Legal Definitions - firm-opportunity doctrine

The firm-opportunity doctrine is a rule that applies to corporations and partnerships. It states that directors, officers, and employees of a corporation or partnership cannot use information they gain from their position to take advantage of any business opportunities that belong to the corporation or partnership.

For example, if a corporation is considering investing in a new technology, the directors cannot use that information to start their own company based on that technology. This would be a violation of the firm-opportunity doctrine.

In a partnership, the same principle applies and is called the firm-opportunity doctrine. For instance, if a partnership is considering expanding into a new market, one partner cannot use that information to start their own business in that market.