On Corporate Opportunity Doctrine

Business opportunities which contain a large number of potential property interests are the basis of enterprises who want to survive and develop in the period of market economy. It is also the main target that the business subjects battle for. However, in addition to encounter external contention from commercial rivals, the company's business opportunities are also faced with internal danger of capture from company managers. Especially in the modern corporate governance structure, with the separation of ownership and management, the company is actually controlled by the company directors, managers and other company managers. So it provides facilitating condition for usurping the company opportunities, that the usurpation of the company opportunities is endless in practice. In order to regulate such behavior, Anglo-American Law develops the Corporate Opportunity Doctrine in the long-term judicial practice. The doctrine prohibit the company directors ,managers and other company managers vesting in the company's business opportunities which own to company and benefit from business opportunities. We introduced Corporate Opportunity Doctrine roughly when our Corporation Law was amended in 2005, but what we introduced is so rough and obscure that it lacks of practicability and it needs more modification.This dissertation uses the comprehensive analysis methods such as theoretical analysis method, comparative analysis method, logic analysis method, positive analysis method, firstly analyzes the theoretical basis of Corporate Opportunity Doctrine, then discusses the specific application of the rule, finally expounds the problems of Corporate Opportunity Doctrine which we introduced and makes suggestions on consummating Corporate Opportunity Doctrine. Besides the introduction, the dissertation contains four parts.Chapter One is analysis on the theoretical basis of Corporate Opportunity Doctrine. Firstly, the paper introduces the meaning of Corporate Opportunity Doctrine and its historical development, then the rules by analyzing the company the opportunity of two related concepts with the Duty of the links and differences, and clarified the relationship between them. Then, from two angles of economics and law to explore the theory behind the causes of the rule. This view of agency theory in economics and law on the principle of good faith, the company management personnel of the fiduciary duty theory as against company management usurped corporate opportunities theory. Separation of ownership and management as well as agents and principals, goals inconsistent, resulting in agency problems, which led to a high agency costs. Therefore, in order to reduce agency costs, the company will have the opportunity to produce the necessary rules. The usurpation of corporate opportunity hide the way against the company's underlying assets, so the company opportunity rule is the principle of good faith in civil law as natural extension, it is the duty of loyalty management company and the content.Chapter Two, the part surrounding the theoretical framework and application of the Corporate Opportunity Doctrine, draw on practical experience of extraterritorial laws, to start on. This chapter applies the rules of the company opportunity as the main line, followed by opportunities for the company discussed the obligations of the principal Rules, Standards, and exceptions. The main obligations of the rules of the company opportunity not only to contain the directors, senior management should be extended to controll shareholders and supervisors. Of course, as the directors of the species, their fuction are different, so the opportunity for the company's application of the rules should not be generalized.This article was carried out to discuss the situation. Identification of opportunities for the company standard, Anglo-American case law and the formation of a variety of industry standard theory, are: interest or expected interest criteria, scope of business standards, fair standards, two-step analysis, abuse of rights theory, double standards, different companies have different standards, this article gives a comprehensive system of its elaboration. Opportunities for the company's exceptions to the rule, the major companies have abandoned the use and the company can not use both. This experience, combined with extra-territorial law, constitute an exception of the qualifications required and the procedures, the two were described.Chapter Three discusses our established legislative status of the Corporate Opportunity Doctrine and it's problems in the application. The Corporation Law, which is revised in 2005, start the Corporate Opportunity Doctrine.The Corporate Opportunity Doctrine has been introduced in our legalsestem,and it provides a legal basis to regulate the company managers'behavior of usurp the corporate opportunity. Unfortunately in our country established rules of corporate opportunity, there are deficiencies in many aspects of office, which to some extent affected the Gai rules of the specific application. Specifically as follows: 1, the main obligations are not comprehensive, only provides directors and senior management bear the obligation to cover a narrow range. 2, found in Standard may result in different co-contracting, led to judicial confusion. 3, exception unreasonable, must be opportunities for the company and the company agreed to be used only as a consent authority shareholders, making the company the opportunity to use exceptions is difficult to achieve, thereby reducing the social efficiency.Chapter Four, in response to these deficiencies, the dissertation puts forward some suggestion on consummating the doctrine. This is not only the starting point, but also the ultimate goal of writing this article. This paper argues that first, the main obligations should be improved, should be controlling shareholders, supervisors into the company's opportunities within the regulatory scope of the rules. Second, identify opportunities for improving standards of the company. This part of the standard theory of identified, determined whether the opportunity is the company a chance, this opportunity should be whether the job-based identity management personnel to achieve and whether the activities with the company with close links to two aspects of reason. For the company to abandon the use or not use the company's opportunities, under certain conditions, and management personnel can use. Therefore, the position should be established identity and business activities to identify the combination of the standard corporate opportunities. Third, the perfect opportunity to rule on the exceptions to the company requirements. The company management personnel who meet the program conditions can use the opportunity which the company can not use or would give up.