Corporate Interested-Director Transaction Requirements in Connecticut

At a glance

Requirements one by one

The conflict provisions reach proposed controlled-entity transactions

Conn. Gen. Stat. § 33-600 names the Connecticut Business Corporation Act, and § 33-602(6) defines a domestic corporation as a nonforeign Connecticut stock corporation. Section 33-781(1) reaches an effected or proposed transaction by that corporation or an entity it controls.

The transaction is conflicting when, at the relevant time, a director is a party, knowingly has a known material financial interest, or knows a related person is a party or materially interested. The ordinary provisions name directors rather than officers who are not also directors.

Control, related persons, and qualification are defined

Control includes majority power to elect or remove an entity's governing body and a separate majority-economic-risk-or-return branch. A material financial interest is one reasonably expected to impair the director's objectivity in the authorization decision.

The related-person definition reaches specified family and household members, controlled entities, listed governing and fiduciary roles, and an employer branch. Conn. Gen. Stat. § 33-605 excludes the conflicted director and a director with a material relationship to that person from qualified status. A real relationship requires facts, not its label alone.

Required and modified disclosure differ

Required disclosure includes the conflict's existence and nature and all facts known to the director that a conflict-free director would reasonably believe material to deciding whether to proceed. The board route needs disclosure of information the qualified directors do not already know.

For conflicts arising only through the governing/fiduciary or employer related- person branches, § 33-783(b) permits modified disclosure when the conflicted director reasonably believes full disclosure would violate law, an enforceable confidentiality obligation, or a professional-ethics rule. The director still must disclose all nonviolative information, the conflict, and the nature of the nondisclosure duty.

The shareholder route adds action notice, communication of required disclosure not already known, and a written pre-vote statement to the secretary or tabulator identifying known nonqualified shares and their holders.

Qualified-director approval has a two-person floor

Approval requires an affirmative majority of qualified directors voting, but never fewer than two. An approving committee must consist only of qualified directors and include either every qualified board director or members appointed by a qualified-director majority.

A majority, but no fewer than two, of all qualified board or committee directors forms the special conflict quorum. Unlike some qualified-director statutes, § 33-783 does not require deliberation outside the presence of every other director; subsection (c) says nonqualified-director presence or voting does not affect otherwise compliant action.

Qualified shares use different quorum and approval denominators

Shareholder approval requires a majority of votes cast by holders of qualified shares. The quorum is a majority of all votes entitled to be cast by those qualified shares, so the two denominators differ.

Qualified shares exclude shares held by the conflicted director and related persons, except the employer branch in § 33-781(5)(F). “Holder” reaches record and beneficial shareholders. Presence or voting by nonqualified shares does not affect an otherwise compliant action, subject to the statute's narrow cure for a nonoutcome-determinative identification failure.

Conflict approval may not complete ordinary authorization

Sections 33-783(d) and 33-784(f) expressly preserve an independent action when the conflict vote does not meet a certificate, bylaw, or other-law quorum or vote requirement for transaction authorization. Nonqualified directors or shares may participate in that separate action.

Fairness is defined and tied to the relevant time

Fairness asks whether the transaction as a whole was beneficial to the corporation, appropriately accounting for fair director dealings and comparison with what might have been obtainable at arm's length given the consideration. Relevant time is the compliant board-action time or, absent such action, when the corporation or controlled entity becomes legally obligated to close.

Section 33-782(b)(3) says fairness must be established but does not expressly name who carries that burden. This cell does not add a burden rule from outside the statute.

Presence, voting, and unanimous consent are distinct

Nonqualified-director presence or voting does not affect an otherwise compliant qualified-director action. That does not make a nonqualified vote part of the required qualified majority.

Section 33-749 generally requires every director to sign and deliver a consent for board action without a meeting. The conflict provisions do not supply a special written-abstention or conflicted-signature mechanism, so conflict protection and ordinary authorization must each be satisfied.

Officers appear in the separate business-opportunity rule

Section 33-785 separately covers a business opportunity pursued by a director or officer directly or through another person. Before becoming legally obligated, the person may bring it to the corporation for a qualified-director disclaimer under § 33-783 or a qualified-share disclaimer under § 33-784. A certificate provision may instead limit or eliminate the offer duty, with qualified-director action where required.

That separate route does not convert §§ 33-781 to 33-784 into a general officer- conflict procedure.

The statutory effect is ground-specific

Under § 33-782(b), a compliant route bars equitable relief, director damages, or other sanctions in the named shareholder or corporate proceeding on the ground of the director's interest. Subsection (a) gives the same interest-ground protection when the transaction is not a director's conflicting-interest transaction. Neither provision declares every transaction authorized, valid, fair, or immune from another ground.

Section 33-945 requires permanent shareholder, board, and committee meeting and no-meeting action records in document, electronic, or paper-convertible form. A record documents process without proving disclosure, qualification, fairness, or compliance.

What trips people up

Connecticut's special board quorum is a majority of all qualified directors, with a floor of two. The approving vote is a majority of qualified directors who vote, but the action also needs the all-qualified committee structure when a committee acts.

The shareholder route uses a votes-cast approval threshold but a voting-power quorum. A majority of all votes entitled from qualified shares must form the quorum even though approval is measured from votes actually cast.

Common questions

Must the conflicted director leave the meeting?

Section 33-783 states no departure requirement. Subsection (c) says a nonqualified director's presence or vote does not affect otherwise compliant action, though the required approval must still come from qualified directors.

Does the ordinary conflict route cover an officer who is not a director?

Sections 33-781 to 33-784 define a director's conflicting-interest transaction. Officers are expressly included in the separate business-opportunity provision.

Is a majority of qualified-share votes cast enough by itself?

No. The action also requires a majority-of-qualified-voting-power quorum plus the notice, required disclosure, and holder-identification predicates.

Does approval prove the transaction is fair?

No. Qualified-director approval, qualified-share approval, and established fairness are alternative statutory routes.

Statutes and sources

• Conn. Gen. Stat. §§ 33-600, 33-602(6), and 33-605 — Act scope, domestic corporation, qualified director, and material relationship.
• Conn. Gen. Stat. § 33-749 — written board action.
• Conn. Gen. Stat. §§ 33-781 through 33-784 — definitions, judicial effect, qualified-director action, and qualified-share action.
• Conn. Gen. Stat. § 33-785 — business opportunities.
• Conn. Gen. Stat. § 33-945 — permanent corporate action records.

All are in the official Connecticut Chapter 601 text, accessed September 4, 2026.