{"data":{"id":"us-al/ala.-code-10a-1-1.04","jurisdiction":"us-al","citation":"Ala. Code § 10A-1-1.04","heading":"Disinterested Person.","body":"(a) This section shall not apply to Chapters 2A, 3A, 4, and 11. In addition, provisions in a written limited liability company agreement under Chapter 5A, a written partnership agreement under Chapter 8A, and a written limited partnership agreement under Chapter 9A may provide that this section is not applicable.\n(b) Except as provided in subsection (a), for purposes of this title, a person is disinterested with respect to the approval of a contract, transaction, or other matter or to the consideration of the disposition of a claim or challenge relating to a contract, transaction, or particular conduct, if the person or the person’s associate:\n(1) is not a party to the contract or transaction or materially involved in the conduct that is the subject of the claim or challenge; and\n(2) does not have a material financial interest in the outcome of the contract or transaction or the disposition of the claim or challenge.\n(c) For purposes of subsection(b), a person is not materially involved in the conduct that is the subject of a claim or challenge and does not have a material financial interest in the outcome of a contract or transaction or the disposition of a claim or challenge solely because:\n(1) the person was nominated or elected as a governing person by a person who is:\n(A) interested in the contract or transaction; or\n(B) alleged to have engaged in the conduct that is the subject of the claim or challenge;\n(2) the person receives normal fees or customary compensation, reimbursement for expenses, or benefits as a governing person of the entity;\n(3) the person has a direct or indirect equity interest in the entity;\n(4) the entity has, or its subsidiaries have, an interest in the contract or transaction or was affected by the alleged conduct;\n(5) the person or an associate of the person receives ordinary and reasonable compensation for reviewing, making recommendations regarding, or deciding on the disposition of the claim or challenge; or\n(6) in the case of a review by the person of the alleged conduct that is the subject of the claim or challenge:\n(A) the person is named as a defendant in the derivative proceeding regarding the matter or as a person who engaged in the alleged conduct; or\n(B) the person, acting as a governing person, approved, voted for, or acquiesced in the act being challenged if the act did not result in a material personal or financial benefit to the person and the challenging party fails to allege particular facts that, if true, raise a significant prospect that the governing person would be held liable to the entity or its owners or members as a result of the conduct.","path":["Title 10A Alabama Business and Nonprofit Entities Code.","Chapter 1 General Provisions.","Article 1 Definitions and Other General Provisions.","Division A Definitions, Applicability, and Purpose."],"source_url":"https://alison.legislature.state.al.us/code-of-alabama?section=10A-1-1.04","current_through":"Act 2026-611","vintage":"","retrieved_at":"2026-09-03T14:01:53Z","sha256":"267d20185f5907fc2b66b4517e6babc3c67e669dfa13006380de149d39536466","source_id":"us-al","stale":false,"prev":"us-al/ala.-code-10a-1-1.03","next":"us-al/ala.-code-10a-1-1.05"},"notice":"GroundRules: Original legal text. Not legal advice."}