Company Law
Company Law
AC208 Company Law Assignment
Wong Kai Jun
Tutorial Group
Tutor
Assoc/P Gan Lay Hong, Pauline
Company Law Assignment
The law requires that directors not take corporate opportunities without the permission of the company. The first part of the essay will touch on the ambit of this duty, and then I will go on to discuss whether the law imposes too harsh a burden on directors in this regard.
First of all, “corporate opportunity” refers to a business opportunity which the company is considering or one which the company might be reasonably expected to be interested, given its current line of business.
An example of a director breaching her duty by taking a corporate opportunity is given in the Compaq case. Compaq had arranged to engage Personal Automation Mart for its “GEMS” project. However, an internal dispute arose between Tan – Compaq’s managing director – and the majority shareholder. This dispute prompted Tan to resign, and she brought along some of the Compaq’s employees who assisted in the GEMS project to set up another company Newstead. Personal Automation Mart later transferred the project to Newstead. The court held that Tan breached her fiduciary duties by setting up