A Legal Study On The Corporate Opportunity

The doctrine of corporate opportunity is a standard part of corporate law in the common law system. At its most general level, it says that a director cannot divert to himself opportunities directed to the corporation. It's an important part of the loyalty duties beared by the directors. Through its 100-year-history, the controversies over some basic theory never stopped. As a part of civil law system, the former corporate law of China had no specific rules about this doctrine. However in 2005, an amendment was made to the corporate law, in which the doctrine was provided in the article 149, that the directors and officers cannot'take advantage of his specific status in the corporation to usurp a business opportunity belonged to the corporate for his or other's benefits'. The roughness of the provision and the divergences in the theories of the doctrine make it difficult to apply the doctrine correctly. Consequently, a research on the doctrine is particular necessary in order to guide the practice.This dissertation discusses the doctrine mainly on the basis of the American statutes and case law and the particular conditions of China as well, which consist of two parts: part one is the introduction, and part two is the text. The structure of the text is as follows:The Chapter One is a brief of the history of the Corporate Opportunity Doctrine. This chapter will introduce the appearance and development of the Corporate Opportunity Doctrine in the USA, as well as the situation that the Corporate Opportunity Doctrine was introduced into the continental counties, such as German and Japan.The Chapter Two is the analysis on the legal basis of the corporate opportunity which includes two parts. Part one is the jurisprudential basis of the doctrine, that is the necessity of the protection based on the nature of the corporate opportunity and the duty of loyalty based on the special relationship between the directors and the corporate. Part two illuminates the differences between the doctrine and other similar duties like'Prohibition of business strife'and'Interested director transactions'.The Chapter Three focus on the standard for recognition of the corporate opportunity, which is the core of this Article. Upon description of the standards in the case-law counties, the author will analyze the factors to be considered in said recognition.The Chapter Four is the discussion on the use of the corporate opportunity. The author will analyze the conditions and the procedures of the directors'using of the corporate opportunity.The Chapter Five introduces the disclosure rule in the doctrine of corporate opportunity. The directors have to choose to disclose or not the business opportunity coming to him. Upon this problem, ALI and Delaware have very different attitudes.The Chapter six focuses on the legal responsibilities and remedies in the case of the directors'usurpation of corporate opportunity.The Chapter Seven puts forward the introduction of foreign legal system of the corporate opportunity. The author will analyze on the China's actual situation and make a suggestion.