In general, company directors are criminally liable if, in the exercise of their functions, they commit crimes (the most common: fraud, corruption, tax crimes or other offences provided for by law). However, criminal liability only arises if it is proven that the director acted with intent or gross negligence, and that the crime was committed in the interest or to the advantage of the company. It is important to underline that criminal liability is personal, so each director is liable for his own actions, even if he acts in the interest of the company.

Sometimes, some people are used as fronts or intermediaries to hide the true identity of those who control or manage a company or business (so-called “blockheads”): in practice, they are figures who appear to be directors or partners, but in reality have no real decision-making power or direct interest in management. This ploy is often used to hide illegal activities, avoid liability or evade tax and legal controls.

From a legal standpoint, “blockheads” can be complicit, even unwittingly, in crimes and in some cases can be held liable if it is proven that they acted knowingly to hide illegal activities. The law, in fact, tends to target those who lend themselves to these fictitious roles to avoid liability or for illicit purposes.

The situation is especially risky in the case of bankruptcy and fraudulent bankruptcy. Bankruptcy occurs when a company is no longer able to pay its debts, entering a situation of insolvency. Fraudulent bankruptcy, on the other hand, is a more serious crime: it occurs when the directors or managers of the company commit malicious actions to hide or dissipate the assets, with the intent of defrauding creditors or hindering bankruptcy.

Directors play a key role in these dynamics. They must manage the company with diligence and transparency, protecting the interests of creditors and complying with the law. However, if they behave fraudulently, for example by falsifying documents, hiding assets or bleeding the company dry, they can be held liable for fraudulent bankruptcy. In these cases, they risk criminal and civil sanctions, and their behavior can seriously compromise the stability of the company and the protection of creditors.

Avv. Doris Reichel