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E-library Corporate Law Embezzlement (French business law)

Embezzlement (French business law)

15 May 2012

Embezzlement is the fraudulent conversion of a company’s funds or other property by a director of the company. The following acts, inter alia, have been judged by French courts to constitute embezzlement:

  • Use, by a corporate officer, of company funds to pay the fees of its own lawyers;
  • Payment, by a company, of traffic fines imposed on its CEO, although the CEO committed the traffic offences while driving a company car;
  • Payment, by a company to its CEO, of a salary in an amount which was excessive having regard to the work provided by the CEO and the financial situation of the company;
  • The fact, for a CEO, to have personally collected the royalties paid on patents which were developed by the company;
  • The fact, for a CEO, to have paid - using company funds - the travel expenses of public officers, without any consideration other than the promise of potential future contracts;
  • Etc.

To be liable for embezzlement, the corporate officer must have acted intentionally. Such intention may however be inferred from the knowledge, which he/she had, of the damage which was caused to the company.

Embezzlement is punishable by imprisonment up to five years and a fine up to €375,000.

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