Section 487 — Offences by companies. Successor to s.278B of the 1961 Act.
Section 487 is in Chapter XXII — Offences and Prosecutions, which runs from section 473 to section 498.
Sub-section (1) deems both the company and every person who at the time of the offence was in charge of, and responsible to, the company for the conduct of its business, guilty of an offence under the Act committed by the company. Sub-section (2) gives that person a defence — proof that the offence was committed without his knowledge, or that he exercised all due diligence to prevent it. Sub-section (3) operates despite the first two sub-sections: where the offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other officer, that person too is deemed guilty. Sub-section (4) deals with offences punishable with imprisonment and fine — the company is punished with fine, while the persons in sub-sections (1) and (3) remain liable to be proceeded against and punished under the Act. Sub-section (5) widens "company" to any body corporate and to a firm and an association of persons or body of individuals whether incorporated or not, and defines "director" as a partner in a firm and, for an association or body, any member controlling its affairs.
A company cannot be imprisoned, so the section attaches personal criminal liability to those running it, with a due diligence escape for the person merely in charge and no escape at all where consent, connivance or neglect is proved. The extended definitions ensure firms, associations and bodies of individuals cannot avoid the section by not being companies.
If you are in charge of and responsible for the conduct of the business, you are proceeded against alongside the company automatically — the burden is on you to prove absence of knowledge or all due diligence, which means keeping a record of the compliance systems you put in place. The sub-section (2) defence is of no help against sub-section (3), which operates "irrespective of" it, so a director shown to have consented, connived or been negligent is caught regardless. Partners in a firm and controlling members of an association are directors for this section, so the exposure is not confined to companies in the corporate sense. Where the offence carries imprisonment and fine, the entity pays a fine and the individuals face the full punishment.
A company commits an offence under the Act. Sub-section (1) puts both the company and the person who at that time was in charge of, and responsible to, it for the conduct of its business in the dock, and that person escapes only by proving under sub-section (2) that the offence was committed without his knowledge or that he exercised all due diligence to prevent it. A director shown to have consented to it, connived at it, or whose neglect it is attributable to has no such escape — sub-section (3) applies irrespective of sub-sections (1) and (2). Where the offence is punishable with imprisonment and fine, sub-section (4) punishes the company with fine while leaving those individuals liable to be proceeded against and punished, and none of this is confined to companies: sub-section (5) reads a firm and an association of persons or body of individuals into “company”, and a partner into “director”.
In a prosecution launched under Chapter XXII, where the complaint names the individuals alongside the entity — a partner of a firm, or a member controlling the affairs of an association, is exposed in the same way a director is. It is not an assessment or penalty provision: you meet it before the court trying the offence, not in a notice or an order of assessment.
every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence
See the full 1961 to 2025 concordance.