The party concerned, but the real test is

The corporation is responsible not only for what its agents do, but also for the manner in which they do it. If its agents do an act negligently or fraudulently that which they might have done lawfully and with authority the law will hold the corporation liable.

The practicability of enforcement of punishment is not the real criterion of liability to criminal prosecution for an offence committed by the party concerned, but the real test is the capacity of committing an offence and, if a corporation is capax doli and actually commits an offence, it must be held liable to criminal prosecution.

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Two objections are raised with regard to the fixing criminal responsibility on a corporation. The first is whether it is natural justice to punish a corporate body for the acts of its agents, when the ultimate result of such punishment is bound to fall on the shoulders of the beneficiaries.

The objection is not sound, for, according to Salmond, the representatives of a corporation, though in legal theory its agents, are in fact the agents of the beneficiaries. Just as the principal is held liable for the acts of the agents, so also in the case of a corporation it is held liable for the acts of the directors.

The second objection is that a corporation which from its very nature is incapable of acting or authorising, should not be made liable for wrongful acts of its agents outside the limits of their authority.

Salmond offers two different solutions for this objection. He says that, in the first place, although a fictitious person cannot do acts which go beyond the scope of his authority, he certainly can fail to do what he has been authorised to do, and can be punished for such omissions.

And in the second place, the liability of a corporation for the acts of its agents is a perfectly logical application of the law as to an employer’s liability for the acts of his servants. A master is liable not only for the acts which the master has authorised him to do, but for the way in which the servant does it. The corporation is liable because it authorised its agents to commit the wrongful act, but because it was wrongful for it to select careless and dishonest agent!