{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/13.1-691.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/13.1-691.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/13.1-691.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/13.1-691.html"}],"law_id":56699,"edition_id":1,"section_id":56699,"structure_id":14362,"section_number":"13.1-691","catch_line":"Director conflict of interests","history":"Code 1950, \u00a7 13.1-39.1; 1975, c. 500; 1980, c. 341; 1985, c. 522; 2005, c. 765.","full_text":"A\n\nA conflict of interests transaction is a transaction with the corporation in which a director of the corporation has an interest that precludes the director from being a disinterested director. A conflict of interests transaction is not voidable by the corporation solely because of the director’s interest in the transaction if any one of the following is true:1\n\nThe 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 of directors and the board of directors or committee authorized, approved, or ratified the transaction;2\n\nThe material facts of the transaction and the director’s interest were disclosed to the shareholders entitled to vote and they authorized, approved, or ratified the transaction; or3\n\nThe transaction was fair to the corporation.B\n\nFor purposes of subdivision A 1, a conflict of interests transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the disinterested directors on the board of directors, or on the committee. A transaction shall not be authorized, approved, or ratified under this section by a single director. If a majority of the disinterested directors 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 who is not disinterested does not affect the validity of any action taken under subdivision A 1 if the transaction is otherwise authorized, approved or ratified as provided in that subsection.C\n\nFor purposes of subdivision A 2, a conflict of interests transaction is authorized, approved, or ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who is not disinterested may not be counted in a vote of shareholders to determine whether to authorize, approve, or ratify a conflict of interests transaction under subdivision A 2. The vote of those shares, however, shall be counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares, whether or not present, that are 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.","order_by":null,"text":{"0":{"id":207479,"text":"A conflict of interests transaction is a transaction with the corporation in which a director of the corporation has an interest that precludes the director from being a disinterested director. A conflict of interests transaction is not voidable by the corporation solely because of the director’s interest in the transaction if any one of the following is true:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":207480,"text":"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 of directors and the board of directors or committee authorized, approved, or ratified the transaction;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":207481,"text":"The material facts of the transaction and the director’s interest were disclosed to the shareholders entitled to vote and they authorized, approved, or ratified the transaction; or","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":207482,"text":"The transaction was fair to the corporation.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"B"},"4":{"id":207483,"text":"For purposes of subdivision A 1, a conflict of interests transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the disinterested directors on the board of directors, or on the committee. A transaction shall not be authorized, approved, or ratified under this section by a single director. If a majority of the disinterested directors 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 who is not disinterested does not affect the validity of any action taken under subdivision A 1 if the transaction is otherwise authorized, approved or ratified as provided in that subsection.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A3","next_prefix":"C"},"5":{"id":207484,"text":"For purposes of subdivision A 2, a conflict of interests transaction is authorized, approved, or ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who is not disinterested may not be counted in a vote of shareholders to determine whether to authorize, approve, or ratify a conflict of interests transaction under subdivision A 2. The vote of those shares, however, shall be counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares, whether or not present, that are 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.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B"}},"ancestry":[{"id":14362,"edition_id":1,"name":"Directors and Officers","identifier":"9","label":"article","depth":3,"order_by":1,"parent_id":12983,"metadata":{},"date_created":"2026-06-26 03:47:53","date_modified":"2026-06-26 03:47:53","permalink":{"id":151169,"object_type":"structure","relational_id":14362,"identifier":"9","token":"13.1\/9\/9","url":"\/13.1\/9\/9\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12983,"edition_id":1,"name":"Virginia Stock Corporation Act","identifier":"9","label":"chapter","depth":2,"order_by":1,"parent_id":12744,"metadata":{},"date_created":"2026-06-26 03:44:06","date_modified":"2026-06-26 03:44:06","permalink":{"id":150163,"object_type":"structure","relational_id":12983,"identifier":"9","token":"13.1\/9","url":"\/13.1\/9\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12744,"edition_id":1,"name":"Corporations","identifier":"13.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":147493,"object_type":"structure","relational_id":12744,"identifier":"13.1","token":"13.1","url":"\/13.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":79378,"structure_id":14362,"section_number":"13.1-673","catch_line":"Requirement for and duties of board of directors","url":"\/13.1-673\/","token":"13.1\/9\/9\/13.1-673","metadata":false},{"id":72148,"structure_id":14362,"section_number":"13.1-674","catch_line":"Qualifications for directors or for nominees for 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directors","url":"\/13.1-688\/","token":"13.1\/9\/9\/13.1-688","metadata":false},{"id":80537,"structure_id":14362,"section_number":"13.1-689","catch_line":"Committees","url":"\/13.1-689\/","token":"13.1\/9\/9\/13.1-689","metadata":false},{"id":72306,"structure_id":14362,"section_number":"13.1-690","catch_line":"General standards of conduct for director","url":"\/13.1-690\/","token":"13.1\/9\/9\/13.1-690","metadata":false},{"id":66497,"structure_id":14362,"section_number":"13.1-690.1","catch_line":"Director of open-end management investment company deemed disinterested","url":"\/13.1-690.1\/","token":"13.1\/9\/9\/13.1-690.1","metadata":false},{"id":56699,"structure_id":14362,"section_number":"13.1-691","catch_line":"Director conflict of interests","url":"\/13.1-691\/","token":"13.1\/9\/9\/13.1-691","metadata":false},{"id":72680,"structure_id":14362,"section_number":"13.1-691.1","catch_line":"Business opportunities","url":"\/13.1-691.1\/","token":"13.1\/9\/9\/13.1-691.1","metadata":false},{"id":73395,"structure_id":14362,"section_number":"13.1-692","catch_line":"Liability for unlawful distributions","url":"\/13.1-692\/","token":"13.1\/9\/9\/13.1-692","metadata":false},{"id":72604,"structure_id":14362,"section_number":"13.1-692.1","catch_line":"Limitation on liability of officers and directors; exception","url":"\/13.1-692.1\/","token":"13.1\/9\/9\/13.1-692.1","metadata":false},{"id":75621,"structure_id":14362,"section_number":"13.1-693","catch_line":"Required officers","url":"\/13.1-693\/","token":"13.1\/9\/9\/13.1-693","metadata":false},{"id":85692,"structure_id":14362,"section_number":"13.1-694","catch_line":"Duties of officers","url":"\/13.1-694\/","token":"13.1\/9\/9\/13.1-694","metadata":false},{"id":61022,"structure_id":14362,"section_number":"13.1-695","catch_line":"Resignation and removal of officers","url":"\/13.1-695\/","token":"13.1\/9\/9\/13.1-695","metadata":false}],"previous_section":{"id":66497,"structure_id":14362,"section_number":"13.1-690.1","catch_line":"Director of open-end management investment company deemed disinterested","url":"\/13.1-690.1\/","token":"13.1\/9\/9\/13.1-690.1","metadata":false},"next_section":{"id":72680,"structure_id":14362,"section_number":"13.1-691.1","catch_line":"Business opportunities","url":"\/13.1-691.1\/","token":"13.1\/9\/9\/13.1-691.1","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/13.1-691\/","history_text":"

The record of this law\u2019s original creation isn\u2019t available online. It has been modified 4 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1975, chapter 500; in 1980, chapter 341; in 1985, chapter 522; in 2005, chapter 765<\/a>.<\/p>","references":[{"id":83518,"section_number":"13.1-603","catch_line":"Definitions","order_by":null,"url":"\/13.1-603\/"},{"id":66733,"section_number":"13.1-619","catch_line":"Articles of incorporation","order_by":null,"url":"\/13.1-619\/"},{"id":72680,"section_number":"13.1-691.1","catch_line":"Business opportunities","order_by":null,"url":"\/13.1-691.1\/"},{"id":77282,"section_number":"13.1-729","catch_line":"Definitions","order_by":null,"url":"\/13.1-729\/"},{"id":78022,"section_number":"13.1-741.1","catch_line":"Limitations on other remedies for fundamental transactions","order_by":null,"url":"\/13.1-741.1\/"}],"refers_to":false,"permalink":{"id":151251,"object_type":"law","relational_id":56699,"identifier":"13.1-691","token":"13.1\/9\/9\/13.1-691","url":"\/13.1-691\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/13.1-691\/","token":"13.1\/9\/9\/13.1-691","dublin_core":{"Title":"Director conflict of interests","Type":"Text","Format":"text\/html","Identifier":"\u00a7 13.1-691","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> A conflict of interests<\/span> transaction is a transaction with the corporation<\/span> in which a director of the corporation<\/span> has an interest<\/span> that precludes the director from being a disinterested director. A conflict of interests<\/span> transaction is not voidable by the corporation<\/span> solely because of the director’s interest<\/span> in the transaction if any one of the following is true: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The material<\/span> facts<\/span> of the transaction and the director’s interest<\/span> were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved, or ratified the transaction; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The material<\/span> facts<\/span> of the transaction and the director’s interest<\/span> were disclosed to the shareholders<\/span> entitled to vote and they authorized, approved, or ratified the transaction; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The transaction was fair to the corporation<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> For purposes of subdivision A 1, a conflict of interests<\/span> transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the disinterested directors on the board of directors, or on the committee. A transaction shall not be authorized, approved, or ratified under this section by a single director. If a majority of the disinterested directors 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 who is not disinterested does not affect the validity of any action taken under subdivision A 1 if the transaction is otherwise authorized, approved or ratified as provided in that subsection. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> For purposes of subdivision A 2, a conflict of interests<\/span> transaction is authorized, approved, or ratified if it receives the vote of a majority of the shares<\/span> entitled to be counted under this subsection. Shares<\/span> owned by or voted under the control of a director who is not disinterested may not be counted in a vote of shareholders<\/span> to determine whether to authorize, approve, or ratify a conflict of interests<\/span> transaction under subdivision A 2. The vote of those shares<\/span>, however, shall be counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares<\/span>, whether or not present, that are 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. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nDIRECTOR CONFLICT OF INTERESTS (\u00a7 13.1-691)\n\nA. A conflict of interests transaction is a transaction with the corporation in\nwhich a director of the corporation has an interest that precludes the director\nfrom being a disinterested director. A conflict of interests transaction is not\nvoidable by the corporation solely because of the director’s interest in\nthe transaction if any one of the following is true:\n\n 1. The material facts of the transaction and the director’s interest\n were disclosed or known to the board of directors or a committee of the board\n of directors and the board of directors or committee authorized, approved, or\n ratified the transaction;\n\n 2. The material facts of the transaction and the director’s interest\n were disclosed to the shareholders entitled to vote and they authorized,\n approved, or ratified the transaction; or\n\n 3. The transaction was fair to the corporation.\n\nB. For purposes of subdivision A 1, a conflict of interests transaction is\nauthorized, approved, or ratified if it receives the affirmative vote of a\nmajority of the disinterested directors on the board of directors, or on the\ncommittee. A transaction shall not be authorized, approved, or ratified under\nthis section by a single director. If a majority of the disinterested directors\nvote to authorize, approve or ratify the transaction, a quorum is present for\nthe purpose of taking action under this section. The presence of, or a vote cast\nby, a director who is not disinterested does not affect the validity of any\naction taken under subdivision A 1 if the transaction is otherwise authorized,\napproved or ratified as provided in that subsection.\n\nC. For purposes of subdivision A 2, a conflict of interests transaction is\nauthorized, approved, or ratified if it receives the vote of a majority of the\nshares entitled to be counted under this subsection. Shares owned by or voted\nunder the control of a director who is not disinterested may not be counted in a\nvote of shareholders to determine whether to authorize, approve, or ratify a\nconflict of interests transaction under subdivision A 2. The vote of those\nshares, however, shall be counted in determining whether the transaction is\napproved under other sections of this chapter. A majority of the shares, whether\nor not present, that are entitled to be counted in a vote on the transaction\nunder this subsection constitutes a quorum for the purpose of taking action\nunder this section.\n\nHISTORY: Code 1950, \u00a7 13.1-39.1; 1975, c. 500; 1980, c. 341; 1985, c. 522;\n2005, c. 765.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}