Tennessee § 39-11-404 - Corporate liability.

§ 39-11-404. Corporate liability.

A corporation commits an offense when: The conduct constituting the offense consists of an intentional failure to discharge a specific duty imposed upon corporations by criminal law; The conduct constituting the offense is engaged in, authorized, commanded or knowingly tolerated by the board of directors or by a high managerial agent acting within the scope of the agent's employment on behalf of the corporation; or The conduct constituting the offense is engaged in by an agent of the corporation acting within the scope of the agent's employment and on behalf of the corporation, and: The offense is a misdemeanor; or The offense is one defined by statute which indicates a legislative intent to impose criminal liability on a corporation. The following definitions apply in this part, unless the context requires otherwise: “Agent” means any officer, director, servant or employee of the corporation or any other person authorized to act on behalf of the corporation; and “High managerial agent” means an officer of a corporation or any other agent of a corporation who has duties or such responsibility that the agent's conduct reasonably may be inferred to represent the policy of the corporation. Acts 1989, ch. 591, § 1. Sentencing Commission Comments. This section specifically acknowledges corporate criminal responsibility. The commission recognizes the need to control and punish corporate involvement in economic offenses, including tax and security fraud, pollution, corporate support of pornography, gambling and other offenses. A corporation is made liable in three situations. Subdivision (a)(1) creates criminal liability for the corporation's intentional failure to discharge a legal duty imposed by criminal law. Subdivision (a)(2) provides liability when either the board of directors or a high managerial agent (acting for the corporation within the scope of the agent's employment) authorizes or knowingly tolerates criminal conduct. Subdivision (a)(3) holds the corporation liable for its agent's conduct if the agent was acting for the corporation and within the scope of employment, and either the offense was minor or the statute clearly makes the corporation liable for the agent's actions. Compiler's Notes. The sentencing commission terminated June 30, 1995. Sentencing Commission Comments have been retained, but do not reflect 1995 or subsequent legislation.