Corporate opportunity
The corporate opportunity doctrine is the legal principle providing that directors, officers, and controlling shareholders of a corporation must not take for themselves any business opportunity that could benefit the corporation.[1] The corporate opportunity doctrine is one application of the fiduciary duty of loyalty.[2]
Application
The corporate opportunity doctrine does not apply to all fiduciaries of a corporation; rather, it is limited to directors, officers, and controlling shareholders.
Elements
A business opportunity is a corporate opportunity if the corporation is financially able to undertake the opportunity, the opportunity is within the corporation's line of business, and the corporation has an interest or expectancy in the opportunity.
See also
- Fiduciary duty
- Duty of loyalty
- Self-dealing
References
- ^ 18B Am. Jur. 2d Corporations § 1536 (1964).
- ^ Id.
- ^ Id.
- ^ Id. § 1538.
- ^ Id. § 1539.
- ^ Id. § 1538, 1540.
- ^ Id. § 1536.
- ^ Martha Stewart Living Omnimedia, Inc. v. Stewart, 833 A.2d 961, 972-73 (Del. Ch. 2003).
- ^ In re eBay, Inc. S'holders Litig., 2004 Del. Ch. LEXIS 4 (2004).
- ^ Id. at *12.
- ^ 18B Am. Jur. 2d Corporations § 1542 (1964).