A law and economics analysis of corporate opportunities doctrines from a comparative perspective

Sammanfattning: Business opportunities are a chance for a company to grow its activity and to further the aggregate welfare of the society as a whole. Corporate opportunities rules and their functional equivalents should enable companies to develop their business activities when directors discover those business opportunities. Companies need to be certain that they can legally appropriate those business opportunities. A company should have this ability when it is the best potential exploiter of the opportunity at issue, which is likely when the opportunity is a chance to expand the company's line of business or to pursue vertical integration. In fact, a company's appropriation of new business opportunities justifies a company's sunk costs that stem from its specific investments. Hence, the tests adopted for identifying corporate opportunities in US (Delaware), German (line of business test), UK, French, Spanish and Italian corporate laws (interest test) reflect the need to further efficiency by way of diminishing hold-up costs. Remedies against misappropriations of corporate opportunities by directors should both pursue maximum disclosure of new corporate opportunities by directors and preserve the possibility of alternative allocations of a corporate opportunity, when a company's director can exploit the opportunity more efficiently than the company. Such an alternative allocation may occur through negotiation or through efficient breach of duty. It is suggested that a differential remedial system (higher sanctions for breach of duty following non-disclosure) would maximize both disclosure and efficient allocation. This approach is closer to the one that exists in Anglo-American law than to the one adopted in most civil law jurisdictions. The present differences in various corporate laws may be connected to the existence of institutional complementarities, which should be taken into account in future reforms.