The Dilemma and Improvement of the Statutory Non-competition Prohibition System in Company Law

Abstract

As a crucial legal institution for protecting corporate trade secrets and maintaining fair competition order, the non-competition prohibition system has undergone new regulatory adjustments following the 2023 revision of the Company Law. However, issues concerning the scope of obligated subjects, standards for identifying competitive acts, and the allocation of remedial measures remain unresolved, necessitating a systematic examination from both institutional construction and judicial application perspectives. This paper focuses on the subject, conduct, and liability of statutory non-competition obligations, comprehensively employing normative analysis, case analysis, and literature review methods. The study reveals that the current system faces prominent problems: the statutory scope of subjects is too narrow and misaligned with practical needs; divergent standards exist in identifying "operating on one's own account or for the account of others" and "similar business"; and there are obstacles in exercising the disgorgement right alongside insufficient coordination between civil and criminal remedies. Accordingly, this paper proposes expanding the regulated subjects to include controlling shareholders and actual controllers who substantively perform functions, as well as shareholders with access to trade secrets; unifying the identification standards based on the Interest-Attribution Doctrine and substantive competitive relationships; and constructing a diversified remedial system integrating the disgorgement right, the right to claim cessation of infringement, and criminal liability pursuit.