One of the protagonists of a cult Polish production of the 1990s stated that “Order in files must be, regardless of the system”. Although the quote referred to the political system, it is also relevant in the context of conducting business activity. Proper record-keeping for an entrepreneur (e.g. a limited liability company) is not only a way to optimise working time. Although the quoted quote from the film ‘Psy’, directed by Władysław Pasikowski, remained ambiguous, in reality, irregularities in this area may give rise to organisational chaos and even become the basis for criminal liability, including, for example, under Article 303 of the Penal Code.
1 What is the offence of so-called “improper documentation”?
The offence under Article 303 of the Criminal Code is included among the prohibited acts referred to as economic crimes. The legislator, in order to protect correct economic turnover, decided that failure to keep, unreliability or untruthfulness of records will entail criminal liability in the event that it causes damage to a natural or legal person or an organisational unit without legal personality.
From the point of view of criminal liability in this case, the result of the act is an extremely important criterion. The commission of an offence under Article 303 of the Penal Code depends on the occurrence of the result of improperly kept documentation, e.g. of a limited liability company. – there must be a pecuniary damage on the part of the third party or the ‘(in)documented’ entity.
What exactly constitutes damage under this provision?
At this point, there is a kind of diffusion of branches of law, because in the case of an offence under Article 303 of the Criminal Code, ‘damage’ should be understood in civil law terms. Therefore, as a result of failure to keep or unreliable keeping of records, there must be actual damage to the property or loss of profit on the part of any natural or legal person or organisational unit (e.g. contractors), but damage may also be caused to the entity to which the records relate (e.g. a limited liability company by a member of its management board)..
Important! Pursuant to Article 303 of the Criminal Code, a person who causes damage to the State Treasury in the form of tax loss or depletion of other public law levies shall not be liable[1]. In such a case, classification under criminal tax law may be considered. However, the situation is different if the damage related to public law liabilities arises on the part of the taxpayer, e.g. a company.
[1] Judgment of the Supreme Court – Criminal Chamber of 19 July 2006, III KK 55/06.
Example: Mr A, a member of the management board, is responsible for keeping the business records of company X sp. z o.o. By neglecting his duties, he fails to determine the amount of monthly advance payments for income tax on time, as a result of which the company does not pay them on time. As a result, X sp. z o.o. is obliged to pay interest for late payment → it is this interest charge that constitutes the damage caused to X sp. z o.o. by Mr A, which gives rise to his criminal liability under Article 303 of the Criminal Code.
2. Document or documentation?
In everyday language, document and documentation are considered synonymous terms and are used interchangeably. However, the inclusion of these terms by the legislator in Article 303 § 1 of the Criminal Code was not accidental and was not related to maintaining the stylistic order of the provision. In the context of the prohibited act in question, the meaning of these terms is completely different.
Business documentation is a term that has not been defined by the legislator and therefore poses problems in practice. An attempt at interpretation was made by the Supreme Court, which indicated that it is documentation required by statutory provisions, which records activities undertaken in connection with business activity[2].
- Therefore, even if certain records and documents are directly related to business activity, the answer to the question of whether their keeping results from an obligation imposed by the legislator is relevant from the point of view of criminal liability under Article 303 of the Criminal Code.
Document has a legal definition in criminal law and can be found in Article 115 § 14 of the Criminal Code: ‘A document is any object or other recorded medium with which a specific right is associated or which, due to its content, constitutes evidence of a right, legal relationship or circumstance of legal significance.’
- This term has been clarified by the legislator for the purposes of criminal law, thus definitions from other branches of law (e.g. civil or administrative law) or colloquial language are irrelevant.
- The information carrier may take various forms, both paper (e.g. a sheet of paper, a photograph) and electronic (e.g. a CD, a USB flash drive).
[2] This issue is addressed in 1) the Supreme Court ruling – Criminal Chamber of 2 February 2009, V KK 330/08, 2) the Supreme Court ruling – Criminal Chamber of 19 July 2006, III KK 55/06.
3. What does acting ‘against’ documentation entail and who should be on guard?
The legislator has provided for three types of activities directed ‘against’ documentation which, if they result in financial damage, may give rise to criminal liability.
| Failure to Maintain Documentation |
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| Inaccurate Maintenance of Documentation |
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| False Documentation Practices |
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| Failure to Maintain Documentation |
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| Inaccurate Maintenance of Documentation |
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| False Documentation Practices |
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5. Incorrect documentation has many names.
The legal classification of incorrect record keeping depends largely on the internal convictions of the perpetrator at the time of the act, as well as the damage caused.
The offence under Article 303 of the Criminal Code can only be committed intentionally. Therefore, not every case of incorrect record keeping gives rise to criminal liability.
In addition, damage suffered by a third party or the entity to which the documentation relates must be demonstrated. The absence of actual loss or loss of potential benefits, combined with negligence in ensuring the correctness of documentation, may give rise to liability under, for example, the criminal provisions of the Accounting Act.
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Michał Busz
Swoje dotychczasowe doświadczenie zdobywał w zakresie szeroko rozumianej obsługi spółek oraz spraw z zakresu ochrony konsumentów. Wśród jego zainteresowań znajdują się zagadnienia prawa handlowego oraz karnego ze szczególnym uwzględnieniem przestępczości białych kołnierzyków.
