A director, officer or controlling member may not appropriate for themselves a business opportunity that belongs to the company. The remedy is usually a constructive trust over the opportunity or its profits.

Whether an opportunity belongs to the company is assessed on several factors: whether the company was financially able to take it, whether it is in the company’s line of business, whether the company had an interest or expectancy in it, and whether taking it would place the fiduciary in a position inconsistent with their duties.

How the opportunity came to them matters. One learned in a corporate capacity is almost always the company’s; one learned purely personally, outside the company’s line, may not be.

Presentation and refusal. The safe course is to present the opportunity formally to the disinterested directors or members, with full disclosure, and document the refusal. That converts a fiduciary problem into a recorded business decision.

Waiver by agreement. Many statutes now permit a corporation or LLC to renounce classes of opportunities in its charter or operating agreement. Private equity and venture investors with multiple portfolio companies insist on these, and their scope should be read carefully by the other side.

In closely held companies the doctrine bites hardest, because owners are also the operators and the opportunity is often the reason for the falling out.