Title 13.1. Corporations
Chapter 9. Virginia Stock Corporation Act
§ 13.1-691. Interested directors and officers.
A. A transaction between the corporation or one or more entities controlled by the corporation and one or more of the corporation's directors, officers, or related persons, shall not be the subject of equitable relief, or give rise to an award of damages against a director or officers of the corporation because of the foregoing circumstances or the receipt of any benefit by any such director, officer, or related person or because the director or officer is present at or participates in the meeting of the board or committee that authorizes the transaction, or was involved in the initiation, negotiation, or approval of the transaction, including by virtue of a director's vote being counted for such purpose, if:
1. The material facts of the director's or officer's relationship or interest as to the transaction were disclosed or are known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved, or ratified the transaction; or
2. The material facts of the transaction and the director's or officer's relationship or interest as to the transaction were disclosed to the disinterested shareholders and they authorized, approved, or ratified the transaction; or
3. The transaction is fair to the corporation.
B. For purposes of subdivision A 1, a transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the disinterested directors on the board of directors, or on the committee. A transaction shall not be authorized, approved, or ratified under this section by a single director. If a majority of the disinterested directors vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director who is not disinterested does not affect the validity of any action taken under subdivision A 1 if the transaction is otherwise authorized, approved or ratified as provided in that subsection.
C. For purposes of subdivision A 2, a transaction is authorized, approved, or ratified if a quorum exists and it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director, officer, or related person who, in each case, has a material interest in the transaction, other than one which would devolve on the corporation or the shareholders generally shall not be counted in a vote of shareholders to determine whether to authorize, approve, or ratify a transaction under subdivision A 2, but such shares shall be counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.
D. For purposes of this section, a related person is a person who has a familial, financial, professional, or employment relationship with one or more directors or officers of the corporation that would reasonably be expected to impair the objectivity of the judgment of one or more of the corporation's directors or officers.
Code 1950, § 13.1-39.1; 1975, c. 500; 1980, c. 341; 1985, c. 522; 2005, c. 765; 2026, cc. 383, 892.