The Role of Managers in the Administrative Liability of Legal Entities

Law No. 30424, which regulates the administrative liability of legal entities in criminal proceedings, establishes a framework that closely links the actions of Senior Management with the potential liability of the company. 

For such reasons, it is essential to analyze the role of the managers within the company, as they constitute one of the most important governing bodies. 

 

Liability of the Legal Entity 

In accordance with Article 3 of Law No. 30424, a legal entity may be held administratively liable for the offenses committed in its name, on its behalf, and for its benefit, whether direct or indirect, when such acts are carried out by: 

  • The shareholders, directors, de facto or de jure managers, legal representatives or attorneys-in-fact of the legal entity, or of its affiliates or subsidiaries (collectively, the “Management”). 

  • Natural persons under the authority of the Management, when the offense is committed pursuant to their instructions or with their authorization. 

  • Natural persons under the authority of the Management, when Management has failed to fulfill its duties of supervision, oversight, and control.  

 

Liability of the Manager 

The Manager, as a de jure administrator, is a party whose acts can be directly attributed to the legal entity. Therefore, if the Manager commits an offense in the course of performing their duties and for the benefit of the company, one of the legal grounds for attributing liability is automatically satisfied. The Manager may also be held responsible for the actions of subordinates, where there has been a failure to comply with their duties of supervision, oversight, and control.  

Liability by Omission: 

According to the Peruvian Criminal Code, liability for improper omission is established when an individual has a legal duty to prevent a specific outcome from occurring. In the corporate sphere, this position typically falls upon Managers, who have the duty to: 

  • Supervise the organization's activities. 

  • Implement adequate internal controls. 

  • Prevent the commission of crimes within the company. 

 

Failure to fulfill these duties may give rise not only to personal liability, but also to liability for the legal entity. 

 

Prevention Model 

Law No. 30424 sets out the possibility to adopt a prevention model as a mechanism that may exempt or mitigate liability, provided that it has been implemented prior to the commission of the offense and meets the minimum requirements. 

Notwithstanding the foregoing, the same legal framework establishes that such exemption does not apply when the offense is committed by shareholders, directors, de facto or de jure administrators, legal representatives, or attorneys-in-fact with control over the legal entity. In such cases, the court will impose an administrative penalty, which may be reduced by up to 90% if the following mitigating conditions are met: 

  • Objective, substantial, and decisive collaboration in clarifying the criminal facts, prior to the start of the intermediate stage. 

  • Prevention of the harmful consequences resulting from the illicit act. 

  • Full or partial restitution of the damages. 

  • The adoption and implementation of a prevention model by the legal entity after the commission of the crime and before the start of the oral trial. 

  • Partial accreditation of the minimum elements of the prevention model 

In this context, the Manager’s actions may not only directly trigger corporate liability but also affect the company’s ability to prevent or mitigate such liability. 

 

Is the Manager Liable under the General Peruvian Companies Law? 

Yes, under the General Peruvian Companies Law (Ley General de Sociedades or LGS), the Manager is generally liable to the company, its shareholders, and third parties for: 

  • Willful misconduct. 

  • Abuse of authority. 

  • Gross negligence. 

This includes situations where the Manager fails to adopt reasonable measures to prevent legal risks or breaches their fiduciary duties. 

 

Our Added Value 

Failure by the Manager to fulfill their direct duties not only exposes the company to sanctions but may also result in personal liability. For such reason, receiving strategic legal advisory is essential to support decision-making and ensure transparent accountability before the Board of Directors or the Meeting of Shareholders, as applicable. 

At BDO SERVICIOS LEGALES Y LABORALES S.A.C., we provide legal support to Senior Management to facilitate efficient decision-making. For more information, please contact us via email at: servicioslegales@bdo.com.pe. 

 


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