Research On Corporate Opportunity Doctrine

The separation of ownership and management creates one of the company's biggest problems-agency costs.where after,fiduciary duty is generated.The corporate opportunity doctrine is a manifestation of the fiduciary duty,It requires that the fiduciary of the corporate can not usurp,Otherwise the company can exercise the disgorgement right.The main research methods of this paper are case study method,the empirical analysis method,the theoretical analysis method,the comparative research method,the value analysis method and the legal interpretation method.The significance of the topic is to clarify the application issues of COD,the COD of departure executive,the discussion of corporate opportunity waiver and the importance of corporate governance incentives.The structures of this paper are as follows:The first chapter introduces the emergence and development of COD briefly,which mainly includes interest or expectancy test,line of business test,fairness test and other recognition test,and introduces the transplantation of our country.In the second chapter,I analyze the theoretical defects and application of incumbent executive's COD in China.For theoretical issues:On the matter of subject application,the author believes that the external directors may not involve the usurpation of corporate opportunities,So the best way are share rules,Submit business opportunities to the company;For some subjects not being included,the author believes they should be extended to,for instance,controlling shareholders and others.In terms of recognition standards,the use of position facilitation may lead to plight that every business opportunity belong to corporate but not a personal one.For the application of the corporate opportunity,The main points of view are as follows:recognition problem mainly in two steps,the first step is whether opportunity belongs to the company.If it is,the second step is whether the opportunity disclose to the company and whether the company refused;For disgorgement right,the author believes that there are issues of inadequate relief and over relief and clarify the burden of proof is indeed;for one-man company,the author believes that,in general,the individual does not have duty of loyalty to the company,but when the company is insolvent the individual have such duty to creditors.In the third chapter,the author analyzes the duty of executive outside of the employment,Mainly including two cases:case 1 is one obtain opportunity in the employment period and use it outside period,case 2 is one prevent the corporate opportunity from becoming real interests after leaving position,The author argues that turning to methods of corporate law and explaining expanded fiduciary duty,terminated executive shall not use the company's resources otherwise it may be considered a usurpation of corporate opportunity.In the fourth chapter,the author study corporate opportunity waiver(COW)and introduce several states in the USA COW assessment as the representative of Delaware in the lead,which does not generally increase the agency cost and lead to moral hazard,the author believes the prior distribution of business opportunities are of practical significance.In the fifth chapter,the author argues that the traditional contract model is suitable for information symmetry,and when the information turns to private,the optimal contract will change greatly,so we can customize COW and restrain the trust parties through enforcement contract mechanisms,when this mechanism is facing dilemma,the incentive measures are also an option,the author does not exclude important role of law as ex post relief but emphasize the company's own choice.Finally,the author make summary statements and summarize the full text.