29.09.2023

Improper business record-keeping and criminal liability

plpolski (Polish)

This article describes the crime of improper business record-keeping. The offence criminalises the infliction of property damage through the aforementioned unreliable or improper record-keeping. Pursuant to Article 303 § 1 of the Criminal Code, such damage must arise as a result of the failure to keep records at all or in a manner that does not comply with the law. It is therefore unlawful to destroy, erase, conceal or falsify such documentation. The offence is punishable by up to three years imprisonment.

When improper business record-keeping is a crime

The legislator decided to introduce this offence in order to protect economic transactions. This is because, on the basis of reliably maintained documentation, counterparties may decide to enter into an entrepreneurial relationship. Knowledge of the entrepreneur’s debt or financial turnover may help avoiding unnecessary risks when entering into business relationships.

The offence described, however, does not apply to casual records, but to those required by law to be kept. These include registers, ledgers, and up-to-date statements of transactions. Importantly, the duty of diligent record-keeping is incumbent on the company’s directors, but also on employees delegated to keep records or accountants. Criminal liability can be incurred both for keeping records of one’s own and also of someone else’s enterprise.

The offence is prosecuted at the request of an aggrieved person. That may be i.e. someone who has suffered financial damage as a result of basing their business on faulty documentation provided by a contractor. Improper record-keeping alone is not sufficient to prosecute an offence. The occurrence of financial damage is therefore necessary.

Interestingly, the number of economic crimes is steadily increasing and already accounts for 30% of all crimes committed in Poland. However, improper record-keeping is a very rarely detected offence. The number of prosecutions does not exceed a few dozen per year. This is linked to the professionalization of accounting services used by entrepreneurs to avoid risks. This does not change the fact that the offence of improper record-keeping is a little-known and inconspicuous act. However, it can result in severe criminal liability.

 

The full article is available in Polish here.

plpolski (Polish)

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