§706-608  Penalties against corporations and
unincorporated associations; forfeiture of corporate charter or revocation of
certificate authorizing foreign corporation to do business in the State. 
(1)  The court may sentence a corporation or an unincorporated association
which has been convicted of an offense to be placed on probation as authorized
by part II of this chapter or to be fined as authorized by part III of this
chapter.



(2)  When a corporation is convicted of a crime
or a high managerial agent of a corporation, as defined in section 702-229(3),
is convicted of a crime committed in the conduct of the affairs of the
corporation, the court, in sentencing the corporation or the agent, may order
the charter of a corporation organized under the laws of this State forfeited
or the certificate of a foreign corporation authorizing it to do business in
this State revoked upon finding:



(a) That the board of directors or a high managerial
agent acting in behalf of the corporation has, in conducting the corporation's
affairs, intentionally engaged in a persistent course of criminal conduct, and



(b) That for the prevention of future criminal
conduct of the same character, the public interest requires the charter of the
corporation to be forfeited and the corporation to be dissolved or the
certificate to be revoked.



(3)  The proceedings authorized by subsection
(2) shall be conducted in accordance with the procedures authorized by law for
the involuntary dissolution of a corporation or the revocation of the certificate
authorizing a foreign corporation to conduct business in this State.  Such
proceedings shall be deemed additional to any other proceedings authorized by
law for the purpose of forfeiting the charter of a corporation or revoking the
certificate of a foreign corporation. [L 1972, c 9, pt of §1; am L 1986, c 314,
§18]



 



COMMENTARY ON §706-608



 



  Subsection (1) provides for the ordinary disposition in cases
of convicted corporations and unincorporated associations, i.e., suspended
sentence or fine.



  Subsection (2) provides for further sanctions in cases of
corporate crime; dissolution of the corporate entity in the case of domestic
corporations and revocation of a foreign corporation's right to do business
within the State.  Such sanctions are obviously severe and should be reserved
for cases involving (1) intentional and persistent misconduct, and (2) a need
for public protection which cannot be otherwise met.  However, "persistent
misconduct need not be restricted to prior convictions of the corporation or
its agents for criminal offenses."[1]



  The concentration of corporate wealth would tend to indicate
that sanctions involving merely a fine may not be sufficient.  However,
although the Code authorizes forfeiture of the corporate charter and revocation
of a foreign corporation's right to do business in the State, these sanctions
are not automatic upon conviction or even a finding of persistent misconduct. 
Here, as in other areas, the Code provides a flexible approach by vesting
discretion in the court.



  Subsection (3) provides that involuntary dissolution in a
penal case shall follow procedures authorized by law for involuntary
dissolution in a civil context.



  Unlike the Model Penal Code, which provides for institution
of separate proceedings for forfeiture or revocation, this Code authorizes the
sentencing court to decree forfeiture of a domestic corporate charter or
revocation of a certificate of foreign corporation authorized to do business in
this State.  Unlike many jurisdictions in the United States, which the Model
Penal Code was drafted to accommodate, criminal cases in Hawaii are not handled
by courts of limited jurisdiction.  The criminal calendar is rotated annually
and neither lack of judicial expertise nor lack of judicial power would suggest
that in Hawaii forfeiture or revocation should be handled by a separate court.



 



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§706-608 Commentary:



 



1.  M.P.C., Tentative Draft No. 4, comments at 203 (1955).