Can a Manager or Director Be Criminally Liable for the Company's Crimes?

Yes, and personally. The company's liability under Law 20.393 does not shield the individual: it is a separate, autonomous track. The right question for anyone who signs decisions is not whether the company is exposed, but where their own exposure ends.

This page separates two liabilities that are often confused: the personal criminal responsibility of the manager or director, and the autonomous criminal liability of the company. It covers when an executive answers personally, what Law 21.595 sharpened for individuals, why the company's track runs on its own, the governance duty that sits above both, and the questions boards ask most.

Two liabilities, not one

The starting point is that the individual and the company are answerable on separate fronts, and each front follows its own rules.

The manager or director (natural person)

Answers with their own assets and freedom for the offense they decide, order, execute or wilfully allow. This liability is personal and non-transferable: acting in the company's name neither dilutes nor extinguishes it. Since Law 21.595, the applicable penalties for economic offenses became markedly more severe.

The company (legal entity)

Answers under Law 20.393 when a catalog offense committed within its activity was favored by the lack of an effectively implemented prevention model. Its liability is autonomous (Article 5): it can stand even without a conviction of the individual. An adequate model is what exempts it.

With that distinction set, the practical question is when the personal track actually reaches an executive.

When an executive answers personally

Personal liability does not require having signed the invoice. It follows the ordinary rules of authorship and participation.

As author or accomplice, when they decide, order or execute the conduct.
By inducement or agreement, when they instruct or coordinate that it be done.
By wilful omission of a duty of control that was theirs, when they knowingly let the offense happen from a position that could have prevented it.

The executive's position is not a shield; it is often the source of the duty. The higher the decision-making power, the harder it is to argue ignorance of what was happening in one's own line of business.

What Law 21.595 sharpened for natural persons

The 2023 reform did not only touch the company. It rebuilt the penalty regime that falls on the individual.

Custodial penalties

Effective enforcement

The economic-crime regime restricts the substitute penalties that used to keep white-collar sentences off actual imprisonment, so custodial time becomes a real prospect.

Fines

Scaled to assets

The day-fine system sets the fine according to the offense and adjusts it to the convicted person's income and assets, so the sanction bites regardless of net worth.

Disqualification

From management roles

Conviction can carry disqualification from holding director or management positions, a professional consequence that outlasts the fine itself.

Forfeiture

Of the profits

The reform strengthened forfeiture of the profits and gains obtained from the offense, reaching the economic benefit and not only the instruments used.

This personal exposure sits alongside the company's, and the two do not depend on each other.

The company's liability is autonomous (Article 5)

A frequent mistake is to assume that if the individual is not convicted, the company is safe. The law says the opposite.

Article 5 of Law 20.393 provides that the absence of a declaration of criminal responsibility of the natural person, or even the impossibility of identifying that person, does not bar the company's liability, so long as it is established that the act could only have been committed by or with the intervention of someone in the positions described in Article 3. The company answers on its own merits: for the failure of its prevention model, not for the individual's conviction.

The governance duty above both

Beyond the criminal question, directors carry a civil duty of care that a criminal exposure almost always implicates.

Article 41 of Law 18.046 requires directors to exercise the care and diligence people ordinarily apply to their own affairs, and they answer jointly for the damage their wilful or negligent conduct causes the company. A board that neither demanded nor supervised an adequate prevention model, and then finds the company indicted, is exposed on this second front as well: not to a criminal penalty, but to civil liability for the damage and to the reputational cost of the omission.

The same question, under the other laws

Personal exposure of those who run the company repeats across regimes. The same question arises for the employer under the Ley Karin and for the board under the Data Protection Law, each with its own rules on who answers and how.

Where does your exposure end?

The line between the company's liability and your own depends on the controls actually in place. The compliance diagnosis maps the offenses applicable to your line of business against your prevention model and shows where the personal exposure of management still runs open.

Request a compliance diagnosis

Frequently asked questions

Can a manager hide behind the company to avoid criminal liability?

No. The criminal liability of a natural person is personal and non-transferable: whoever decides, orders or carries out an offense answers for it, regardless of acting on the company's behalf. The legal entity does not absorb or replace that liability; Law 20.393 adds an autonomous liability of the company, not one that replaces the individual's.

Can the board be liable even without carrying out the offense?

It can, depending on its degree of involvement. Criminal law reaches those who induce, conspire, or wilfully omit a duty of control that was theirs. In addition, Article 41 of Law 18.046 requires directors to exercise the care and diligence people ordinarily apply to their own affairs, and breaching it opens the door to civil liability for the damage caused.

What did Law 21.595 change for managers and directors?

It reorganized economic offenses into their own regime and toughened their treatment for natural persons: custodial penalties with more effective enforcement, a fine system that scales with the convicted person's assets, disqualification from holding management positions, and forfeiture of the profits obtained. The executive's exposure is no longer theoretical.

Is the company liable even if the executive is not convicted?

Yes. Article 5 of Law 20.393 provides that the absence of a conviction, or even the failure to identify the natural person, does not bar the company's criminal liability, provided it is established that the act could only have been committed within its activity. They are two autonomous tracks that can advance separately.

Does a prevention model protect the manager or only the company?

It directly shields the company, because an adequate and effectively implemented model exempts it (Articles 3 and 4 of Law 20.393). It protects the executive indirectly: a serious model lowers the probability of the offense, documents controls and delimits responsibilities, which is often decisive to prove that whoever invokes diligence actually exercised it.

Official sources

Transform Your Legal Challenges into Competitive Advantages

Discover how our innovative approach can drive your business

ContactMeet the Team→