In today's article, we will examine the crime of so-called "false bankruptcy." The issue of criminal liability for hindering creditors from pursuing their claims has been recently addressed in our series. Continuing our discussion of this topic, we will analyze below another punishable form of debtor avoidance of their obligations.
Subject of protection
The primary and direct subject of protection under Article 301 § 1 of the Penal Code is the economic interests of creditors, understood as the ability to satisfy their claims. Importantly, the basis of the claims is irrelevant, i.e., they arise from a contractual or delicto obligation.
In general terms, the provision is intended to protect broadly understood economic transactions and ensure that such transactions are reliable and fair.
The phenomenon criminalized by Article 301 § 1 of the Penal Code largely corresponds to the criminal acts covered by Article 300 § 1 and 3 of the Penal Code, with the difference that in the provision in question, the manner in which the perpetrator carries out the prohibited act is different – by establishing a new business entity and transferring assets to it. Additionally, the number of creditors harmed by the debtor is different (the offense incriminated by Article 301 § 1 of the Penal Code applies to a debtor who has several creditors).
Responsible entity, characteristics of the subjective side, characteristics of executive actions
The perpetrator of the crime in question may be a debtor with multiple creditors. As legal doctrine indicates, a plurality of creditors means at least three. However, there is no regulation that would limit this number of creditors by establishing a "limit."*
As indicated above, the elements of the offense specified in Article 301 § 1 of the Penal Code include: establishing a new business entity and transferring assets to it. Importantly, under the provision in question, anyone who transfers assets to an existing entity is not liable. Considering the content of the provision, it should be recognized that "establishing an entity" should not be understood as a change in the legal form of an existing entity—for example, transforming a partnership into a corporation.
The effect of the above actions by the debtor, within the meaning of this provision, is to prevent or limit the satisfaction of existing claims. As legal doctrine indicates, it is irrelevant in this case whether all of the debtor's creditors are harmed. It is sufficient that a few of them are harmed**.
The offence under Article 301 § 1 of the Penal Code may only be committed intentionally, with direct or eventual intent .
Threat of punishment, penal measures and prosecution procedure
The offense incriminated in Article 301 § 1 of the Penal Code is a misdemeanor punishable by imprisonment for a term of three months to five years. If the perpetrator committed the act for the purpose of obtaining financial benefit, or if he or she obtained such benefit, the court may impose a fine in addition to the prison sentence.
The offense specified in Article 301 § 1 of the Penal Code is a public prosecution offense, prosecuted ex officio.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of March 15, 2023
* M. Kulik [in:] The Penal Code. Updated commentary, ed. M. Mozgawa, LEX/el. 2023, article 301
** J. Majewski [in:] The Penal Code. Special part. Volume III. Commentary to articles 278-363 of the Penal Code, 5th edition, ed. W. Wróbel, A. Zoll, Warsaw 2022, article 301
