{"data":{"id":"us-tx/tex.-business-organizations-code-1.003","jurisdiction":"us-tx","citation":"Tex. Business Organizations Code § 1.003","heading":"DISINTERESTED PERSON.","body":"(a) For purposes of this code, 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(b) For purposes of Subsection (a), a person is not materially involved in a contract or transaction 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.\nActs 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.","path":["BUSINESS ORGANIZATIONS CODE","TITLE 1. GENERAL PROVISIONS","CHAPTER 1. DEFINITIONS AND OTHER GENERAL PROVISIONS","SUBCHAPTER A. DEFINITIONS AND PURPOSE"],"source_url":"https://statutes.capitol.texas.gov/Docs/BO/htm/BO.1.htm#1.003","current_through":"89th 2nd Called Legislative Session, 2025","vintage":"","retrieved_at":"2026-08-27T01:46:58Z","sha256":"6f65891744b768b5f35c30e843db5434dce987fcd8d7c0a3ba6c81a80b0ea882","source_id":"us-tx","stale":false,"prev":"us-tx/tex.-business-organizations-code-1.002","next":"us-tx/tex.-business-organizations-code-1.004"},"notice":"GroundRules: Original legal text. Not legal advice."}