The Exercise Of The Company Disgorgement

Disgorgement of corporation is originated in the disgorgement of short-swingtrading in the securities law. It is a right to special relief given to the company by thelaw. When the company’s directors, supervisors, senior management personnel andother internal staff damage the interests of the company, the company can use thisright to self-relieve. Broadly speaking, disgorgement of corporation includes thedisgorgement on the company law and the disgorgement of short-swing trading in thesecurities law. But academic research is mostly concentrated in the disgorgement ofshort-swing trading. The related legislative technique is more mature. Disgorgementon the company law is relatively backward in terms of theoretical research andlegislative requirements. Although our “Securities Act” and “Company Law” stipulatethat the company can use its disgorgement, both of the laws have short-comings in theregulation of the disgorgement. These short-comings will cause difficulties to theperformance of the company disgorgement and judicial practices. They also preventthe disgorgement of corporation to perform its functions. Therefore, in order toestablish a complete set of strict, simple and applicable rules of the disgorgementsystem, this paper chooses the “the exercise of the company disgorgement” toresearch from the broad perspective.The author uses the comparative analysis, empirical analysis, inductive anddeductive methods and other research methods. In this paper, on the basis of referencefor academic achievements at home and abroad and legislative, it will be divided intofive sections to discuss. The first part will define the company disgorgement from twoaspects---the legal concepts and legal nature of the disgorgement, which will providea theoretical basis for later research. The second part is to discuss the exercise bodywho will exercise the company disgorgement. The focus of this part is to investigateand assess which organizations will on behalf of the “company” to exercise thedisgorgement. And it will also discuss the system of shareholders of subrogation toexercise the disgorgement. In the third part, the paper will elaborate the scope of the subjects to whom the company disgorgement is used from the scope of the human andmaterial rang. The fourth part is to discuss the exercising conditions and legal reasonsof the disgorgement of corporation. The paper focuses especially on self-dealing,breach of competition prohibition obligations, short-swing trading and other cases, incontrast to the legislative requirements in various countries and regions, including thelegal reasons on the company law and the cases on the securities law. The fifth sectionanalyzes some other problems about the company disgorgement, such as the deadlineof the company disgorgement, the exercise of the procedures of the companydisgorgement, the concurrence and handling of the company disgorgement and theright of claim for damages.