Introduction

Matrix organization

Mergers by absorption

Risks related to the expansion of the scope of criminal liability of legal entities

Validity conditions

Proof of delegation

Exemption from individual liability of delegator

Attribution of offense to legal entity

Delegations of authority

Criminal risk management within business organizations

Complicity in crimes against humanity

Breaches of secrecy

Personal data breaches

Theft

Extortion

Blackmail

Fraud

Misappropriation

Receiving/concealment of unlawfully obtained property (recel)

Attacks on automated data processing systems

Money laundering

Misappropriation by public official (concussion)

Corruption and influence peddling

Unlawful acquisition of an interest

Favoritism

Forgery and use of forgeries

Violation of Criminal Code

Offenses under the Monetary and Financial Code

Offenses under the Commercial Code

Environmental Code violations

Offenses arising from other codes

Types of offenses

Offenses under the Criminal Code, the Commercial Code, or the Environmental Code, Criminal procedure

White Collar Crime (en cours)

Misuse of corporate assets involves the diversion of assets, credit, powers, or votes, which are supposed to be managed by corporate officers in the exclusive interest of the company (Art. 1833 Civil Code). As such, misuse can only be committed to the detriment of the company, which must nevertheless meet a number of criteria for the offense to be established.
First, only companies with limited li …

Companies concerned

Misuse of corporate assets involves the diversion of assets, credit, powers, or votes, which are supposed to be managed by corporate officers in the exclusive interest of the company (Art. 1833 Civil Code). As such, misuse can only be committed to the detriment of the company, which must nevertheless meet a number of criteria for the offense to be established.

First, only companies with limited liability are concerned by the offense of misuse of corporate assets, where the partners are financially liable up to the amount of their contributions to the company's capital. Since the liability of the directors is limited to the payment of corporate debts, the risk for creditors of not having their claims repaid in the event of misuse of corporate assets is increased, as the share capital will have been abusively reduced. The entities specifically concerned include private limited companies (SARL), public limited companies with a board of directors or with an executive board and supervisory board (SA), single-member private limited companies (EURL), simplified joint-stock companies (SAS), and semi-public companies. While the managers of companies with unlimited liability—where the contribution to losses is not capped at the amount of the capital contribution—do not fall within the scope of the offense, they may nevertheless be prosecuted on the basis of breach of trust. This applies, for example, to civil companies or associations.

Next, the commercial company must have legal personality. As such, in accordance with Article L. 210-6 of the Commercial Code, it must be registered in the trade and companies register (RCS). The classification of misuse of corporate assets cannot therefore be applied against companies in formation  or annulled , which do not have legal personality.

Finally, French law must be applicable to the company in question. Thus, de facto excluded are foreign law companies that are neither provided for nor governed by French law and for which the offense of breach of trust will apply . However, the operation of a company according to a customary context does not justify excluding the application of provisions on commercial companies and the offense of misuse of corporate assets . Similarly, if the provisions of the Commercial Code do not apply to companies whose registered office is not located in France (Art. 1837 Commercial Code), French law applies when the company's actual registered office is located in France  or when the company conducts the majority of its business and has a place of business on national territory .

Cass. crim., 10 May 1993, LawLex202300007500JBJ.

Cass. crim., 9 March 2005, LawLex202300007499JBJ; 28 September 2016, LawLex202200001551JBJ.

Cass. crim., 3 June 2004, LawLex202300000036JBJ.

Cass. crim., 9 March 2005, LawLex202300007499JBJ.

Cass. crim., 31 January 2007, LawLex202200006439JBJ, which classifies as a French company the company whose registered office is abroad, but in which a French company holds a majority stake, which has an establishment in France registered with the commercial register, whose president resides in Paris, and whose decisions to grant fraudulent advances were made in premises in France.

Cass. crim. 2 March 2021, LawLex202200011519JBJ.

White Collar Crime (en cours)

197. Companies concerned

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

197. Companies concerned

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise