Legal Updates

Making significant efforts may not be sufficient to exempt a director from criminal liability for operating without a business license.

August 26, 2026
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A director of a company that operated a business for several years without a business license, as required by law, was charged with liability for violating the law, despite the fact that he had made tremendous efforts and worked tirelessly to obtain a business license.

The Court held that the director bears criminal liability because he did not do everything possible to fulfil his duty. An office holder in a corporation, including a director, is obligated to supervise and do everything possible to prevent an offense under the Business Licensing Law, including operating a business that requires a license without one.  If an offense is committed by the corporation, there is a presumption that the office holder breached his duty, unless he can prove he did everything possible to uphold it.  Here, the individual was a director and controlling shareholder who had invested significant efforts and considerable capital over many years to obtain a business license.  Nevertheless, as the business operated without a license throughout all those years -without its closure pending the receipt of a license ever being considered - the director cannot contend that he did "everything possible" to prevent the violation of the law.  Hence, he bears criminal liability for its breach.

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