On The Usurpation Of Corporate Opportunity, And Its Legal Control

The revamped Company Law of People's Republic of China 2005 introduced the concept of corporate opportunity appropriation regarding the duty of loyalty of directors and other officials. Sourcing from other countries' legislative experiences, this concept enhanced and intensified the duty of loyalty rule. However, an overview of the relevant provisions reveals that great attention was paid to the corporate opportunity principle, while little was to the systemization and specification of the prevention and regulation mechanism with respect to the corporate opportunity appropriation. This imbalance demonstrates the loophole and impracticality of this legislation.This article is endeavored to look into the corporate opportunity appropriation theory, formulize a scheme of prevention and regulation responding to this phenomenon, and put forward suggestions to ameliorate relevant clauses under the company law.This article has three chapters:Chapter One reviews the corporate opportunity theory in the common law tradition and its counterpart in the civil law tradition, and comments on the transplant and design of this theory and institution in the Company Law of the PRC.Chapter Two starts from the attribution right to fabricate the prevention and regulation mechanism for the corporate opportunity appropriation from the perspectives of the company per se, the internal and the outside, and then analyze the arguments for a multiple prevention and regulation system, and explain it on the strength of the theory of deterrence.Chapter Three analyzes the nature of the corporate opportunity appropriation clauses, delve further into the proposed prevention and regulation mechanism, and make suggestions to the amelioration of this legal institution.Conclusion is thereby made that the prevention and regulation mechanism is an integral part of this legal institution, the systemization of which is an indispensable feature of this theory.