Corporate Interested-Director Transaction Requirements in Florida

At a glance

Requirements one by one

Governing law, entity, transaction, and covered-person scope

Fla. Stat. § 607.01401(13) defines the Chapter 607 domestic corporation as a nonforeign corporation for profit incorporated under the chapter. Fla. Stat. § 607.0832(1)(a) covers a corporation-director transaction and an another-entity transaction in which a director is directly or indirectly a party and has a direct or indirect material financial or other material interest. Merely being an indirect party as a shareholder of the corporation is excluded from that definition.

The section names directors, not a general officer-conflict route. Its process also does not replace separate transaction authorization, governing-document, fiduciary, securities, or public-company requirements.

Interest, relationship, and qualified-director definitions

Section 607.0832 defines an indirect party to include a director with a material financial interest in, or serving as director, officer, member, manager, or partner of, the other party. It also reaches specified family financial interests and a transaction entity that controls or is controlled by the director or another named person. A material financial or other interest is one reasonably expected to impair the director's judgment objectivity.

Fla. Stat. § 607.0143(1)(b), (2) adds the voter screen. A qualified director is neither a director whose transaction is conflicted nor one with a material relationship to such a director. A material relationship is familial, financial, professional, employment, or another relationship reasonably expected to impair judgment objectivity.

Disclosure and qualified-director approval

The material transaction facts and the director's interest must be disclosed or known to the board or committee that authorizes, approves, or ratifies. A majority of qualified directors must vote for the transaction. They may act even if they constitute fewer than a quorum, but one director alone cannot use this route.

That conflict-procedure vote can be distinct from ordinary authorization. Section 607.0832(6) requires separate board or committee action if the conflict vote does not satisfy a quorum or vote required by the articles, bylaws, Chapter 607, or another law; nonqualified directors may participate in that separate action.

Disinterested-shareholder approval

After disclosure to or knowledge by the voting shareholders, the transaction needs a majority of the votes cast by disinterested shareholders or written consent representing a majority of all votes that could be cast by disinterested shareholders. Interested-director-owned or controlled shares are excluded from that conflict vote. A majority of eligible shares, whether present or not, is its quorum.

Those excluded shares may still count toward independently required ordinary authorization. Section 607.0832(7) requires separate shareholder action when the conflict vote does not satisfy another applicable quorum or vote rule.

Fairness and the burden shift

Florida defines “fair to the corporation” as a transaction that, as a whole, is beneficial to the corporation and its shareholders, considering fairness in the director's dealings and comparison with what an arm's-length transaction might have produced. Fairness is judged at authorization, approval, effectuation, or ratification.

The approval record allocates the statutory burden. When either informed qualified-director or disinterested-shareholder condition is satisfied, the challenger bears the burden of proving lack of fairness. If neither condition is satisfied, the person defending or asserting validity bears the burden of proving fairness. This cell reports that allocation without deciding the facts.

Presence, voting, and written action

Under § 607.0832(4), an interested director's presence or vote does not affect an otherwise compliant conflict action and may count for separate ordinary authorization. A challenger can still prove that a director or shareholder was not disinterested on financial or other-interest grounds.

Fla. Stat. § 607.0821 supplies the ordinary written-action rule: unless the articles or bylaws say otherwise, every board or committee member signs and delivers one or more written consents describing the action. Section 607.0832 does not supply California-style written abstention machinery; the disclosure, qualified-voter, and burden rules still must be applied to the chosen process.

Special routes and statutory effect

If the transaction is fair at the statutory time, § 607.0832(2) says it is not void or voidable and the conflict is not grounds for equitable relief, damages, or other sanctions because of the relationship or interest, interested presence, or counted vote. Approval alone establishes the burden allocation in subsection (3); it does not permit this cell to pronounce the transaction fair.

Fla. Stat. § 607.0833 separately authorizes certain corporate loans, guarantees, or assistance for officers, directors, and employees, but expressly makes that assistance subject to § 607.0832. The core conflict section states no controlling-stockholder, going-private, compensation, or general officer branch.

Records and external boundaries

Fla. Stat. § 607.1601(1)(e) requires records of shareholder, board, and board- committee meetings and actions without a meeting. The record can preserve the disclosure, voter eligibility, quorum, vote, consent, and authorization, but it cannot by itself prove materiality, disinterestedness, fairness, authority, fiduciary compliance, or litigation outcome.

What trips people up

Florida separates conflict-procedure approval from ordinary transaction authorization. Qualified directors can use the conflict route even below an ordinary quorum, but subsection (6) then requires independent action if another law or governing record still demands a quorum or vote.

Approval and fairness are also not synonyms. Informed qualified or disinterested approval shifts who bears the fairness burden; subsection (2)'s stated protection still depends on fairness at the statutory time.

Common questions

Can one qualified director approve the conflict route?

No. Section 607.0832(3)(a)1. expressly says the transaction cannot qualify solely through one director, even though qualified directors may be fewer than an ordinary quorum.

Can interested shares count at all?

They cannot count for the disinterested-shareholder conflict vote, but the statute says they may count in a separate vote required to authorize the transaction under another provision.

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

Section 607.0832's definition is director-based. Section 607.0833 subjects specified loans and assistance involving officers to the director-conflict section, but that does not create a general officer-conflict branch for every transaction.

Statutes and sources

• Fla. Stat. §§ 607.01401 and 607.0143 — domestic corporation and qualified-director definitions. Official Chapter 607 text, accessed September 4, 2026.
• Fla. Stat. §§ 607.0821 and 607.0832 — written board action and conflict definitions, disclosure, approvals, fairness, burdens, participation, authorization, and statutory effect. Official Chapter 607 text, accessed September 4, 2026.
• Fla. Stat. § 607.0833 — loans and assistance subject to the conflict rule. Official Chapter 607 text, accessed September 4, 2026.
• Fla. Stat. § 607.1601(1)(e) — meeting and written-action records. Official Chapter 607 text, accessed September 4, 2026.