Legal Regulation Of Shareholders’ Infringement On Corporate Opportunities

The rule of forbidden usurping company opportunities was introduced into the company law amended in 2005.However,the legal provision is too superficial to perform the profound connotation on corporate opportunities of Chinese and foreign academic research achievements.In reality,shareholders usurp opportunities in a diversed and secret way and the behavior has somehow the particularity so there must be legal regulation against it.The commercial law advocates the principle of autonomy of will.Requiring the shareholders to undertake more obligations,thus limiting the liberty of shareholders to manipulate the company,but it does not confront with the commercial law’s value pursuit.The fiduciary duties on shareholders are not against all selfish conducts of shareholders,but only those transactions of transferring the Interests of the company、all shareholders or even the society to their own through the abuse of shareholders’ rights.After all,limiting abuse of powers will promote the efficiency principle in the end.The article is taking shareholders as study objects,using methods of comparative and empirical research,to explain the concept of company law and the reality of shareholders’ infringement on the interests of the company and demonstrate the rationality of the fiduciary duties on shareholder.This article is divided into three chapters.the first chapter raises the questionwhether the shareholders can apply corporate opportunity doctrine through a case.combining with the theory of foreign laws and some viewpoints of domestic scholars,we sum up some defects of our existing company law including the lack of subject of the duty and further lack of legislation to shareholder’s obligations.The second chapter discusses the legal basis of prohibiting shareholders from infringing corporate opportunities.In the view of the traditional theory of corporate opportunity doctrine,only company’s directors and executives have the responsibility of fiduciary duty.However,with the development of corporate governance,expanding the scope of the obligations to shareholders and putting forward shareholders’ duty of loyalty accords with the legal basis.First of all,company is a juridical person and has its independent interest demands,from the relationship between a company and its shareholders,and this is the biggest characteristic and superiority of modern company system.Meanwhile,a company has a certain sociality needing to be responsible for the employees,creditors,even the whole society.A company takes the social responsibility and is not the shareholders’ private property.It is not allowed to infringe the interests of the company;secondly,the mutual trust among shareholders is the principle of good faith derived from the civil law and the fiduciary duty of the trustee of the company’s property in the company law;finally,from the semantic interpretation,our company law has the clause it shall be forbidden to abuse the rights of shareholders in the twentieth article.The new company law judicial explanation four also proves the existence of shareholders being against the interests of the company in reality.The third chapter discusses the applicable conditions of prohibiting shareholders from infringing corporate opportunities.As far as the subject is concerned,the scope of shareholders is divided into controlling shareholders and non-controlling shareholders.Although non-controlling shareholders usually are vulnerable in corporate governance,they still need take the fiduciary duty to other shareholders.Controlling shareholders have double obligations because of their shareholder status and controlling position.In the last section,we discuss the exemptions of allowing shareholders to use the opportunity of the company.In order to avoid the waste ofshareholders to use the opportunity of the company.In order to avoid the waste of corporate opportunities,the commercial law encourages transactions and allows the shareholders to make reasonable utilization of the corporate ’s opportunities ina certain condition.