What is a Director's Conflicting Interest Transaction?

This lesson reviews the definition of "director's conflicting interest transaction" in Subchapter F of chapter 8 of the Revised Model Business Corporation Act. It focuses on the definition and does not discuss judicial review of director's conflicting interest transactions under Subchapter F. That is dealt with in a companion lesson, Judicial Review of Director's Conflicting Interest Transactions under the Model Business Corporation Act.

This lesson begins with an introduction to the general structure of the statutory definition, then discusses the individual elements of the definition in greater detail. It discusses the persons whose interest in a transaction can create a conflicting interest for a director, the types of interests that are covered, and the requirement that the director know of the interest. The lesson also discusses the requirement that the transaction involve the corporation, its subsidiary, or a controlled company.