In plain words: when the ED turns to a company, directors and officers feel it personally. Understanding when a company — and when you — can be liable is the first step to protecting both.
Companies can be accused too
The PMLA applies to companies, not just individuals. Where an offence is committed by a company, the persons in charge of and responsible for its conduct at the relevant time can also be held liable — which is why directors and key officers are drawn in.
When a director is personally liable
- If they were in charge of and responsible for the company's business when the offence occurred.
- If the offence was committed with their consent, connivance or neglect.
- A director with no role or knowledge has a defence — but must be able to show it.
A director's survival steps
- Get legal counsel for the company and for yourself — interests can diverge.
- Preserve records — never destroy or alter documents; that is a serious offence.
- Map your role — document what you were and were not responsible for.
- Cooperate with summons while protecting your rights.
- Protect business continuity — address any attachment of business assets promptly.
Protecting the business
An attachment or freeze can cripple operations. Early steps — contesting attachment, seeking to keep the business running, and ring-fencing legitimate assets — can be the difference between survival and collapse.
Frequently asked questions
Can a company be prosecuted under PMLA? Yes — companies are covered, along with responsible officers.
Am I liable just because I'm a director? Not automatically — liability turns on your role, knowledge and responsibility.
Should the company and I share one lawyer? Often separate advice is wiser, as interests can differ.
How Vakil Help Desk helps
Vakil Help Desk advises and defends clients at every stage of a PMLA matter — summons, attachment, arrest, bail and trial. If the ED has contacted you or you fear action, we can help you protect your position.
This article is for general legal awareness, not individual legal advice. PMLA proceedings move fast and the law is evolving through court rulings and notifications, so the right step depends on your facts and the current position. If you have received an ED notice or fear action, consult a lawyer immediately.