On The Relationship Between The Non - Competition Obligation Of Directors And The Theory Of Opportunity

In the modern company, the governance structure determines the director’s central position during the daily operation of the company. On the one hand, such position may facilitate the director to make the decisions on the affairs inside and outside the company, grasp a fleeting business opportunity, and win the leading edge in the increasingly fierce market competition. On the other hand, such position also opens a door for the conducts of the director to violate the principle of good faith and transfer the company’s interest to himself or any third person. In order to ensure that director acts positively in the best interest of the company and avoid any actual or potential conflict between the director’s interest and company’s interest, two legal systems have designed the non-competition obligation for the director and corporate opportunity doctrine to regulate the conduct of the director to break his duty of loyal. China’s new corporation law prescribes two systems at the same time, which may have a positive effect on reinforcement of regulation of the director’s conduct and perfect of the governance structure of the company. However, in terms of question on the relationship of two systems in our law, both theoretical and practical circle lack the systematical and deep analysis. The author writes this thesis to analyze the connection between two systems in our law from various perspectives, resolve the disputes about the application area of both systems, analyze the ambiguous description of two systems’ relationship in the corporation law of China, and point the direction for the judicial practice regarding the application of two systems.This thesis is divided into five chapters apart from introduction and conclusion parts. And the content of each chapter goes as follows:Chapter One mainly introduces the fundamental theory and system framework of the non-competition obligation for the director in civil law system. Analyzing the legal features and system values of the non-competition obligation for the director, contrasting which with certain relevant concepts created in common law system and laying the theoretical basis for the following discussion about the relationship between two systems.Chapter Two mainly introduces the fundamental theory and system framework of the corporate opportunity doctrine. Analyzing the legal features and system values of the corporate opportunity doctrine, mainly elaborating the judging rule for the corporate opportunity and exception causes applied by the countries in common law system and the situation that China adopts corporate opportunity doctrine and making the theoretical support for the deep comparison between two systems.Chapter Three illustrates the theoretical relationship between two systems. Through comparing three main doctrines regarding the relationship between two systems, the author analyze the conduct scope each system applies and their relationship in the theoretical perspective, therefore demonstrating the necessity for China to introduce the corporate opportunity doctrine.Chapter Four illustrates the relationship between two systems at laws in China. The descriptions of the regulations of the non-competition obligation for the director and corporate opportunity doctrine exist ambiguity in the existing law of China, under which the corporate opportunity doctrine can also be interpreted as the detailed prescription for the non-competition obligation for the director. Through analyzing the law-making situations of the introduction of the corporate opportunity doctrine in the main countries of civil law system and the procedure for amending the corporation law in China, the author put forward the reasonable interpretation towards the aforementioned ambiguity.Chapter Five illustrates the relationship between two systems when they are applied at judicial situation. Within the conduct scope where both two systems may regulate at the same time, two systems may come across the liability coincidence. Through comparing the three doctrines dealing with the liability coincidence, the author puts forward two different ways to resolve the civil liability coincidence, specifying the application relationship of two systems in the judicial practice in China.