When Can a Company Director Go to Prison in Spain?

One of the most frequent questions we receive from business owners and executives is: can a company director go to prison? The answer is unequivocally yes. Since the 2010 and 2015 reforms of the Spanish Criminal Code, company directors face significant personal criminal exposure.

The Legal Framework

Art. 31 CP establishes that whoever acts as a de facto or de jure administrator of a legal entity is personally liable for criminal offences committed even if the legal circumstances do not personally apply to them. This means that corporate structure does not insulate directors from criminal prosecution. The company itself may also be prosecuted in parallel under Art. 31 bis CP, but neither route excludes the other: the individual director and the legal entity answer separately.

De Facto and De Jure Directors

Art. 31 CP deliberately covers both the de jure director — the person formally appointed and registered — and the de facto director: whoever actually takes the management decisions, even without holding any formal title. Resigning from the board or placing a frontman in the registry therefore does not remove criminal exposure if the person continues to run the company in practice. Conversely, a purely formal director who never intervened in the decision under scrutiny has a solid line of defence, because criminal liability is personal and cannot be presumed from the title alone.

Most Common Crimes for Directors

• Unfair administration (Art. 252 CP): Disposing of company assets in breach of loyalty duties. Penalty up to 6 years for amounts over €250,000.
• Accounting fraud (Art. 290 CP): Falsifying annual accounts or financial documents. Penalty 1-3 years.
• Tax fraud (Art. 305 CP): Defrauding the Tax Authority of over €120,000. Penalty 1-5 years.
• Money laundering (Art. 301 CP): Using company structures to launder criminal proceeds. Up to 6 years.

How Compliance Protects Directors

Art. 31 bis CP provides that both the company and its directors can be exempt from criminal liability if an effective compliance program was in place that was genuinely designed to prevent the crime. This is not merely a technical formality — courts look at whether the program was real and effective, not just a document collecting dust.

Defence Strategies for Directors

• Attacking the subjective element: the prosecution must prove that the director knew of and willed the unlawful conduct; a poor business decision, by itself, is not a crime.
• Personal non-intervention: identifying who actually adopted the decision within the company, since liability cannot be attributed collectively to the whole board.
• Real economic rationale: in unfair administration cases (Art. 252 CP), showing that the transaction had a genuine business justification and was not a disposal against the company's interest.
• Effective compliance: documenting that the programme contemplated by Art. 31 bis CP was actually implemented and supervised, and that the offence required circumventing its controls.

What to Do if You Are Under Investigation

These proceedings usually begin with a long investigation phase in which the accounting and corporate documentation of the company is examined. The statement of the director as a suspect is a decisive moment and should never be faced without having studied the case file beforehand. An early, well-documented technical defence — expert accounting reports, board minutes showing how the decision was actually taken, and evidence of the compliance programme in operation — frequently makes the difference between the case being dismissed during the investigation and the director sitting through a trial. The earlier that material is gathered, the more credible it is.