The announcement of the draft amendment to the Criminal Law (XII) sparked heated discussions. Most people are in favor of the revised content, believing that it is conducive to anti-corruption and crime prevention for private enterprises, and strengthening the protection of private enterprises. Before this revision, only relevant personnel of state-owned companies and enterprises could constitute crimes of breaking trust such as illegally operating similar businesses and illegally profiting for family and friends. This is a special protection for state-owned enterprises, preventing enterprise managers from using their power for personal gain and infringing on state-owned property. However, in practice, there are many behaviors that exploit the convenience of their positions to infringe on the interests of private enterprises, but they are not protected by criminal law. Private entrepreneurs and judicial workers have called for many years, and finally received a response in the Criminal Law Amendment (12). The author believes that this is a progress in the rule of law and a milestone change in achieving equal protection for state-owned and private enterprises.

But many people also question the revision of the draft, believing that it will further deteriorate the business environment and harm the interests of private entrepreneurs. The main reason is that the equity structure of private enterprises is complex and their business models are diversified, and they are concerned that the normal investment and business behavior of private entrepreneurs will be wrongly harmed by the crime of illegally operating similar businesses and illegally profiting for family and friends. However, the author believes that the legislative purpose of the crimes of illegal operation of similar businesses and illegal profit making for family and friends, as well as other crimes of breach of trust, is clear and the targets of the crackdown are clear. Regardless of whether the ownership and management rights of private enterprises are separated, and no matter how flexible the business model is, the constituent elements of the crime of breach of trust can accurately identify criminal acts that infringe on the interests of enterprises. Therefore, expanding the scope of the adjustment of the crime of breach of trust to private enterprises not only does not harm entrepreneurs, but also better protects the interests of enterprises, thereby achieving the protection of the interests of entrepreneurs.

The following author takes the crime of illegal profit-making by relatives and friends as an example, focusing on several key elements of the crime. While demonstrating the necessity and importance of this crime in protecting the property rights and interests of private enterprises, it also demonstrates that this crime will not harm private entrepreneurs who operate in compliance with the law.

Firstly, the crime of illegally profiting for family and friends is a result offense, not an act offense. Only when the behavior "causes significant losses to the interests of the company or enterprise" constitutes the crime of illegal profit making by relatives and friends, so determining whether the interests of the enterprise have been violated is a prerequisite for incrimination. If the manifestation of the behavior conforms to the provisions of the criminal law, but does not actually infringe on the interests of the enterprise, it cannot be criminalized because it has no social harm. The behavior modes stipulated in the criminal law provisions include: entrusting the profitable business of the unit to one's own relatives and friends for operation, purchasing goods from the unit operated and managed by one's own relatives and friends at a significantly higher price than the market, or selling goods to the unit operated and managed by one's own relatives and friends at a significantly lower price than the market, or purchasing unqualified goods from the unit operated and managed by one's own relatives and friends. These behaviors may appear to have negative consequences for the interests of the enterprise, but in reality, they do not necessarily depend on what the final outcome is for the enterprise. The "loss of corporate interests" should be a substantive judgment rather than a formal judgment, otherwise it will result in some legitimate behaviors being recognized as crimes.

The owner of a company is a shareholder, so the basis for determining whether the interests of the company have been violated should be whether the interests of the shareholders have been affected. In this way, behavior should be analyzed in different contexts between sole proprietorships and joint-stock enterprises. A sole proprietorship enterprise is owned by one shareholder and bears all profits and losses on their own. Shareholders have the right to independently dispose of any property of the company without interference from others. Even if they commit the objective act of illegally profiting for their relatives and friends, even if they give the enterprise to others without compensation, it is impossible to constitute a crime because it will not harm the interests of others. In contrast, in joint-stock enterprises, the interests of shareholders are sometimes consistent, and sometimes there may be differences or even conflicts. Especially shareholders with management rights are likely to engage in illegal profit-making activities for family and friends for personal gain, directly infringing on the interests of the enterprise and thus infringing on the rights and interests of other shareholders.

When ownership and management rights are separated, management personnel should have strictly adhered to the loyalty obligation of honesty and trustworthiness. But because their personal interests and corporate interests are not completely equal, there will be a motivation to sacrifice corporate interests and achieve personal interests. If they use their position to seek illegal benefits for their relatives and friends and infringe upon the interests of the company, the interests of other shareholders will inevitably be infringed upon. Therefore, from the perspective of whether the behavior will ultimately harm the interests of shareholders, except for shareholders in the sole proprietorship, other company personnel may become the criminal subjects of the crime of illegally profiting for family and friends.

In addition, for those seemingly harmful but actually harmless behaviors, the criminal illegality is also hindered. For example, some business management behaviors may seem unfavorable to the enterprise, but they are implemented by the enterprise for resource exchange, production transformation, or for greater long-term benefits, which is beneficial to the enterprise in terms of the final effect. The nature of these behaviors should not be limited to superficial direct effects, but should be placed in the specific situation at the time and comprehensively analyzed for their overall effects.

Secondly, the collective decision-making process of the unit can also deter illegality. The crime of illegally profiting for relatives and friends is a natural person crime, and there is no unit crime. This crime targets dishonest behavior that infringes on the interests of the enterprise. The enterprise is a direct victim, so it is impossible for the enterprise to establish a unit crime again. So it's important to distinguish between individual behavior and unit behavior. The main difference between individual behavior and unit behavior depends on whether the relevant personnel have made a unanimous decision in accordance with the company's articles of association and internal decision-making procedures. Because the behavior of the unit takes into account the interests of all parties, reflects their demands, and represents the collective will of the unit, it is not possible to hold an individual accountable. If a decision is made by the shareholders' meeting, board of directors, or general manager's meeting, which is the authority of a company, through collective decision-making, it can be considered as a unit action, excluding the possibility of individual action. However, if the perpetrator engages in fraud by deceiving the unit to fulfill the collective decision-making process and commit the aforementioned breach of trust, it can still constitute a crime.

In joint-stock enterprises, there is a diversification of stakeholders, and sometimes there is a fierce game between all parties. If a party takes advantage of its control or dominant position over the enterprise and insists on infringing on the interests of other shareholders through a certain decision despite clear opposition from other parties, it can also constitute the crime of illegally making profits for relatives and friends. For example, the major shareholder of Company A decides to establish a new company controlled by their relatives and transfer a certain profitable business to the new company. Other shareholders clearly expressed opposition to this decision, but the majority shareholder used their controlling position to forcefully pass the decision. Although major shareholders have the right to vote and make decisions in accordance with the Company Law, it does not mean that they can use this right to engage in actions that infringe on the rights and interests of others. In this situation, the behavior of major shareholders can constitute a crime.

Finally, it depends on the subjective aspect of the behavior, which is the motivation and purpose for which the actor implements the behavior. The composition of a crime requires consistency between the subjective and objective aspects. It is the subjective aspect of the crime of illegally profiting for relatives and friends, and requires the perpetrator to have the purpose of illegally profiting for them. If the objective aspect of a certain behavior appears to be unfavorable to the enterprise, but the subjective aspect of the actor does not have the purpose of illegally profiting for relatives and friends, then the judgment of the behavior should be cautious. In addition to the actor's self statement, it is also necessary to make a comprehensive judgment based on the context, decision-making process, and final outcome of the behavior at the time. The illegality of actions carried out by the perpetrator solely for the benefit of the enterprise without any selfish intention shall be ruled out. Nowadays, many enterprises operate as a group, and the numerous companies within the group have both relatively independent interests and common interests of "sharing weal and woe". An isolated behavior may be detrimental to the interests of the company, but when viewed as a whole group, it may be a favorable strategy. So the purpose of the actor should be comprehensively and substantively viewed in conjunction with the actual situation of the company, and cannot be one-sided or formalized.

The above author has conducted a brief discussion on the crime of illegally profiting for family and friends from several aspects: the subject of the crime, the consequences of damage, decision-making procedures, and behavioral motives. Through this analysis process, it can be seen that private enterprises, like state-owned enterprises, engage in dishonest behavior that infringes on the interests of enterprises, and it is necessary to crack down on it. At the same time, the main subject of this crime is the management personnel under the separation of ownership and management rights mode, objectively causing damage to the enterprise and its shareholders, and subjectively having the purpose of making profits for relatives and friends. Based on the analysis of these constituent elements, the author believes that unless it is a misinterpretation or malicious use of the law, the honest and trustworthy business behavior of private entrepreneurs will not be wrongly punished.