{"data":{"id":"us-ky/krs-271b.8-310","jurisdiction":"us-ky","citation":"KRS 271B.8-310","heading":"Director conflict of interest.","body":"(1) A conflict of interest transaction shall be a transaction with the corporation in which\na director of the corporation has a direct or indirect interest. A conflict of interest\ntransaction shall not be voidable by the corporation solely because of the direc tor's\ninterest in the transaction if any one (1) of the following is true:\n(a) The material facts of the transaction and the director's interest were disclosed\nor known to the board of directors or a committee of the board of directors\nand the board of dir ectors or committee authorized, approved, or ratified the\ntransaction;\n(b) The material facts of the transaction and the director's interest were disclosed\nor known to the shareholders entitled to vote and they authorized, approved,\nor ratified the transaction; or\n(c) The transaction was fair to the corporation.\n(2) For purposes of this section, a director of the corporation shall have an indirect\ninterest in a transaction if:\n(a) Another entity in which he has a material financial interest or in which he i s a\ngeneral partner is a party to the transaction; or\n(b) Another entity of which he is a director, officer, or trustee is a party to the\ntransaction and the transaction is or should be considered by the board of\ndirectors of the corporation.\n(3) For purposes of subsection (1)(a) of this section, a conflict of interest transaction\nshall be considered authorized, approved, or ratified if it receives the affirmative\nvote of a majority of the directors on the board of directors (or on the committee)\nwho have no direct or indirect interest in the transaction, but a transaction shall not\nbe authorized, approved, or ratified under this section by a single director. If a\nmajority of the directors who have no direct or indirect interest in the transaction\nvote to au thorize, approve, or ratify the transaction, a quorum shall be present for\nthe purpose of taking action under this section. The presence of, or a vote cast by, a\ndirector with a direct or indirect interest in the transaction shall not affect the\nvalidity of any action taken under subsection (1)(a) of this section if the transaction\nis otherwise authorized, approved, or ratified as provided in that subsection.\n(4) For purposes of subsection (1)(b) of this section, a conflict of interest transaction\nshall be considered authorized, approved, or ratified if it receives the vote of a\nmajority of the shares entitled to be counted under this subsection. Shares owned by\nor voted under the control of a director who has a direct or indirect interest in the\ntransaction, and shares owned by or voted under the control of an entity described in\nsubsection (2)(a) of this section, may not be counted in a vote of shareholders to\ndetermine whether to authorize, approve, or ratify a conflict of interest transaction\nunder subsection (1)(b) of this section. The vote of those shares, however, shall be\ncounted in determining whether the transaction is approved under other sections of\nthis chapter. A majority of the shares that are entitled to be counted in a vote on the\ntransaction under this subsection shall constitute a quorum for the purpose of taking\naction under this section.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=13390","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:19Z","sha256":"562d16fda7e8f1644e8c0867e85c4324c4cdff97ae0c40e86024982445d9421f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-271b.8-300","next":"us-ky/krs-271b.8-320"},"notice":"GroundRules: Original legal text. Not legal advice."}