Public safety, public order and other offences
In short
Article 31 bis of the Criminal Code (Código Penal) allows a legal entity – whether a trading company, an association or a foundation – to be convicted in two situations:
The company’s liability is independent of that of the individual. It can be established even if the specific perpetrator has not been identified or proceedings could not be brought against them (article 31 ter). If both are fined, the court must adjust the amounts so that the total is not disproportionate.
The State, regional, local and institutional public administrations, regulatory bodies, public agencies and public business entities, and other entities exercising public powers are excluded (article 31 quinquies).
A company is only liable for offences where the Criminal Code expressly provides for it. Among the most relevant for any business are:
All penalties for legal entities are classed as serious. Article 33.7 lists the following:
| Penalty | Legal limit |
|---|---|
| Daily-rate or proportional fine | Depending on each offence |
| Dissolution | Permanent loss of legal personality |
| Suspension of activities | Up to 5 years |
| Closure of premises and establishments | Up to 5 years |
| Ban on carrying out the activities in which the offence was committed | Temporary, up to 15 years, or permanent |
| Disqualification from receiving subsidies, contracting with the public sector and tax benefits | Up to 15 years |
| Judicial administration | Up to 5 years |
To impose penalties other than a fine, the judge assesses whether they are necessary to prevent the criminal activity from continuing, their economic and social consequences, especially for employees, and the position of the person who failed in their duty of control (article 66 bis). Note: temporary closure, suspension of activities and judicial administration can be ordered as interim measures during the investigation.
Criminal compliance is the system that allows a company to be exempted from liability. If the offence is committed by a director or manager, exemption requires that, before the offence, the board had adopted and effectively implemented a suitable organisation and management model; that its supervision had been entrusted to a body with autonomous powers; that the perpetrator had fraudulently circumvented the model; and that there was no insufficient oversight (article 31 bis.2). If it is committed by an employee, it is enough to have adopted and effectively implemented an appropriate model (article 31 bis.4).
Under article 31 bis.5, the model must:
In small companies – those permitted to file an abridged profit and loss account – the board itself can take on the supervisory role (article 31 bis.3). If the requirements are only partially met, this is taken into account to reduce the penalty.
We design the model around the real risks of your business, not with generic templates: a model that exists only on paper does not provide exemption.
The Criminal Procedure Act (Ley de Enjuiciamiento Criminal) lays down its own rules. The summons is served at the registered office and the company is required to appoint a specially designated representative, a lawyer and a court representative (procurador) (article 119). That representative gives evidence on the company’s behalf, with the right to remain silent and not to testify against it (article 409 bis). It is advisable that this person is not someone being investigated individually in the same case, to avoid conflicts of interest. More information on our page about being summoned as a suspect.
After the offence, the company can only reduce its liability if, through its representatives (article 31 quater), it:
Penalties imposed on companies give rise to a criminal record, which is expunged under the general time limits. If dissolution or a permanent ban on activities is ordered, the entries are expunged after fifty years (article 136.3).
Yes. Article 31 bis of the Criminal Code allows companies, associations and foundations to be convicted of offences committed for their benefit by directors and managers, or by employees where there has been a serious failure in the duty of supervision. They are only liable for offences where the law expressly provides for it, such as fraud, tax fraud or money laundering.
The Criminal Code does not require every company to have one. But without an effective prevention model in place before the offence, the company cannot benefit from the exemption in article 31 bis. In practice, therefore, it is a company’s main defence tool in criminal proceedings.
Article 33.7 provides for fines, dissolution, suspension of activities for up to five years, closure of premises for up to five years, a temporary or permanent ban on activities, disqualification from contracting with the public sector and receiving public aid for up to fifteen years, and judicial administration for up to five years. A fine is the most common; the others require a specific assessment by the judge.
Yes. The law provides that in small companies – those permitted to file an abridged profit and loss account – the board itself can take on supervision of the model (article 31 bis.3). The model must be proportionate to the business and its real risks, without the structure a large corporation would need.
The company appoints a specially designated representative, who appears with the company’s lawyer (articles 119 and 409 bis of the Criminal Procedure Act). They have the right to remain silent and not to testify against the company. If they do not appear, the company is deemed to be exercising its right not to give evidence.
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