Case law news
The abuse of corporate assets is a specific criminal offense under French law. The abuse of corporate assets penalizes offenses by executives concerning their administrative or management acts.
Definition of misuse of corporate assets
The abuse of corporate assets is defined by article L 241-3 of the Commercial Code for SARLs and by article L 242-6, article L 242-6 for joint-stock companies. It is defined in identical terms by these two texts as the fact for the directors ” to make, in bad faith, the goods or the credit of the company, a use which they know contrary to the interest of this one, for personal gain or to promote another company or business in which they have a direct or indirect interest “. The abuse of corporate assets is thus an act which is contrary to the corporate interest, which is done in bad faith and carried out for personal ends, in personal interest.
The application of self-interest
Material interest and moral interest
Case law accepts the existence of interest in a broad way and considers that this personal interest can be material or moral. The material profit made by the manager constitutes an impoverishment of the legal person.
The abuse of social goods is not constituted only by direct personal enrichment (Cass.crim. 2 August 2007). Case law extends the concept to moral interest since a judgment of 1967 (Cass. Crim. 3 May 1967) confirmed by numerous judgments (eg. Cass. Crim. 15 September 1997, Cass. Crim. 25 October 2006). Personal interest can thus be the desire to maintain good relations with a third party close to the political parties (Crim case. September 15, 1999), the desire to seek prestige or notoriety in a personal capacity (Cass. Crim. 20 March 1997)
Hidden transactions and presumption of interest
The personal interest is presumed since a judgment of the Court of Cassation dated January 11, 1996 (Cass. Crim. Jan. 11, 1996, in the same sense June 20, 1996) ” if it is not justified that they were used in the sole interest of the company, the social funds withdrawn in an occult manner by a company manager were necessarily in his personal interest “ . This case law was confirmed by a judgment dated June 14, 2006. In the Elf case the Court of Cassation decided that the fact that the destination of funds is secret establishes the personal interest, the Court of Cassation noting that the manager “decided to pay fraudulent commissions which were deposited in hidden accounts to completely conceal their destination, thus characterizing personal interest “(Cass. Crim. January 30, 2007)
Non-exclusivity of personal interest
The person’s interest may not be exclusive. The Court of Cassation affirmed that ” no text requires that the use of corporate assets take place for exclusively personal purposes ” (Cass. Crim. 25 October 2006), cf. May 14, 2003)
The scope and concept of the use of company property or credit contrary to the corporate interest, use in personal interest
Typology of transactions particularly exposed to the misuse of corporate assets
The person responsible
The repression of the offense of misuse of corporate assets
Prescribing the abuse of corporate assets