The mere registration of a person as a director in the Commercial Registry does not prove that an offence has been committed, that the director knew of the facts, or that he or she took part in them, even where the company he or she administers is under investigation. Nevertheless, in forensic practice the office is frequently relied upon as the first ground for bringing charges and, at times, as the only one.
A director is not necessarily liable for everything the company does.
This article examines why the merely formal status of a director cannot operate as proof of intent or of participation, even where offences have allegedly been committed within the company, and which lines of defence can prevent that equation.
Article 31 of the Spanish Criminal Code Establishes No Presumption
Article 31 provides that anyone who “acts” as a de jure or de facto director of a legal entity is personally liable, even if he or she does not personally possess the qualities that the definition of the offence requires of the perpetrator, provided that those qualities are present in the company. It is a rule extending liability as perpetrator to company directors, designed for special offences (offences that can only be committed by persons holding a particular status), which prevents conduct carried out from within the company from going unpunished where the status of debtor, taxpayer or employer lies with the entity and not with the natural person who decides on its behalf.
The key lies in what the provision does not establish: it does not make the director a perpetrator merely by virtue of holding that office, it does not reverse the burden of proof, and it contains no presumption of guilt. For the director to be liable, the conduct constituting the offence must have been carried out by him or her, with all the objective and subjective elements the offence requires, including intent. All that Article 31 of the Criminal Code supplies is the special status required of the perpetrator (for example, that of debtor or taxpayer), which is present in the company and not in the natural person acting on its behalf.
The wording of the provision is significant: liability attaches to the person who acts. The rule is aimed at whoever takes part in the conduct in his or her capacity as a director, not at someone who holds the office without taking part in it.
Intent and Participation: Subject Matter and Burden of Proof
From the principle of culpability it follows that there is no punishment without intent or negligence (Article 5 of the Criminal Code) and, from the right to the presumption of innocence (Article 24.2 of the Spanish Constitution), that it falls to the prosecution to prove every element of the offence, including the mental element. Applied to a director, this requires proof, in respect of each person under investigation, of three matters: that he or she knew of the conduct, that he or she wished or accepted that it be carried out, and that he or she contributed to it by a criminally relevant act or omission.
The office, taken alone, proves none of these. It may constitute circumstantial evidence, insofar as a person who exercises real functions has access to information and decision-making power; but a circumstance is not proof, and proof by inference requires fully established basic facts and a reasonable inference, not a simple equation of office with knowledge.
A consequence of the definition of the offence is frequently overlooked. Many economic and corporate offences, such as tax offences, are punishable only where committed intentionally. As these offences have no negligent form, there is no offence without intent: a director who was unaware of the facts and failed to exercise due care is not punishable on that basis, without prejudice to any civil or administrative liability.
The prosecution seeks to overcome this difficulty by relying on conditional intent and on so-called wilful blindness, according to which a person who avoids acquiring knowledge accepts the risk of what occurs. These categories require proof that the person under investigation foresaw the specific possibility that the offence would be committed and chose not to find out; it is not enough to assert that he or she “should have known”.
The Case Law of the Supreme Court
The Criminal Chamber of the Supreme Court has established a clear doctrine: Article 31 of the Criminal Code is not a criterion for imposing liability by reason of office. The leading authority is Supreme Court Judgment no. 496/2020 of 8 October, delivered in proceedings for an offence against the Public Treasury committed within a sports public limited company. Its sixth, tenth and fifteenth legal grounds yield four ideas.
First: liability is not strict. The sixth legal ground states that Article 31 “is not a matter of strict liability by reason of office but requires that the responsible natural person has personally intervened, actively or by omission, in the specific activity giving rise to the criminal offence”.
Second: formal appointment is insufficient. The tenth legal ground (paragraph 10.2) reasons that, since Article 31 refers to the de facto director as opposed to the de jure director, “any attribution of liability by reason of the mere formality of the appointment is excluded, as regard must be had to its substance, to the real exercise of management functions since, otherwise, the understanding of the provision would not be consistent with the principle of culpability”.
Third: intervention must be proved. In the same paragraph it is stated that “Article 31 of the Criminal Code does not dispense with proof that the senior manager, director or legal representative took part, intentionally or negligently as the offence requires, in the specific criminal activity. Article 31 of the Criminal Code is not a presumption of criminal liability of the director or representative”.
Fourth: purpose of the provision. It is described as “a statutory criterion for attributing perpetration, established by law to avoid gaps in punishability in the case of special offences in the strict sense”. The judgment also reproduces, along the same lines, the doctrine of Supreme Court Judgment 338/2015 of 2 June, according to which Article 31 cannot give rise to “an unacceptable strict liability by reason of office, liability for the mere fact of being a director and not liability for the act”.
Judgment 336/2023 of 10 May reiterates this doctrine in its sixth legal ground in upholding the acquittal of a defendant in respect of whom the trial court found no “act revealing management or direction of the company's affairs” to have been established.
A Relevant Qualification for the Defence
In examining the question of perpetration (tenth legal ground, paragraph 10.3), the Court specifies that the attribution of perpetration “does not rest on the formal status of director, but on specific acts evidencing the material exercise of the management functions linked to the criminal conduct under trial”. The trial court had weighed her position of control over a long period, her signature on multiple acts of management and her position as guarantor.
Likewise, in the fifteenth legal ground (paragraph 15.2) the Supreme Court accepts the operation of inferences from circumstantial evidence: the director who performs the functions proper to his or her office “will appear, by inference, as responsible for the criminal decision, which, together with the remaining evidence, may allow the conclusion, where appropriate, that he or she must have intervened or must have known of the unlawful act in question”.
The practical conclusion is twofold. The office alone does not prove intent or participation; but the effective exercise of functions may operate as circumstantial evidence which the prosecution will supplement with other evidence. Accordingly, the defence cannot confine itself to invoking the case law: it must prove, by evidence, that those functions were not exercised or that the relevant information did not reach the director.
The Route of Omission: The Prosecution's Alternative Argument
Where it cannot be proved that the director engaged in positive conduct, the prosecution tends to argue that he or she omitted what was required of him or her. Article 11 of the Criminal Code equates omission with action where there is a specific legal or contractual obligation to act, and the duties of diligence and control that company law imposes on directors are habitually invoked as the basis of that position of guarantor.
The general duty of oversight cannot be turned into a presumption of knowledge. A person who knew of the facts and did not act is in a very different position from one who never had notice of them: the defence must place its client in the second situation by means of evidence, and it falls to the prosecution to prove that he or she was in the first.
Defence Strategy: How to Neutralise Charges Based on Office
The defence of a director begins before the first court summons and is structured around four fronts.
- Individualise the facts. From the first statement, it must be demanded that the conduct attributed to each person under investigation be specified. A generic charge against “the management of the company” prevents the proper exercise of the right of defence, and the person under investigation has the right to know the facts attributed to him or her.
- Document the real allocation of functions. Powers of attorney, delegations, organisation charts, minutes, emails and contracts showing who took decisions, who managed the matters concerned and who had access to the information. Where the company has a nominee director, this evidence is decisive.
- Prove the absence of knowledge and of capacity to intervene. Periods of sick leave or absence, lack of access to the accounting records or accounts, communications showing that the information did not reach the person under investigation. This is positive evidence, not a mere denial.
- Challenge the inference. In appeals against orders naming a person as a suspect or committing a case for trial and at the oral trial, it must be pointed out that the conclusion as to knowledge rests solely on the office, without specific basic facts to support it.
Two caveats must be made. First, this strategy protects those who genuinely did not know of the facts and took no part in them; it does not shelter the director who knew and chose not to act, whose position is governed by the rules on omission set out above. Second, it must be coordinated with the company's defence: the interests of the legal entity and those of the director do not always coincide, and a joint defence that is poorly conceived may prejudice both.
Conclusion
Spanish criminal law punishes acts, not offices. A person's status as a director is a datum that the court may weigh, but it does not replace proof that the person under investigation knew of the offence, wished it to be committed and contributed to it. An effective defence consists in shifting the debate from the office to the specific conduct of each person under investigation.a ella. La defensa eficaz consiste en desplazar el debate desde el cargo hacia la conducta concreta de cada investigado.
