Under what conditions may a director who acquired a corporate business opportunity avoid having to refund the profits?
A director who acquires a business opportunity that rightfully belonged to the corporation, thereby obtaining profits to the prejudice of the corporation, must generally account for and refund all such profits (SEC. 33, Revised Corporation Code of the Philippines). This liability applies even if the director used their own personal funds and resources in the venture, due to their fiduciary duty. However, the director may avoid this liability if the act has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding capital stock. This ratification, though, does not extinguish the breach of loyalty but excuses the director from refunding the profits.
02 November 2025
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