In 2024–2025, as law enforcement agencies intensify their scrutiny of large businesses, the risk of criminal prosecution for company executives is on the rise. The focus is on top managers who make business decisions, attract investments, interact with government agencies, or manage financial resources.

This issue is particularly relevant for companies that:

• participate in public procurement;
• have foreign beneficiaries or collaborate with donors;
• enter into major financial or foreign trade contracts;
• receive government assistance, grants, or investments.

Key challenge: Where is the line between business risk and abuse of authority?

LEGAL GROUNDS FOR CRIMINAL PROSECUTION OF EXECUTIVES

The Criminal Code of Ukraine contains a number of articles that may apply to top executives of private companies:

• Article 364 of the Criminal Code – abuse of official position;
• Article 191 of the Criminal Code of Ukraine – misappropriation, embezzlement, or acquisition of property through abuse of official position;
• Article 367 of the Criminal Code – professional negligence;
• Article 209 of the Criminal Code – legalization (laundering) of proceeds obtained by criminal means.

The existence of a formal employment contract or a position within the company is sufficient grounds for holding someone liable if it is established that the manager personally made a questionable or loss-inducing decision.

WHAT IS THE “MECHANISM” OF PERSECUTION?

Most often, the process goes like this:

1.      It starts with an audit — the State Tax Service, the Economic Security Bureau, or other agencies analyze tax data or business transactions.

2.      Next—the initiation of criminal proceedings under one of the aforementioned articles.

3.      Suspicion against a top manager — based on the investigators’ findings, even without a conviction.

4.      Pressure through preventive measures — personal obligations, arrests, searches.

Thus, a management decision made under market conditions could be interpreted as criminal—without a proper legal analysis of the motives and circumstances.

THE MOST COMMON “RED FLAGS” IN CASES AGAINST TOP EXECUTIVES

According to court records from 2024–2025, the most common grounds for criminal prosecution include:

• entering into unprofitable contracts without proper justification;
• transferring funds to companies that appear to be shell companies;
• manipulation of VAT or tax liabilities;
• payment of dividends in the absence of profits;
• a change in the ownership structure that has not been agreed upon with the shareholders;
• breaches of financial discipline in connection with government contracts.

HOW CAN A COMPANY PROTECT ITS EXECUTIVES?

Legal protection for management is not a one-time action, but rather part of the company’s systematic policy. The main protective measures include:

• legal documentation of all decisions (minutes, justifications, legal opinions);
• internal compliance procedures for vetting counterparties and approving high-risk contracts;
• implementation of a risk management policy;
• independent audit of financial and organizational decisions;
• Preliminary legal assessment of business transactions.

In addition, it is necessary to prepare in advance a plan of action in the event of investigative actions or the service of a notice of suspicion.

HOW CAN A LAW FIRM HELP DEFEND MANAGEMENT?

ARMADUMLAWYERS provides comprehensive legal support to companies and top management:

• assessment of criminal law risks for management decisions;
• drafting internal policies and regulations;
• defense in criminal proceedings;
• preparation for inspections by the State Energy Regulatory Commission, the State Tax Service, and the National Agency for Corruption Prevention;
• establishing a system of legal compliance and personal protection for executives;
• Interaction with the media in high-profile cases.

CONCLUSIONS

In 2025, a management decision is not just a business strategy, but also a potential legal threat. On the one hand, there is pressure from regulatory authorities; on the other, there are the expectations of shareholders, creditors, and investors. Under such conditions, legal foresight becomes the key to the security of the business and its leadership.

Legal support from ARMADUM LAWYERS is not only about providing defense when a threat arises, but also about creating an environment in which management decisions do not require explanation to an investigator.