
a direct provision of the law, such as those found in the Anti-Dummy Law, Trust
Receipts Law and Anti-Money Laundering Act, making corporations criminally liable 2.

In this case, since Corporations cannot be arrested and imprisoned, the law imposes
the penalty of fine. When the statute prescribes both fine and imprisonment as
penalty, the corporation may be made liable with respect to the fine and the
responsible officers are imprisoned.

In the Anti-Money Laundering Law of 2001, lawmakers defined offenders as any


person who commits a money laundering offense and proceeded by defining a
person as any natural or juridical person. The law obligated covered
institutions, such as banks, to, among others, report covered transactions and

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MANUEL C. ESPIRITU, JR., AUDIE LLONA, FREIDA F. ESPIRITU,CARLO F. ESPIRITU, RAFAEL F. ESPIRITU,
ROLANDO M. MIRABUNA, HERMILYN A. MIRABUNA, KIM ROLAND A. MIRABUNA, KAYE ANN A. MIRABUNA,
KEN RYAN A. MIRABUNA, JUANITO P. DE CASTRO, GERONIMA A. ALMONITE and MANUEL C. DEE, who are
the officers and directors of BICOL GAS REFILLING PLANT CORPORATION, Petitioners, - versus - PETRON
CORPORATION and CARMEN J. DOLOIRAS, doing business under the name KRISTINA PATRICIA
ENTERPRISES, Respondents. G.R. No. 170891, November 24, 2009.
2
Memory Aid 2016 for Commercial Law. San Beda College of Law Centralized Bar Operations.

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Ronald C. Lara Business Organization II: Private
Corporation Law
Fourth Year Atty. Alizedney M. Ditucalan, LL.M.
MSU Law, Iligan Extension Class
suspicious transactions to the Anti-Money Laundering Council (AMLC) within five (5)
working days from occurrence. Further, it categorizes non-performance of such
obligation, e.i. non disclosure and filing of report to AMLC, as among the acts

punishable3. Just very recently, the Rizal Commercial Banking Corporation (RCBC) is
slapped with a fine of one (1) Billion Pesos for its involvement in the Bangladesh
Bank Cyber heist. Accordingly, RCBC failed to act immediately despite Bangladeshs
warnings that the transactions were suspicious, as well as their later requests for
the transfer to be stopped4.

In the case of Ching versus Secretary of Justice, 481 SCRA 602 (2006), the Supreme
Court said:

A crime is the doing of that which the penal code forbids to be


done, or omitting to do what it commands. A necessary part of
the definition of every crime is the designation of the author of
the crime upon whom the penalty is to be inflicted. When a
criminal statute designates an act of a corporation or a crime
and prescribes punishment therefor, it creates a criminal
offense which, otherwise, would not exist and such can be
committed only by the corporation. But when a penal statute
does not expressly apply to corporations, it does not create an
offense for which a corporation may be punished. 5

3
RA No. 10365. An Act further strengthening the Anti-money Laundering Law, amending for
the purpose Republic Act No. 9160, otherwise known as the anti-money laundering act of
2001.
4
www.cnnphilippines.com/business/2016/08/05/BSP-fines-RCBC-P1billion-over-laundering-
scam.html
5
ALFREDO CHING, Petitioner, vs. THE SECRETARY OF JUSTICE, ASST. CITY PROSECUTOR ECILYN
BURGOS-VILLAVERT, JUDGE EDGARDO SUDIAM of the Regional Trial Court, Manila, Branch 52; RIZAL
COMMERCIAL BANKING CORP. and THE PEOPLE OF THE PHILIPPINES, Respondents. G. R. No. 164317,
February 6, 2006.

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