{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/13.1-871.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/13.1-871.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/13.1-871.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/13.1-871.html"}],"law_id":73903,"edition_id":1,"section_id":73903,"structure_id":13531,"section_number":"13.1-871","catch_line":"Director conflict of interests","history":"Code 1950, \u00a7 13.1-223; 1956, c. 428; 1985, c. 522; 2007, c. 925.","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 him 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 members 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 votes entitled to be counted under this subsection. The votes controlled by a director who is not disinterested may not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interests transaction under subdivision A 2. The director’s votes, however, may be counted in determining whether the transaction is approved under other sections of this Act. A majority of the members, 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":265778,"text":"A conflict of interests transaction is a transaction with the corporation in which a director of the corporation has an interest that precludes him 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":265779,"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":265780,"text":"The material facts of the transaction and the director’s interest were disclosed to the members 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":265781,"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":265782,"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":265783,"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 votes entitled to be counted under this subsection. The votes controlled by a director who is not disinterested may not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interests transaction under subdivision A 2. The director’s votes, however, may be counted in determining whether the transaction is approved under other sections of this Act. A majority of the members, 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":13531,"edition_id":1,"name":"Directors and Officers","identifier":"8","label":"article","depth":3,"order_by":1,"parent_id":13004,"metadata":{},"date_created":"2026-06-26 03:45:08","date_modified":"2026-06-26 03:45:08","permalink":{"id":148133,"object_type":"structure","relational_id":13531,"identifier":"8","token":"13.1\/10\/8","url":"\/13.1\/10\/8\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13004,"edition_id":1,"name":"Virginia Nonstock Corporation Act","identifier":"10","label":"chapter","depth":2,"order_by":1,"parent_id":12744,"metadata":{},"date_created":"2026-06-26 03:44:07","date_modified":"2026-06-26 03:44:07","permalink":{"id":147501,"object_type":"structure","relational_id":13004,"identifier":"10","token":"13.1\/10","url":"\/13.1\/10\/","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":83970,"structure_id":13531,"section_number":"13.1-853","catch_line":"Requirement for and duties of board of directors","url":"\/13.1-853\/","token":"13.1\/10\/8\/13.1-853","metadata":false},{"id":68503,"structure_id":13531,"section_number":"13.1-854","catch_line":"Qualification of directors","url":"\/13.1-854\/","token":"13.1\/10\/8\/13.1-854","metadata":false},{"id":56717,"structure_id":13531,"section_number":"13.1-855","catch_line":"Number and election of directors","url":"\/13.1-855\/","token":"13.1\/10\/8\/13.1-855","metadata":false},{"id":73756,"structure_id":13531,"section_number":"13.1-856","catch_line":"Election of directors by certain classes of members","url":"\/13.1-856\/","token":"13.1\/10\/8\/13.1-856","metadata":false},{"id":68232,"structure_id":13531,"section_number":"13.1-857","catch_line":"Terms of directors generally","url":"\/13.1-857\/","token":"13.1\/10\/8\/13.1-857","metadata":false},{"id":66939,"structure_id":13531,"section_number":"13.1-858","catch_line":"Staggered terms of directors","url":"\/13.1-858\/","token":"13.1\/10\/8\/13.1-858","metadata":false},{"id":69249,"structure_id":13531,"section_number":"13.1-859","catch_line":"Resignation of directors","url":"\/13.1-859\/","token":"13.1\/10\/8\/13.1-859","metadata":false},{"id":81920,"structure_id":13531,"section_number":"13.1-860","catch_line":"Removal of directors","url":"\/13.1-860\/","token":"13.1\/10\/8\/13.1-860","metadata":false},{"id":72297,"structure_id":13531,"section_number":"13.1-861","catch_line":"Judicial review of elections","url":"\/13.1-861\/","token":"13.1\/10\/8\/13.1-861","metadata":false},{"id":58753,"structure_id":13531,"section_number":"13.1-862","catch_line":"Vacancy on board of directors","url":"\/13.1-862\/","token":"13.1\/10\/8\/13.1-862","metadata":false},{"id":69910,"structure_id":13531,"section_number":"13.1-863","catch_line":"Compensation of directors","url":"\/13.1-863\/","token":"13.1\/10\/8\/13.1-863","metadata":false},{"id":84891,"structure_id":13531,"section_number":"13.1-864","catch_line":"Meetings of the board of directors","url":"\/13.1-864\/","token":"13.1\/10\/8\/13.1-864","metadata":false},{"id":77538,"structure_id":13531,"section_number":"13.1-865","catch_line":"Action without meeting of board of directors","url":"\/13.1-865\/","token":"13.1\/10\/8\/13.1-865","metadata":false},{"id":76527,"structure_id":13531,"section_number":"13.1-866","catch_line":"Notice of board of directors' meetings","url":"\/13.1-866\/","token":"13.1\/10\/8\/13.1-866","metadata":false},{"id":78773,"structure_id":13531,"section_number":"13.1-867","catch_line":"Waiver of notice by director","url":"\/13.1-867\/","token":"13.1\/10\/8\/13.1-867","metadata":false},{"id":55069,"structure_id":13531,"section_number":"13.1-868","catch_line":"Quorum and voting by directors","url":"\/13.1-868\/","token":"13.1\/10\/8\/13.1-868","metadata":false},{"id":85811,"structure_id":13531,"section_number":"13.1-869","catch_line":"Committees","url":"\/13.1-869\/","token":"13.1\/10\/8\/13.1-869","metadata":false},{"id":82285,"structure_id":13531,"section_number":"13.1-870","catch_line":"General standards of conduct for directors","url":"\/13.1-870\/","token":"13.1\/10\/8\/13.1-870","metadata":false},{"id":60905,"structure_id":13531,"section_number":"13.1-870.1","catch_line":"Limitation on liability of officers and directors; 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The record of this law\u2019s original creation isn\u2019t available online. It has been modified 3 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 1956, chapter 428; in 1985, chapter 522; in 2007, chapter 925<\/a>.<\/p>","references":[{"id":65210,"section_number":"13.1-803","catch_line":"Definitions","order_by":null,"url":"\/13.1-803\/"},{"id":54497,"section_number":"13.1-871.1","catch_line":"Business opportunities","order_by":null,"url":"\/13.1-871.1\/"}],"refers_to":false,"permalink":{"id":148215,"object_type":"law","relational_id":73903,"identifier":"13.1-871","token":"13.1\/10\/8\/13.1-871","url":"\/13.1-871\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/13.1-871\/","token":"13.1\/10\/8\/13.1-871","dublin_core":{"Title":"Director conflict of interests","Type":"Text","Format":"text\/html","Identifier":"\u00a7 13.1-871","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 him from being a disinterested director<\/span>. 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<\/span> or a committee of the board of directors<\/span> and the board of directors<\/span> 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 members<\/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<\/span> on the board of directors<\/span>, 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<\/span> 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 votes entitled to be counted under this subsection. The votes controlled by a director who is not disinterested may not be counted in a vote of members<\/span> to determine whether to authorize, approve, or ratify a conflict of interests<\/span> transaction under subdivision A 2. The director’s votes, however, may be counted in determining whether the transaction is approved under other sections of this Act. A majority of the members<\/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 13.1-871)\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 him from\nbeing 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 members entitled to vote and they authorized, approved\n 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\nvotes entitled to be counted under this subsection. The votes controlled by a\ndirector who is not disinterested may not be counted in a vote of members to\ndetermine whether to authorize, approve, or ratify a conflict of interests\ntransaction under subdivision A 2. The director’s votes, however, may be\ncounted in determining whether the transaction is approved under other sections\nof this Act. A majority of the members, whether or not present, that are\nentitled to be counted in a vote on the transaction under this subsection\nconstitutes a quorum for the purpose of taking action under this section.\n\nHISTORY: Code 1950, \u00a7 13.1-223; 1956, c. 428; 1985, c. 522; 2007, c. 925.","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}}