Corporate-Opportunity Doctrine

Corporate-Opportunity Doctrine

Definition

Provides that a corporate director generally must not take personal advantage of a business opportunity if (1) the director should reasonably believe that the other party meant for the opportunity to be offered to the corporation; (2) the director became aware of the opportunity through confidential corporate information, by using corporate property, or while performing his or her functions as director, and the director should reasonably expect that the corporation would be interested in the opportunity; and (3) the opportunity involves a line of business in which the corporation is currently engaged or expects to engage in the future. However, the director may take personal advantage of the opportunity if the director gives the corporation the first chance to take advantage of the opportunity and the corporation rejects it.

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