The Directors Noncompete System

Obligation of Non-Competition of Directors, one of the main duties of directors, is a major issue in the modern corporate governance structure, due to the importance which many countries set detailed stipulations in their laws and statutes. In the new revised Company Law of China, this kind of duty of directors has been mended greatly. But it is still too general of contents, arousing difficulty in practical application. This article, through comprehensive scrutiny on legal principles and systems in the international community, probes both the intrinsic meaning and vital significance of non-competition obligation of directors and try to detect the weakness of the non-competition system in China, hoping to promote the advancement by learning from forerunners abroad. This article is divided into three parts .In Part 1, the author mainly discusses the definition, the academic foundation, and the characteristics of obligation of non-competition of directors. In Part 2, discusses the the academic foundation of noncompete obligations of in-service directors, analyze the the subject and content of noncompete obligations and improve China's relevant legislation. In Part 3, discusses the academic foundation of noncompete obligations ofout-service directors, and perfect China's legislative.