Virginia Code 13.1-691.1: Business opportunities.
A. A director’s taking advantage, directly or indirectly, of a business opportunity may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if before becoming legally obligated respecting the opportunity the director brings it to the attention of the corporation and:
Terms Used In Virginia Code 13.1-691.1
- 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.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Interest: means either or both of the following rights under the organic law governing an unincorporated entity:
1. See Virginia Code 13.1-603
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Virginia Code 13.1-603
1. Directors’ action disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in subdivision A 1 of § 13.1-691, as if the decision being made concerned a director’s conflict of interests transaction; or
2. Shareholders’ action disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in subdivision A 2 of § 13.1-691, as if the decision being made concerned a director’s conflict of interests transaction.
B. In any proceeding seeking equitable relief or other remedies, based upon an alleged improper taking advantage of a business opportunity by a director, the fact that the director did not employ one of the procedures described in subsection A before taking advantage of the opportunity shall not create an inference that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director breached a duty to the corporation in the circumstances.
2005, c. 765.