{"data":{"id":"us-mt/35-14-860","jurisdiction":"us-mt","citation":"35-14-860","heading":"Definitions -- director's conflicting interest transactions.","body":"For the purposes of 35-14-860 through 35-14-863, unless otherwise specified, the following definitions apply:\n(1) \"Control\" or \"controlled by\" means:\n(a) having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise; or\n(b) being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.\n(2) \"Director's conflicting interest transaction\" means a transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation:\n(a) to which, at the relevant time, the director is a party;\n(b) respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or\n(c) respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.\n(3) \"Fair to the corporation\" means, for purposes of 35-14-861(2)(c), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was:\n(a) fair in terms of the director's dealings with the corporation; and\n(b) comparable to what might have been obtainable in an arm's-length transaction, given the consideration paid or received by the corporation.\n(4) \"Material financial interest\" means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction.\n(5) \"Related person\" means:\n(a) an individual's spouse;\n(b) a child, stepchild, grandchild, parent, stepparent, grandparent, sibling, step sibling, half sibling, aunt, uncle, niece, or nephew, or spouse of any of them, of an individual or of an individual's spouse;\n(c) a natural person living in the same home as an individual;\n(d) an entity, other than the corporation or an entity controlled by the corporation, controlled by an individual or any person specified in subsections (5)(a) through (5)(c);\n(e) a domestic or foreign:\n(A) business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which an individual is a director;\n(B) unincorporated entity of which an individual is a general partner or a member of the governing body; or\n(C) individual, trust, or estate for whom or of which an individual is a trustee, guardian, personal representative, or similar fiduciary; or\n(f) a person that is or an entity that is controlled by an employer of an individual.\n(6) \"Relevant time\" means:\n(a) the time at which directors' action respecting the transaction is taken in compliance with 35-14-862; or\n(b) if the transaction is not brought before the board of directors or a committee for action under 35-14-862, the time at which the corporation or an entity controlled by the corporation becomes legally obligated to consummate the transaction.\n(7) \"Required disclosure\" means disclosure of:\n(a) the existence and nature of the director's conflicting interest; and\n(b) all facts known to the director respecting the subject matter of the transaction that a director free of that conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.","path":["TITLE 35. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS","CHAPTER 14. MONTANA BUSINESS CORPORATION ACT","Part 8. Directors and Officers"],"source_url":"https://mca.legmt.gov/bills/mca/title_0350/chapter_0140/part_0080/section_0600/0350-0140-0080-0600.html","current_through":"Montana Code Annotated 2025","vintage":"","retrieved_at":"2026-09-14T04:53:28Z","sha256":"1eff59c6895173891ad08c3233e55f57e1dde5d2ac3c37f98aa3ef5c5d470955","source_id":"us-mt","stale":false,"prev":"us-mt/35-14-859","next":"us-mt/35-14-861"},"notice":"GroundRules: Original legal text. Not legal advice."}