On The Corporate Law's Regulation Of Usurping Corporate Opportunities

The doctrine of corporate opportunities provides that corporate fiduciaries cannot, without consent, divert and exploit for their own benefit any opportunity that should be deemed an asset of the corporation. It is one facet of the general duty of loyalty that directors and officers owe to their corporation. In 2005, an amendment was made to the corporate law of the People's of Republic of China, in which the doctrine was regulated. However, what we introduced is so rough and obscure that it lacks of practicability and needs more modification.Through the comprehensive analysis methods, such as mainly theoretical analysis method, comparative analysis method, this paper firstly analyzes the theoretical basis of Corporate Opportunity Doctrine, then discusses the specific application of the rule, and finally expounds the problems of Corporate Opportunity Doctrine which we introduced, and makes suggestions on consummating Corporate Opportunity Doctrine. Besides the introduction and conclusion, the dissertation contains five chapters.The Chapter I of this Article is analysis on the theoretical basis of Corporate Opportunity Doctrine. Firstly, the paper introduces the meaning of Corporate Opportunity Doctrine and its historical development, and then, through analysis on other two related concepts, clarifies the relationship between them.Chapter II discusses the corporate opportunity tests, which are applied to determine whether a director has liabilities under the doctrine. The tests are few, but courts have created certain nuances within the general tests that will be explored. Chapter III is a discussion about the fiduciary Defenses to Corporate Opportunity Claims. This section of the Article addresses the circumstances under which a director will be allowed to develop an opportunity on an individual basis, despite the fact that the corporation had a prior claim to the opportunity. Under existing law, a corporate fiduciary generally is free to exploit a corporate opportunity on an individual basis if he has tendered the opportunity to the corporation and the corporation has rejected the opportunity. This section will consider issues relating to the tender and rejection of corporate opportunities.Chapter IV addresses the issue of the imposition of liability of directors resulting from a breach of the duty of loyalty, such as usurping the corporate opportunity.The Chapter V focuses on the shortcomings in current approaches concerning Corporate Opportunity Rules provided in the corporate law of China. And then some suggestions are put forward to perfect the system of duties of loyalty.