Missouri Laws 355.416 – Director’s conflict of interest
1. A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a material interest. A conflict of interest transaction is not voidable or the basis for imposing liability on a noncompensated director if the transaction was not unfair to the corporation at the time it was entered into or is approved as provided in subsection 2 or 3 of this section.
2. A transaction in which a noncompensated director of a public benefit or religious corporation has a conflict of interest may be approved:
Terms Used In Missouri Laws 355.416
- articles: amended and restated articles of incorporation and articles of merger. See Missouri Laws 355.066
- board of directors: the board of directors except that no person or group of persons is the board of directors because of powers delegated to that person or group pursuant to section 355. See Missouri Laws 355.066
- Bylaws: the code or codes of rules, other than the articles, adopted pursuant to this chapter for the regulation or management of the affairs of the corporation, irrespective of the name or names by which such rules are designated. See Missouri Laws 355.066
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: public benefit and mutual benefit corporations. See Missouri Laws 355.066
- Directors: individuals, designated in the articles or bylaws or elected by the incorporator or incorporators, and their successors and individuals elected or appointed by any other name or title to act as members of the board. See Missouri Laws 355.066
- Mutual benefit corporation: a domestic corporation which is formed as a mutual benefit corporation pursuant to sections 355. See Missouri Laws 355.066
- Quorum: The number of legislators that must be present to do business.
- Vote: includes authorization by written ballot and written consent. See Missouri Laws 355.066
- Voting power: the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. See Missouri Laws 355.066
(1) In advance by the vote of the board of directors or a committee of the board if:
(a) The material facts of the transaction and the director’s interest are disclosed or known to the board or committee of the board; and
(b) The directors approving the transaction in good faith reasonably believe that the transaction is not unfair to the corporation; or
(2) Before or after it is consummated by obtaining approval of the:
(a) Attorney general; or
(b) The circuit court in an action in which the attorney general is joined as a party.
3. A transaction in which a director of a mutual benefit corporation has a conflict of interest may be approved if:
(1) The material facts of the transaction and the director’s interest were disclosed or known to the board of directors or a committee of the board and the board or committee of the board authorized, approved, or ratified the transaction; or
(2) The material facts of the transaction and the director’s interest were disclosed or known to the members and they authorized, approved, or ratified the transaction.
4. For purposes of subsections 2 and 3 of this section, a conflict of interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the board or on the committee, who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors on the board who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a material interest in the transaction does not affect the validity of any action taken under subdivision (1) of subsection 2 of this section or subdivision (1) of subsection 3 of this section if the transaction is otherwise approved as provided in subsection 2 of this section or subsection 3 of this section.
5. For purposes of subdivision (2) of subsection 3 of this section, a conflict of interest transaction is authorized, approved or ratified by the members if it receives a majority of the votes entitled to be counted under this subsection. Votes cast by a director who has a material interest in the transaction may not be counted in a vote of members to determine whether to authorize, approve or ratify a conflict of interest transaction under subdivision (2) of subsection 3 of this section. The vote of these members, however, is counted in determining whether the transaction is approved under other sections of this chapter. A majority of the voting power, whether or not present, that is entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.
6. The articles, bylaws, or a resolution of the board may impose additional requirements on conflict of interest transactions.