The Penal Code, pursuant to Article 296, provides for the liability of persons holding managerial positions for acts committed against the entity they manage. This means that management staff whose actions or omissions effectively lead to property damage at the entity they manage must be held criminally liable. Between 1999 and 2020, 13,618 proceedings were initiated, of which 6,272 concluded with a finding of a crime.
Subject of protection
Through Article 296 of the Penal Code, the legislator aims to protect proper, reliable, and honest economic transactions. In particular, the protection covers the property interests of managed entities in civil transactions. Committing the crime of abuse of trust involves the abuse of authority or failure to fulfill obligations. It should be emphasized that abuse of authority occurs when a person managing another person's assets acts beyond their authority, exceeding their competence.
The crime of fraud is a substantive offense. This means that there must be a specific consequence, such as causing property damage or creating an immediate threat of significant property damage. Such consequences could include, for example, the sale of property at a reduced price or the economically unjustified transfer of property to a third party.
Who can be the perpetrator of the crime of acting to the detriment of the company?
The crime of abuse of trust is an individual offense. This offense can only be committed by a person obligated by statute, a decision of a competent authority, or a contract to manage the property or business activities of a natural person, a legal person, or an organizational unit without legal personality. Therefore, the perpetrator of this offense can only be a manager undertaking their actions as part of managing an enterprise. Criminal liability under Article 296 of the Penal Code also applies to those members of management who, while being aware of the need to perform certain actions arising from the principles of rational action related to the nature of their function and the activities performed to ensure the accuracy and correct execution of assigned tasks, fail to perform them properly, knowing that these actions constitute the basis for final decisions regarding the broader scope of managing the property or business activities of the entities listed in this provision, thus causing them significant or extensive financial damage.
Therefore, the perpetrator of the crime of abuse of trust may be, for example:
- member of the supervisory board,
- member of the board,
- member of the board of a foundation, association,
- general partner in a limited partnership,
- trustee, liquidator.
Penalties
Basic type (Article 296 § 1 of the Penal Code)
Committing a crime under these conditions is punishable by imprisonment from 3 months to 5 years.
Privileged type (Article 296 § 1a of the Penal Code)
Committing a crime under these conditions is punishable by imprisonment for up to 3 years.
Qualified type (Article 296 § 2 of the Penal Code)
Aggravated type of crime is characterized by additional motives in the perpetrator's actions, i.e., acting to obtain financial benefits for oneself or for another. Committing a crime under these circumstances is punishable by imprisonment from six months to eight years.
Qualified type "second degree" (Article 296 § 3 of the Penal Code)
The perpetrator causes significant damage, meaning damage whose value at the time of the offense exceeds PLN 1,000,000. Committing an offense under these circumstances is punishable by imprisonment for one to 10 years.
Mismanagement (Article 296 § 4 of the Penal Code)
If the perpetrator of the offence specified in § 1 or 3 acts unintentionally, he or she shall be subject to the penalty of deprivation of liberty for up to 3 years.
It is also worth pointing out the content of Article 296 § 5 of the Penal Code, as anyone who voluntarily redressed the damage in full before the initiation of criminal proceedings is not subject to punishment.
How to properly take care of the interests of the managed entity?
People in management positions in enterprises, especially company boards, should pay attention to these issues within their organizations. It's important to consider whether decisions are justified economically and commercially, and whether actions taken are based, for example, on appropriate asset valuations.
It is also worth taking a closer look at the scope of authorizations and powers to act, in particular what is the scope of competences granted under concluded contracts and what is the scope of competences designated by law, e.g. in relation to members of the management boards of capital companies.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of February 28, 2023
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