Explaining the Concept of Corporate Opportunities and Strategy to Prevent Them from Appropriating by Directors (A Comparative Study of the Legal System of the United States, England and Iran)

Document Type : Research Paper

Authors

1 Ph.D. Candidate in Private Law, Islamic Azad University, North Tehran Branch, Iran

2 Assistant Professor, Islamic Azad University, North Tehran Branch, Iran

3 Assistant Professor of Islamic Azad University, Tehran Branch, Center, Iran

10.22034/law.2024.57443.3294

Abstract

The prompt cycle of information always puts companies in business situations that profitability in them strongly tempts the directors to exploit them for their own private interests, which is naturally in conflict with the interests of the company. The “Doctrine of Corporate Opportunities”, as a part of the more comprehensive concept of “fiduciary duty” with a long historical history, is one of the exclusive tools that by establishing regulations and principles such as the need to disclose to prevent the acquisition of business opportunities, to confront the risk of their deviation, and finally regulate the process of correct allocation, the roots of which can be seen in Iran’s legal system. There are several tests to identify corporate opportunity, which their review shows that the “ownership-oriented” approach to opportunities in the United States greatly empowers directors in developing economic activities while in UK the “behavior-oriented” approach of the Companies Act 2006 has prioritized the requirement to have loyalty. In Iran’s legal system Since the corporate opportunity has the characteristics required by law, including rational benefit, it should be accepted in the new list of valuable assets of companies and as an intangible asset

Keywords

Main Subjects

References

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Jurisprudence and Islamic Law
Volume 15, Issue 35
June 2024
Pages 195-232

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