Criminal Liability of Commercial Company Representatives

1. Introduction: The question is not "Who committed the crime?", but "Who is responsible?"

Commercial companies, in carrying out their daily operations, become subject to penal norms spanning many different areas such as taxation, occupational health and safety, environment, consumer law, information technology, and banking.
However, according to the fundamental principle of the Turkish Penal Code, legal entities cannot be punished as direct offenders; criminal liability is always natural persons . It is precisely at this point that the question boils down to this:

In a commercial company, who is considered "authorized," "responsible," and "culpable" in criminal matters?

Especially in joint-stock and limited liability companies;

Chairman of the board?
Is he a delegate?
Is he the general manager?
Is he the company manager?
Is he the de facto ruler or the "shadow ruler"?
Only the person with signing authority, or?
Or all the partners,

Who will be held criminally liable?

This article will examine the question of "who is authorized?" within the systematic framework of the Turkish Penal Code , the Turkish Commercial Code , and special criminal codes, using practical examples . We will explore who is held responsible in prosecution and court practice, and what should be considered in defense strategies.

2. Normative Framework: Legal Entities, Representatives, and Criminal Liability

2.1. The Fundamental Principle of Criminal Liability in Legal Entities

According to the systematic structure of the Turkish Penal Code:

Criminal responsibility is personal. The person who commits the criminal act and is at fault is the one who is punished.
Direct criminal liability is not foreseen for legal entities ; only security measures can be applied to legal entities .
Therefore, in criminal proceedings concerning acts committed on behalf of a commercial company, the prosecution the natural person representing or actually managing the company .

This structure creates a practical problem: when there are many officials and employees within the company, who will be held criminally responsible for the criminal act?

2.2. Organs and Representation Authority of Commercial Companies

According to the Turkish Commercial Code, the organizational structure and representation regime of commercial companies differ according to their type:

In joint-stock companies, as a rule, the authority to represent the company belongs to the board of directors, and with a decision of the board of directors, to the managing director or the general manager .
In limited companies, the authority to represent the company the director or the board of directors .
The power of representation becomes effective against third parties upon registration and publication in the commercial registry ; the signature circular is the practical manifestation of this power

In criminal proceedings, the person who initially appears to be "authorized to represent and bind the company according to the commercial registry" becomes the target of the prosecution. However, this is not always sufficient; the actual management, division of labor, and the specific circumstances of the case must also be examined.

2.3. Distinction Between Representation Authority and De Facto Administration

Two separate axes are important in determining criminal responsibility:

Legal representation authority
- In external relations, whoever is authorized to represent and bind the company according to the commercial registry, articles of association, and signature circulars, that person appears as "authorized".
Actual management and de facto power of disposal
- In practice, in many cases, the person listed as authorized in the registry is only a "formal" authorized person, and the company is actually managed by someone else.
- In terms of criminal liability, courts can also hold accountable those who actually manage, make decisions, give instructions, and control implementation

Therefore, in the analysis of criminal responsibility, simply identifying the "authority figure in the registry" is insufficient; the organic link, actual participation in management, fault, and intent/negligence must be assessed together.

3. Principles Used in Determining Criminal Responsibility

3.1. The Principle of Individual Responsibility and Fault

According to the fundamental principle of criminal law:

Everyone only for their own actions and mistakes .
In crimes committed in the name of a commercial company, participation in, negligence, or instruction of the specific act is determined becomes the subject of criminal liability.
A passive partner who says, "I am a partner in the company, but I don't get involved in the business," and a person who is a "minor shareholder but effectively manages the company" cannot be held equally criminally liable.

Therefore, courts determine whether the act constituting the crime:

Whose knowledge did it have?
Whose instructions did it follow?
It attempts to demonstrate, with concrete evidence, who should be responsible for overseeing it

3.2. Responsibility of Organs and Representatives

Due to the nature of a legal entity, actions are often carried out through the company's organs or representatives . Here:

Board members, directors, executive board members, general manager, branch managers, finance director, etc., stand out in their capacity as organ/representatives
If these individuals commit a criminal act while acting on behalf of the company, perpetrators or accomplices .
In some specific laws (e.g., tax, environmental, occupational health and safety, checks, etc.), certain roles acting on behalf of a legal entity are specifically listed, and responsibility is directed to these individuals.

3.3. The Question: “Who is Authorized?” Is Signature Authority Alone Sufficient?

One of the important points is this:

Simply having signing authoritydoes not, in itself, guarantee liability for every crime.
Depending on the nature of the incident, both authority, actual involvement, and fault are required for criminal liability .
However, in some types of crimes (for example, crimes arising from the failure to fulfill certain administrative obligations), simply being the person with signing authority can in itself give rise to liability, as the "authorized body or capacity" is specifically indicated in the law .

In summary , while the question "Do you have the authority to represent?" is important, the crucial question is "What was your role in the commission of the specific act?"

4. Criminal Liability of Representatives in Joint Stock Companies

4.1. Board of Directors and Executive Members

In joint-stock companies, representation and management generally to the board of directors . In practice:

Instead of the entire board of directors, executive authority is delegated to the authorized members or the general manager.
Internal regulations, task allocation decisions, and board resolutions determine who is responsible for which area.

In criminal proceedings, the prosecution often:

Commercial registry records,
Signature circular,
Board of directors decisions,
Internal guidelines

By examining this, it seeks to answer the question, "Who is the decision-making and executive body of the company in that area?".

For example;

A board member appointed by resolution to be responsible for tax, finance, and accounting operations directly held accountable .
If occupational health and safety processes are entrusted to a specific board member or general manager by a board decision, that person may be primarily held liable in cases of negligent injury/death resulting from a workplace accident.

4.2. General Manager and Other Senior Executives

In a limited liability company the general manager position often refers to the person who actually manages the company. Legally:

The board of directors may delegate the authority to represent and manage the company to the general manager.
In the commercial registry and signature circulars, the general manager may appear as authorized to conduct all transactions on behalf of the company.

In criminal proceedings;

The general manager is particularly prominent in cases involving crimes related to operational decisions , daily operations , personnel management , and financial flows
Conversely, in cases of breaches in a specific, technical area that occur outside the general manager's knowledge and control (e.g., technical irregularities in a particular production process), direct responsibility may be debatable. In such cases, the relevant production director, plant manager, quality manager, etc., may also come into play.

4.3. Is Being a Board Member and Shareholder Sufficient on Its Own?

Simply a board member does not automatically mean you are liable for every crime.
To be held liable, one must either be employed in the relevant field , have influence over the specific act , or neglect a supervisory duty
Particularly with regard to board members or partners who “only contribute capital and do not actively oversee operations,” courts a concrete link to taken.

However;

Since being a board member also implies a duty of oversight and supervision , the possibility of negligent conduct and criminal activity cannot be entirely ruled out for passive members who ignore obvious illegalities and fail to take precautions despite knowing the risks .

5. Criminal Liability of Representatives in Limited Liability Companies

5.1. Director or Board of Directors

In limited companies:

The management and representation of the company to the director or the board of directors .
The title of director is often a position that combines both the roles of partner and manager
A director registered in the commercial registry is considered "the person authorized to represent the company" in criminal proceedings.

In terms of criminal liability:

If a company director actually exercises the authority to conduct the company's financial, administrative, and commercial affairs, they are naturally liable for many crimes committed in the company's name.
If there is more than one director, the division of labor, internal decisions, and actual procedures are taken into consideration to determine which director is responsible for which action

5.2. Criminal Liability of Partners

In a limited company:

Simply "being a partner" is not sufficient for criminal liability.
If a partner is not also the director or de facto manager, and their connection to the specific act cannot be proven, they cannot be held criminally liable solely on the basis of their partnership.

However, in practice;

In some cases, it is observed that in small-scale family businesses, business decisions are effectively made by the partners, and the company director exists only "in name".
In such cases, courts can assess the partners' actual management, instructions they give, bank transactions, and correspondence, and hold them liable as de facto managers

6. Application Examples within the Framework of the Question "Who is Authorized?"

Below, we will illustrate the question of "who is held criminally responsible?" through typical scenarios frequently encountered in practice.

6.1. Example 1 – Issuing Fake Invoices (Tax Evasion)

Case:
It is discovered that fake invoices were issued in the name of a limited liability company. A tax audit reveals that the company's books and records do not reflect the truth and that its tax base has been underdeclared.

Prominent figures:

Chairman of the Board
Board member or executive director responsible for financial affairs
General manager
Accounting manager or finance director
Freelance accountant/financial advisor

Prosecutor and court approach:

The authorized representative of the company is determined by examining the trade registry records and signature circulars
However, not only representation authority but actual participation in the invoicing process is required:
- Who gave the order?
- Who issued the invoice, and who signed it?
- Who handled the bank transactions?
- Who was actually running the company during the period when the fake invoices were being issued?
accountants are often the bookkeeping and tax return filing process, their liability for complicity in the knowing use of fraudulent invoices is assessed separately.

Conclusion:

In tax evasion cases, in most instances, the manager authorized to represent the company and responsible for financial affairs, as well as the accounting/financial manager who was actively involved in the process, are held responsible.
Only individuals who are merely "partners" and not actively involved in the process can be acquitted if there is no concrete evidence to support their claim.

6.2. Example 2 – Work Accident, Injury/Death Due to Negligence

Incident:
A workplace accident occurs at a construction company's site, resulting in the death of one worker. It is determined that occupational health and safety measures were inadequate.

Contact persons:

In the case of a joint-stock company, the board of directors and the executive board members have the authority to act as authorized representatives
The director of a limited company
Site manager, project manager
Occupational safety specialist
Occupational physician
Subcontractor/outsourcing company officials

Factors considered in the responsibility analysis:

Who is responsible for occupational health and safety organization?
Who organized, or should have organized, the risk analysis, training, equipment procurement, and personal protective equipment?
Who was in charge of actual supervision of the construction site?
Who was it that continued production and working on the risky site despite the warnings?

Conclusion:

In addition to the manager who organically represents the company, the technical personnel and occupational safety officerscan also be held liable for negligent offenses.
Here, the measure is not only formal authority, but also actual governance and the distribution of blame.

6.3. Example 3 – Deceptive Advertising, Fraud

Case:
An e-commerce company is charging consumers for products that are not actually in stock, then failing to ship the products or shipping them significantly incomplete/defective. Numerous complaints have been filed.

Possible culprits:

Company director or general manager
Manager responsible for marketing and sales
Responsible manager of the e-commerce site
Unit managers who manage call center and return processes

Evaluation:

Is this a systematic business policy designed to deceive consumers , or is it an isolated incident?
Who determines advertising and campaign strategies?
Who sets the policy for rejecting consumer return requests?

In such cases, if the company's senior managementknowingly engages in fraudulent or misleading practices, they may be held liable for fraud or other related crimes. Lower-level employees are often simply acting on instructions .

6.4. Example 4 – Check Crimes and Payment Obligations

Case:
Checks issued on behalf of the company are bouncing, and specific penal norms related to check and payment law are coming into play.

Who is responsible?

In most cases, whoever signs the check is the one liable for any criminal liability arising from the check.
The person authorized to represent the company at the time of issuance also bears criminal liability

Here, putting aside the partnership aspect, the main point to consider is:

Is the person who signed the check authorized to represent the company?
Who made the decision to issue the check?
Was she in a position to know, or foresee, that it would be unrequited?

7. Defense Strategies During the Investigation and Prosecution Phases

In criminal investigations, the prosecution often initiates the case with the approach of "let's go to the authorized person in the commercial registry." However, on the defense side:

7.1. Concretization of Representation Authority and Division of Duties

The first step in defense strategy is to demonstrate competence and actual operation with concrete documentation:

Commercial registry records
Articles of association, provisions of the articles of association
Board of directors decisions, board of managers decisions
Internal guidelines, task allocation diagrams
Signature circular
Organizational chart, job descriptions

With these documents:

The areas for which the client is responsible,
Areas for which he is not responsible and in which his name is only formally mentioned
should be clearly distinguished.

7.2. Actual Management Analysis

The prosecution often attempts to hold even those not listed as authorized in the records accountable, relying on the "de facto manager" argument. In the defense:

The client's role in daily operations,
Participation in decision-making processes,
Authority to give orders/commands to employees,
Bank records, emails, correspondence, meeting notes, instruction logs

matter must be carefully examined, and the claim of de facto management must be refuted. Situations where the client is solely a "consultant," "technical staff," or "investor" must be demonstrated with concrete evidence.

7.3. Scope of Supervision and Control Obligations

The duty of oversight and supervision is important for board members and directors . In defense:

The precautions taken by the client before and after the incident,
The warnings he issued to eliminate the risks,
Procedures created to strengthen the corporate structure

It should be emphasized that the accusation of "committing a crime through negligent conduct" should be softened.

7.4. Distinction Between Organ and Organ Donor

In some cases, criminal investigations are also conducted against individuals such as accountants, human resources managers, and sales/marketing managers. Defense:

These individuals organ donors or organ recipients ; they are merely an implementing role.
He didn't make strategic decisions, he only followed instructions,
He did not have the authority to make a decision that could prevent the act in question

It should be based on sound principles; it should be emphasized that the real risk lies within the company's organs and actual managers.

8. Risk Management and Compliance Recommendations

The larger the commercial company, the greater the risk of not being able to clearly answer the question of "who is authorized?" . To mitigate risks from a criminal law perspective, the following steps are important for companies:

8.1. Written Assignment of Duties and Internal Regulations

The board of directors and managers must specify in writing who is responsible for which areas and keep this internal guideline up-to-date
The responsible manager must be clearly defined , especially in high-risk areas such as finance, taxation, occupational health and safety, environment, human resources, and information security .

8.2. Effective Internal Audit and Reporting

Internal audit mechanisms should be established, and risky areas should be checked periodically
Any irregularities identified should be reported to senior management
Reports and measures taken should be recorded in writing.

These records are important defense tools that demonstrate "duty of choice" in a potential criminal investigation

8.3. Integration Programs and Training

The company should provide its employees and managers with periodic training in areas such as criminal law, tax law, occupational health and safety, personal data, and competition law
Through ethical codes and compliance programs, an organizational culture should be created to prevent violations .

8.4. Whistleblowing Mechanisms and Internal Investigations

Establishing anonymous whistleblowing channels within the company ,
Employees who become aware of illegal practices should be able to report them without hesitation
Conducting an effective internal investigation after the notification ,

This allows for both the early detection of violations and the refutation of future claims that "the company took no precautions.".

9. Conclusion: A Systematic Approach to the Question of "Who is Authorized?" in Criminal Liability

The criminal liability of representatives of commercial companies is not a matter that can be simplified to a single sentence such as "the person authorized in the commercial registry is responsible.".

For a sound assessment:

Company type (joint-stock/limited liability, etc.)
Organ structure and representation regime
Internal regulations, task assignments, signature circulars
De facto administration and de facto savings
The nature of the specific crime (intentional/negligent, subject to special law, administrative obligation, etc.)
Personalization of fault

It should be considered as a whole.

In practice;

Often, the prosecution directly targets the person who appears to be authorized to represent the company ,
The defense's task is to clarify the scope and actual functioning of the authority.
To demonstrate the client's connection to the specific act, their area of knowledge, and their degree of culpability with clear evidence
If necessary, the goal is to point the finger at other individuals in de facto leadership positions, providing evidence.

Ultimately, whether it's a commercial company or not, the immutable rule of criminal law is this:

Whoever directs or orchestrates the crime, and whoever contributes to the crime through negligent conduct, bears criminal responsibility.

Criminal law, Criminal Liability, Turkish Penal Code, power of representation, commercial law, commercial company, Turkish Commercial Code, authority, manager, board of directors

Single Blog Title