Can A Corporation Or LLC Be Charged With A Crime In Georgia? A Guide From George Creal, Atlanta Criminal Defense Attorney

When people think of criminal charges, they typically imagine individuals facing prosecution. However, in Georgia, corporations and Limited Liability Companies (LLCs) can also be held criminally liable for actions taken by their agents or leadership. As a seasoned Georgia criminal defense attorney, I’ve defended businesses facing such charges and understand the complexities involved. This blog post explains how corporations and LLCs can be charged with crimes in Georgia, incorporating insights from the landmark case State v. Military Circle Pet Center No. 94, Inc., 257 Ga. 388 (1987), and the procedural requirements of O.C.G.A. § 17-7-92 for prosecuting corporate entities.

How Corporations And LLCs Face Criminal Charges In Georgia

In Georgia, corporations and LLCs are considered “legal persons” under the law, meaning they can be prosecuted for crimes similar to individuals. This principle is codified in O.C.G.A. § 16-2-22, which outlines the conditions for corporate criminal liability. Businesses can be charged in two primary ways:

• Vicarious Liability: A corporation or LLC can be liable for the actions of its employees or agents if:
  • The agent acts within the scope of their employment or authority.
  • The criminal act is performed on behalf of or for the benefit of the entity.
  • The commission of the crime is authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a managerial official who is acting within the scope of his employment in behalf of the corporation.
  • For example, if an employee commits fraud to boost company revenue, the corporation could face charges.
• Direct Liability: The entity itself can be liable if its leadership such as the board of directors or high-ranking managers authorizes, requests, commands, performs, or recklessly tolerates criminal conduct. This might include:
  • Where the crime is defined by a statute which clearly indicates a legislative purpose to impose liability on a corporation,
  • An agent of the corporation performs the conduct which is an element of the crime while acting within the scope of his office or employment and in behalf of the corporation; or
  • Deliberate violations of state laws, such as tax evasion or environmental regulations.
  • Negligent oversight that allows crimes to occur, like failing to enforce safety protocols.

Procedural Requirements: O.C.G.A. § 17-7-92

When a corporation or LLC is charged with a crime in Georgia, specific procedural rules apply, as outlined in O.C.G.A. § 17-7-92. This statute governs how legal process is served and how corporate defendants are brought to court:

• Service of Process: When a corporation is indicted or accused, the court issues a notice to appear, which must be served on an officer or agent of the corporation authorized to receive service (e.g., a registered agent or corporate officer). Service can be executed by a sheriff or deputy, and the officer must certify the date and manner of service.
• Appearance and Plea: Upon receiving the notice, the corporation must appear in court through counsel or an authorized representative to enter a plea. If the corporation fails to appear, the court may enter a “not guilty” plea on its behalf and proceed with the case.
• Trial in Absentia: If the corporation does not appear after proper service, the case can proceed to trial, and the corporation may be tried in absentia, with penalties imposed upon conviction.

O.C.G.A. § 17-7-92 ensures that corporations are given due process while allowing the state to prosecute entities efficiently, even if they attempt to evade court proceedings.

Key Case: State v. Military Circle Pet Center No. 94, Inc.

The Georgia Supreme Court’s decision in State v. Military Circle Pet Center No. 94, Inc., 257 Ga. 388 (1987), provides critical insight into corporate criminal liability. In this case, the defendant, operating as Docktor Pet Center, was charged with deceptive business practices under O.C.G.A. § 16-9-50 for allegedly selling sick animals while representing them as healthy. The company argued that the accusations were defective because they did not include the provisions of O.C.G.A. § 16-2-22(a)(2), which requires that the crime be authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or a managerial official.

The Georgia Court of Appeals initially agreed with Docktor Pet, ruling that the accusations were insufficient. However, the Georgia Supreme Court reversed, clarifying:

• The state is not required to allege the specific provisions of O.C.G.A. § 16-2-22 in the accusation. Instead, the accusation must comply with O.C.G.A. § 17-7-71(c), which requires that the offense be described in clear terms understandable to a jury.
• The accusations against Docktor Pet clearly outlined the deceptive practices, satisfying due process and statutory requirements.
• While the state must prove the elements of O.C.G.A. § 16-2-22 at trial (e.g., that the crime was committed by an agent acting within their authority or was tolerated by management), these elements do not need to be detailed in the charging document.

This ruling, combined with the procedural framework of O.C.G.A. § 17-7-92, ensures that corporations are fairly notified of charges and can be prosecuted effectively, even if they challenge the technical sufficiency of the accusation.

Common Crimes Charged Against Corporations And LLCs

Corporations and LLCs in Georgia can face a variety of criminal charges, including:

• Fraud: Misrepresenting financials, deceiving customers, or engaging in securities fraud.
• Environmental Violations: Illegal dumping or non-compliance with state environmental laws.
• Tax Evasion: Falsifying tax records or underreporting income.
• Consumer Protection Violations: Deceptive practices, as seen in the Military Circle case.
• Workplace Safety Violations: Negligence leading to employee injuries due to unsafe conditions.

The Military Circle case highlights how even smaller businesses, like a pet store, can face charges for misleading customers, demonstrating the broad applicability of Georgia’s criminal laws to corporate entities.

Penalties For Corporations And LLCs

Since corporations and LLCs cannot be imprisoned, penalties focus on financial and operational consequences:

• Fines: Courts may impose significant fines based on the crime’s severity and the entity’s financial capacity.
• Restitution: Businesses may be ordered to compensate victims, such as defrauded customers or communities harmed by environmental violations.
• Probation: Corporate probation can include court oversight, mandatory compliance programs, or operational restrictions.
• License Revocation: In severe cases, the state may revoke the entity’s business license, halting its operations.
• Reputational Damage: Criminal charges can severely impact a company’s public image and customer trust.

Defending Against Corporate Criminal Charges

Defending a corporation or LLC requires a strategic approach. Common defenses include:

• Lack of Intent: Arguing that the criminal act was not authorized or intended by the company.
• Rogue Employee: Demonstrating that the employee acted independently, against company policy.
• Compliance Programs: Showing that the company had robust policies to prevent criminal conduct, which can reduce liability.
• Procedural Challenges: Ensuring that the state complied with O.C.G.A. § 17-7-92 in serving process and notifying the corporation of the charges.

At George C. Creal, Jr., P.C., we leverage cases like Military Circle and statutes like O.C.G.A. § 17-7-92 to build strong defenses for our corporate clients.

Why Choose George Creal For Your Defense?

Facing criminal charges as a corporation or LLC in Georgia can threaten your business’s survival. Prosecutors may target both the entity and its leadership, and the consequences fines, restitution, and reputational harm can be devastating. At George C. Creal, Jr., P.C., we specialize in defending businesses against criminal allegations, using our deep knowledge of Georgia law to protect your interests. Whether it’s negotiating with prosecutors, challenging procedural errors under O.C.G.A. § 17-7-92, or proving compliance efforts, we fight to safeguard your company’s future.

Contact George Creal Today

If your corporation or LLC is under investigation or facing criminal charges in Georgia, don’t wait to act. Contact George C. Creal, Jr., P.C. for a consultation. Call us at (770) 961-5511 or visit www.georgialawyer.com to schedule an appointment. Let our expertise guide you through this challenging process.

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for advice specific to your situation.