The criminal liability of commercial legal entities is a form of legal responsibility, representing the adverse legal consequences a commercial entity must bear before the State for committing socially dangerous acts defined as criminal offenses under the Criminal Code. However, many businesses remain unaware of the applicable legal provisions, leading to unintended legal risks. To help clarify this matter, NPLaw provides key legal information regarding the criminal liability of commercial legal entities.
The criminal liability of commercial legal entities is a form of legal responsibility, representing the adverse legal consequences a commercial entity must bear before the State for committing socially dangerous acts defined as criminal offenses under the Criminal Code. However, many businesses remain unaware of the applicable legal provisions, leading to unintended legal risks. To help clarify this matter, NPLaw provides key legal information regarding the criminal liability of commercial legal entities.
I. Definition of a commercial legal entity
Under current legislation, a commercial legal entity is defined as:
- An entity whose primary objective is to generate profit, and such profit is distributed among its members;
- Includes enterprises and other types of economic organizations;
- Its establishment, operation, and dissolution must comply with legal regulations.
II. Principles for handling criminal acts committed by commercial legal entities
According to Article 3 of the Criminal Code 2015 (as amended in 2017), the handling of criminal acts committed by commercial legal entities is guided by the following principles:
- All criminal acts must be detected in a timely manner and addressed promptly, fairly, and in accordance with the law;
- All legal entities are equal before the law, regardless of ownership type or economic sector;
- Strict penalties are applied for sophisticated, professional, or deliberate acts that result in particularly serious consequences;
- Leniency may be considered for entities that actively cooperate with investigative authorities, voluntarily compensate for damages, or take proactive measures to prevent or mitigate harm.
. Legal provisions on criminal liability of commercial legal entities
3.1. Criminal proceedings
Under Article 436 of the Criminal Procedure Code 2015, commercial legal entities under investigation may be subjected to coercive measures, including:
- Seizure of assets related to the criminal act;
- Freezing of corporate bank accounts;
- Temporary suspension of operations;
- Mandatory payment of a monetary amount to secure enforcement of judgments.
3.2. Individual liability within the entity
Pursuant to Clause 2, Article 75 of the Criminal Code 2015, the criminal liability of a commercial legal entity does not exclude the criminal liability of individuals. It means that if the acts of certain individuals, such as members of the Board of Directors, meet all four elements constituting a crime, they will also be prosecuted in their personal capacity.
3.3. Sanctions against commercial legal entities
Sanctions that may be imposed on a commercial legal entity convicted of a criminal offense include:
- Monetary fines;
- Temporary suspension of operations;
- Permanent termination of operations;
- Prohibition from conducting business or operating in certain sectors;
- Prohibition from raising capital;
- Judicial measures applicable to commercial legal entities committing crimes.
Accordingly, for each criminal offense committed by a commercial legal entity, only one principal penalty shall be imposed, and one or several additional penalties may also be applied. In addition to these penalties, when handling a criminal case involving a commercial legal entity, the Court may decide to apply judicial measures as provided in Article 82 of the 2015 Criminal Code to such entities.
IV. Legal questions on criminal acts committed by commercial legal entities
4.1. Can authorities freeze an amount exceeding the maximum potential fine or compensation?
According to Clause 3, Article 129 of the Criminal Code2015 (amended 2017), only an amount corresponding to the maximum fine or compensation level may be frozen.
4.2. What coercive measures may be applied to commercial legal entities?
Coercive measures include:
- Asset seizure;
- Freezing of accounts;
- Temporary suspension of operations;
- Mandatory deposit of money to ensure enforcement of judgments.
4.3. When can a corporate seal be temporarily seized?
Under Article 36 of Decree 44/2020/NĐ-CP, the corporate seal may be temporarily seized when enforcing penalties such as temporary suspension of operations, prohibition from certain business activities, or restrictions on capital mobilization.
4.4. Are acts committed before 2018 prosecuted under the Criminal Code 2015?
According to Point h, Clause 1, Article 2 of Resolution 41/2017/QH14, commercial legal entities committing offenses before 00:00 on January 1, 2018 are prosecuted under the 1999 Criminal Code, without applying for the Code 2015.
4.5. What factors aggravate criminal liability for commercial legal entities?
Aggravating circumstances include:
- Collusion with other legal entities to commit crimes;
- Deliberately committing the offense to completion;
- Committing offenses two or more times;
- Recidivism;
- Exploiting special social difficulties to commit crimes;
- Using sophisticated or deceptive methods.
V. Legal defense and advisory services
Developing the right defense strategy is crucial to ensuring the best possible outcome in criminal proceedings involving commercial legal entities.
If you need in-depth legal advice or representation, NPLaw offers:
- Direct consultations;
- Phone and email advisory services;
- Professional defense representation throughout all stages of the proceedings.
With the guiding principle “Your Benefits – Our Priority”, NPLaw is committed to accompanying clients toward sustainable success.
