Subdivision 1. Conflict; procedure when conflict arises. (a) A contract or other transaction between a corporation and: (1) its director or a member of the family of its director; (2) a director of a related organization, or a member of the family of a director of a related organization; or (3) an organization in or of which the corporation's director, or a member of the family of its director, is a director, officer, or legal representative or has a material financial interest; is not void or voidable because the director or the other individual or organization are parties or because the director is present at the meeting of the members or the board or a committee at which the contract or transaction is authorized, approved, or ratified, if a requirement of paragraph (b) is satisfied.
(b) A contract or transaction described in paragraph (a) is not void or voidable if:
(1) the contract or transaction was, and the person asserting the validity of the contract or transaction has the burden of establishing that the contract or transaction was, fair and reasonable as to the corporation when it was authorized, approved, or ratified;
(2) the material facts as to the contract or transaction and as to the director's interest are fully disclosed or known to the members and the contract or transaction is approved in good faith by two-thirds of the members entitled to vote, not counting any vote that the interested director might otherwise have, or the unanimous affirmative vote of all members, whether or not entitled to vote;
(3) the material facts as to the contract or transaction and as to the director's interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the directors or committee members currently holding office, provided that the interested director or directors may not vote and are not considered present for purposes of a quorum. If, as a result, the number of remaining directors is not sufficient to reach a quorum, a quorum for the purpose of considering the contract or transaction is the number of remaining directors or committee members; or
(4) the contract or transaction is a merger or consolidation described in section 317A.601.
Subd. 2. Material financial interest. For purposes of this section:
(1) a director does not have a material financial interest in a resolution fixing the compensation of the director or fixing the compensation of another director as a director, officer, employee, or agent of the corporation, even though the first director is also receiving compensation from the corporation; and
(2) a director has a material financial interest in an organization in which the director, or a member of the family of the director, has a material financial interest.
Subd. 3. Exception. The procedures described under subdivision 1, clauses (1) to (3), are not required if the contract or other transaction is between related organizations.
Subd. 4. Member of the family. For purposes of this section, a member of the family of a director is a spouse, parent, child, spouse of a child, brother, sister, or spouse of a brother or sister.
1989 c 304 s 45; 1992 c 503 s 6-8; 2010 c 250 art 1 s 29; 2011 c 106 s 12
Structure Minnesota Statutes
Chapters 300 - 323A — Business, Social, And Charitable Organizations
Chapter 317A — Nonprofit Corporations
Section 317A.011 — Definitions.
Section 317A.015 — Legal Recognition Of Electronic Records And Signatures.
Section 317A.021 — Application And Election.
Section 317A.022 — Election By Certain Chapter 318 Associations.
Section 317A.031 — Transition; Continuation Of Legal Acts.
Section 317A.041 — Reservation Of Right.
Section 317A.051 — Scope Of Chapter.
Section 317A.061 — Foreign Nonprofit Corporations; Sections Applicable.
Section 317A.105 — Incorporators.
Section 317A.113 — Private Foundations; Provisions Considered Contained In Articles.
Section 317A.115 — Corporate Name.
Section 317A.117 — Reserved Name.
Section 317A.121 — Registered Office; Registered Agent.
Section 317A.131 — Amendment Of Articles.
Section 317A.133 — Procedure For Amendment Of Articles.
Section 317A.139 — Articles Of Amendment.
Section 317A.141 — Effect Of Amendment.
Section 317A.151 — Filing; Effective Date Of Articles.
Section 317A.155 — Presumption; Certificate Of Incorporation.
Section 317A.163 — Corporate Seal.
Section 317A.165 — Effect Of Lack Of Power; Ultra Vires.
Section 317A.171 — Organization.
Section 317A.205 — Qualifications; Election.
Section 317A.209 — Expiration Of Term; Acts Not Void Or Voidable.
Section 317A.211 — Compensation.
Section 317A.213 — Classification Of Directors.
Section 317A.215 — Cumulative Voting For Directors.
Section 317A.221 — Resignation.
Section 317A.223 — Removal Of Directors.
Section 317A.225 — Removal Of Appointed Directors.
Section 317A.231 — Board Meetings.
Section 317A.237 — Act Of The Board.
Section 317A.239 — Action Without Meeting.
Section 317A.241 — Committees.
Section 317A.251 — Standard Of Conduct.
Section 317A.255 — Director Conflicts Of Interest.
Section 317A.257 — Unpaid Directors; Liability For Damages.
Section 317A.301 — Officers Required.
Section 317A.305 — Duties Of Required Officers.
Section 317A.311 — Other Officers.
Section 317A.315 — Multiple Offices.
Section 317A.321 — Officers Considered Elected.
Section 317A.331 — Contract Rights.
Section 317A.341 — Resignation; Removal; Vacancies.
Section 317A.351 — Delegation.
Section 317A.361 — Standard Of Conduct.
Section 317A.403 — Membership Certificates.
Section 317A.405 — Transfer Of Membership.
Section 317A.407 — Liability Of Members.
Section 317A.409 — Resignation.
Section 317A.411 — Termination.
Section 317A.413 — Purchase Of Memberships.
Section 317A.431 — Annual Meetings Of Members With Voting Rights.
Section 317A.433 — Special Meetings Of Members With Voting Rights.
Section 317A.434 — Court-ordered Meeting Of Members With Voting Rights.
Section 317A.435 — Notice Requirements.
Section 317A.437 — Record Date; Determining Members Entitled To Notice And Vote.
Section 317A.439 — Members' List For Meeting.
Section 317A.441 — Right To Vote.
Section 317A.443 — Act Of The Members.
Section 317A.445 — Unanimous Action Without A Meeting.
Section 317A.447 — Action By Ballot.
Section 317A.450 — Remote Communications For Member Meetings.
Section 317A.455 — Corporation's Acceptance Of Member Act.
Section 317A.457 — Voting Agreements.
Section 317A.461 — Books And Records; Financial Statement.
Section 317A.467 — Equitable Remedies.
Section 317A.501 — Loans; Guarantees; Suretyship.
Section 317A.521 — Indemnification.
Section 317A.601 — Merger, Consolidation, Or Transfer.
Section 317A.611 — Plan Of Merger Or Consolidation.
Section 317A.613 — Plan Approval.
Section 317A.615 — Articles Of Merger Or Consolidation; Certificate.
Section 317A.621 — Merger Of Wholly Owned Subsidiaries.
Section 317A.631 — Abandonment.
Section 317A.641 — Effective Date Of Merger Or Consolidation; Effect.
Section 317A.643 — Continuance Of Corporate Authority.
Section 317A.651 — Merger Or Consolidation With Foreign Corporation.
Section 317A.661 — Transfer Of Assets; Required Approval.
Section 317A.671 — Certain Assets Not To Be Diverted.
Section 317A.681 — Conversion.
Section 317A.683 — Action On Plan Of Conversion By Converting Corporation.
Section 317A.685 — Filings Required For Conversion; Effective Date And Time.
Section 317A.687 — Abandonment.
Section 317A.689 — Effect Of Conversion.
Section 317A.701 — Methods Of Dissolution.
Section 317A.711 — Voluntary Dissolution By Incorporators.
Section 317A.721 — Voluntary Dissolution By Board And Members With Voting Rights.
Section 317A.723 — Filing Notice Of Intent To Dissolve; Effect.
Section 317A.725 — Procedure In Dissolution.
Section 317A.727 — Notice To Creditors And Claimants.
Section 317A.729 — Claims In Dissolution.
Section 317A.730 — Statute Of Limitations.
Section 317A.731 — Revocation Of Dissolution Proceedings.
Section 317A.733 — Articles Of Dissolution; Certificate Of Dissolution; Effect.
Section 317A.735 — Distribution Of Assets.
Section 317A.741 — Supervised Voluntary Dissolution.
Section 317A.751 — Judicial Intervention; Equitable Remedies Or Dissolution.
Section 317A.753 — Procedure In Involuntary Or Supervised Voluntary Dissolution.
Section 317A.755 — Qualifications Of Receivers; Powers.
Section 317A.759 — Filing Claims In Proceedings To Dissolve.
Section 317A.763 — Decree Of Dissolution.
Section 317A.765 — Filing Decree.
Section 317A.771 — Deposit With Commissioner Of Management And Budget Of Amount Due Certain Persons.
Section 317A.781 — Claims Barred; Exceptions.
Section 317A.783 — Right To Sue Or Defend After Dissolution.
Section 317A.791 — Omitted Assets.
Section 317A.811 — Notice To Attorney General; Waiting Period.
Section 317A.813 — Remedial Powers Of Attorney General.
Section 317A.821 — Initial Corporate Registration With Secretary Of State.
Section 317A.823 — Annual Corporate Renewal.
Section 317A.825 — Acceptance Of Registration By Secretary Of State.
Section 317A.827 — Continuation For Certain Purposes; Reinstatement.
Section 317A.901 — Service Of Process On Corporation.
Section 317A.903 — State Interested; Proceedings.
Section 317A.905 — Chambers Of Commerce, Boards Of Trade, Exchanges.
Section 317A.907 — Corporations To Secure Or Maintain Homes For Dependent Children.