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Texas Penal Code 7.23. Corporate Criminal Responsibility - Houston Criminal Attorney

Texas Penal Code 7.23. Corporate Criminal Responsibility - Houston Criminal Attorney


Summary: Texas Penal Code Section 7.23 outlines the principles governing the criminal responsibility of individuals acting on behalf of corporations, associations, limited liability companies, or other business entities. The section specifies that an individual can be held criminally accountable for their actions conducted in the name of or on behalf of such entities, as if those actions were performed personally. If an agent holds the primary responsibility to fulfill a legal duty imposed by law on a business entity, they can be held criminally liable for failing to fulfill that duty to the same extent as if the duty was directly imposed on them.


In the event that an individual is convicted of committing an offense in the interest of a corporation or business entity, they will be subject to the appropriate legal consequences that an individual would face for the same offense. This ensures that individuals cannot evade accountability by carrying out unlawful activities under the cover of a corporate or business entity.


The section was initially enacted in 1973 and has been amended over time to clarify and update its provisions, with the most recent amendment taking place in 2019.


Please note that this is a general summary and not legal advice. For specific legal guidance, it is recommended to consult the full text of the Texas Penal Code or seek assistance from a qualified legal professional.


Case Law:


"Section 7.23(a) simply prevents defendants from insulating themselves from liability for offenses they personally commit by hiding behind the veil of a corporate entity. See, e.g., Littlefield v. State, 586 S.W.2d 534, 535 (Tex. Crim. App. 1979) (applying Section 7.23(a) and finding no reversible error in a case revoking the defendant's probation where the defendant signed an automobile lease on behalf of a corporation and subsequently failed to make the lease payments). Thus, Section 7.23(a) can provide no independent basis for vicarious criminal responsibility on the facts of this case."


Johnson v. State, NO. PD-0197-17, 13 n.12 (Tex. Crim. App. Nov. 7, 2018).


"Appellant further contends that the trial court abused its discretion in revoking his probation in that the automobile was leased to Littlefield Enterprises Incorporated rather than to appellant. The evidence shows that the lease was made out to Littlefield Enterprises and signed "Littlefield Enterprises by: George Littlefield." . . . We find that appellant was properly charged with the conduct performed in the name of Littlefield Enterprises Incorporated."


Littlefield v. State, 586 S.W.2d 534, 535-36 (Tex. Crim. App. 1979)


Statute:


Sec. 7.23. CRIMINAL RESPONSIBILITY OF PERSON FOR CONDUCT IN BEHALF OF CORPORATION, ASSOCIATION, LIMITED LIABILITY COMPANY, OR OTHER BUSINESS ENTITY.


(a) An individual is criminally responsible for conduct that the individual performs in the name of or in behalf of a corporation, an association, a limited liability company, or another business entity to the same extent as if the conduct were performed in the individual's own name or behalf.


(b) An agent having primary responsibility for the discharge of a duty to act imposed by law on a corporation, an association, a limited liability company, or another business entity is criminally responsible for omission to discharge the duty to the same extent as if the duty were imposed by law directly on the agent.


(c) If an individual is convicted of conduct constituting an offense performed in the name of or on behalf of a corporation, an association, a limited liability company, or another business entity, the individual is subject to the sentence authorized by law for an individual convicted of the offense.


Acts 1973, 63rd Leg., p. 883, ch. 399, Sec. 1, eff. Jan. 1, 1974. Amended by Acts 1993, 73rd Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994. Amended by: Acts 2019, 86th Leg., R.S., Ch. 112 (S.B. 1258), Sec. 2, eff. September 1, 2019.

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