Corporate fines and disqualifications

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Questions and answers:

What is a corporate fine?

Corporate fines have become increasingly common in economic crime cases. A corporate fine is not a penalty in the strict sense, but another specific legal effect of crime that can be used in cases of business crime.

A corporate fine is something that the prosecutor can claim in a case of, for example, accounting and/or tax fraud. It is the trader who must pay the corporate fine, which can be said to be a kind of fine for companies. The corporate fine is a minimum of SEK 5 000 and a maximum of SEK 10 million.

A prerequisite for a corporate fine is that the trader did not do what could reasonably be required to prevent the crime or that the crime was committed by a person who held a management position or had a special supervisory or control responsibility in relation to the trader.

Individuals in the company can be prosecuted even if the prosecutor requests a corporate fine. There may also be a case for only imposing a corporate fine on the company without any natural person being prosecuted.

What is a business ban?

Those who seriously mismanage their business activities can also be banned from trading. A business ban is valid for a minimum of three and a maximum of ten years.

 Discontinuation may be necessary if

  • the trader engaged in systematic misconduct,
  • whether the consequences of the mismanaged commitments led to a higher profit,
  • the misconduct has caused damage or was intended to cause damage; or
  • if the trader has been convicted of a business crime in the past

It is the prosecutor who brings the action for disqualification and this is tried in the same trial as, for example, the accounting and/or tax offence. In the case of a serious accounting fraud and/or a serious tax crime with a minimum sentence of six months, it is almost mandatory for the prosecutor to also bring an action for disqualification.

A business ban means, for example, that during the period of the ban you may not engage in a business activity, be a signatory of a company, act as a representative of a legal person engaging in a business activity, be a member of the management of a business activity, be employed in the business activity to which the ban applies, or be employed in a business activity run by a related party.

Do you need help with financial crime? We can support you with questions about accounting fraud, tax crime, and money laundering offenses.

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The Consumer Disputes Board of the Swedish Bar Association
The Consumer Disputes Board examines fee disputes and other financial claims, both domestic and cross-border, brought by a consumer against a attorney or law firm. Learn more here.

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