Corporate Interested-Director Transaction Requirements in Maine

At a glance

Requirements one by one

Control includes economic exposure as well as board power

Me. Rev. Stat. tit. 13-C, § 871(1-A) includes majority power to elect or remove the governing body and majority exposure to risk of loss or residual returns. Its related-person list includes named family and household members, controlled entities, fiduciary and common-board relationships, and the individual’s employer.

Qualification turns on the action and relationship

Section 102(32-A) excludes a director with the transaction conflict or a material relationship to another conflicted director. Material relationships use expected impairment of objective judgment. Nomination by a nonqualified director or shared service on another board does not automatically disqualify the approving director.

Modified disclosure is limited to the specified entity and employer branches

Section 873(2-A) applies only when the conflict arises solely through the related persons in § 871(3)(F) or (G) and the director reasonably believes disclosure would violate law, an enforceable confidentiality obligation, or a professional ethics rule. The director must still disclose nonprotected information, the conflict’s nature, and the nondisclosure duty’s nature.

Approval and quorum use different qualified-director denominators

Section 873 requires a majority of qualified directors who vote for approval and a majority of all qualified directors on the body for quorum. Both require at least two. With five qualified directors, three form quorum; two affirmative votes suffice if those three vote. The committee qualifications need separate attention, as discussed below.

Meeting notice fixes the shareholder electorate

Section 874(1) fixes meeting voters at the notice record date. Approval requires a majority of qualified votes cast, while quorum uses all qualified entitled votes. The director must report known nonqualified shares and holders before the vote. Section 874(7)(B) excludes known or notified director and related-person holdings, with an express employer-branch exception.

Fairness is defined in the remedy provision

Section 872(2)(C) asks whether the whole transaction benefited the corporation, considering the director’s dealings and an arms-length comparison for the consideration. Section 871(3-A) supplies the relevant time: qualifying board action or, without it, the corporation’s or controlled entity’s binding commitment. No general named-party fairness burden appears in these provisions.

General written action is complete on delivery of all consents

Section 822 requires each director to sign and deliver a consent unless the articles or bylaws require a meeting. A signed revocation delivered before the complete unrevoked set arrives withdraws consent. The conflict provisions do not supply a special omitted-signature route.

Opportunities extend to officers and related persons

Section 881 covers pursuit by directors, officers, or their related persons. It provides precommitment disclaimer and compliant articles-based duty-limitation routes. Section 811 separately permits board-set director compensation absent contrary governing records. These provisions do not create a general controlling-stockholder transaction process.

The statute protects against a specified ground of relief

Section 872 addresses the specified equitable relief, damages, and sanctions against directors on the transaction-interest ground in shareholder or corporate proceedings. Section 1601 requires permanent meeting and action records and permits electronic or reasonably paper-convertible records.

What trips people up

Section 873(1) introduces its outside-other-director deliberation and membership conditions with “except that action by a committee is effective under this section only if.” That committee-specific framing should not be silently replaced with another state’s universal board wording.

Section 874(4) names the clerk or another authorized tabulator as the recipient of the written share report, while the qualified-share definition names the secretary or another authorized counter. Both provisions permit an authorized officer or agent; the actual recipient and voting record matter.

Sections 873(5) and 874(6) require independent action when another law or governing record has an unmet authorization requirement. Nonqualified directors or shares may participate in that separate action, and nonqualified-share presence or voting does not itself spoil an otherwise compliant conflict vote.

Common questions

Can a court address a missing share report?

Section 874(5) permits discretion if reporting is the sole defect and the director establishes the omission was neither intended to influence nor determinative of the vote. It is not automatic protection.

Can approval occur after the transaction?

Section 872(2)(A)-(B) permits compliant board or shareholder action “at any time,” subject to the disclosure and procedural conditions.

Does skipping the opportunity disclaimer establish a breach?

Section 881(2) says that omission creates no inference that the opportunity should first have been offered to the corporation and does not alter the otherwise-applicable burden of proof.

Statutes and sources

All official texts below were accessed September 4, 2026.

• Me. Rev. Stat. tit. 13-C, § 871 — Official text: “§871. Definitions As used in this subchapter, unless the context otherwise indicates, the following terms have the following meanings. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] 1. Conflicting interest. [PL 2007, c. 289, §27 (RP).] 1-A. Control. "Control" means: 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 [PL 2007, c. 289, §27 (NEW).] 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. [PL 2007, c. 289, §27 (NEW).] [PL 2007, c. 289, §27 (NEW).] 1-B. Controlled by. "Controlled by" means a person subject to control by another person. [PL 2007, c. 289, §27 (NEW).] 2. Director's conflicting-interest transaction. "Director's conflicting-interest transaction" means, as effected or proposed to be effected by a corporation or by an entity controlled by a corporation, a transaction: A. To which, at the relevant time, the director is a party; [PL 2007, c. 289, §27 (NEW).] B. That the director knew of, at the relevant time, and in which the director had a material financial interest, known by the director; or [PL 2007, c. 289, §27 (NEW).] C. To which a related person was a party or had a material financial interest in, known, at the relevant time, by the director. [PL 2007, c. 289, §27 (NEW).] [PL 2007, c. 289, §27 (AMD).] 2-A. Material financial interest. "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. [PL 2007, c. 289, §27 (NEW).] 3. Related person. "Related person" means: A. The individual's spouse; [PL 2015, c. 259, §14 (AMD).] B. [PL 2007, c. 289, §27 (RP).] C. A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsibling, half sibling, aunt, uncle, niece or nephew, or spouse of any of those persons, of the individual or of the individual's spouse; [PL 2015, c. 259, §14 (AMD).] D. Another individual living in the same home as the individual; [PL 2015, c. 259, §14 (AMD).] E. An entity, other than the corporation or an entity controlled by the corporation, controlled by the individual or any person specified in paragraph A, C or D; [PL 2015, c. 259, §14 (AMD).] F. A domestic or foreign: (1) Business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which the individual is a director; (2) Unincorporated entity of which the individual is a general partner or a member of the governing body; or (3) Individual, trust or estate for whom or of which the individual is a trustee, guardian, personal representative or like fiduciary; or [PL 2015, c. 259, §14 (AMD).] G. A person that is, or an entity that is controlled by, an employer of the individual. [PL 2015, c. 259, §14 (AMD).] [PL 2015, c. 259, §14 (AMD).] 3-A. Relevant time. "Relevant time," with regard to a transaction, means: A. The time at which the directors' action regarding the transaction is taken in compliance with section 873; or [PL 2007, c. 289, §27 (NEW).] B. If the transaction is not brought before the board of directors of the corporation, or its committee, for action under section 873, the time at which the corporation or an entity controlled by the corporation becomes legally obligated to consummate the transaction. [PL 2007, c. 289, §27 (NEW).] [PL 2007, c. 289, §27 (NEW).] 4. Required disclosure. "Required disclosure" means disclosure of: A. The existence and nature of the director's conflicting interest; and [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] B. All facts known to the director regarding the subject matter of the transaction that a director without such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction. [PL 2007, c. 289, §27 (AMD).] [PL 2007, c. 289, §27 (AMD).] 5. Time of commitment. [PL 2007, c. 289, §27 (RP).]”

• Me. Rev. Stat. tit. 13-C, § 872 — Official text: “§872. Judicial action 1. Nonconflicting-interest transaction not actionable. A transaction effected or proposed to be effected by a corporation, or by an entity controlled by a corporation, may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation on the ground that the director has an interest regarding the transaction if it is not a director’s conflicting-interest transaction. [PL 2007, c. 289, §28 (AMD).] 2. Conflicting-interest transaction not actionable if standards met. A director's conflicting- interest transaction may not be the subject of equitable relief or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest regarding the transaction, if: A. Directors' action regarding the transaction was taken in compliance with section 873 at any time; [PL 2007, c. 289, §28 (AMD).] B. Shareholders' action regarding the transaction was taken in compliance with section 874 at any time; or [PL 2007, c. 289, §28 (AMD).] C. The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation. For purposes of this paragraph, a transaction is fair to a corporation if, taken as a whole, the transaction was beneficial to the corporation, taking into appropriate account whether the transaction was: (1) Fair in terms of the director's dealings with the corporation; and (2) Comparable to what might have been obtained in an arms-length transaction, given the consideration paid or received by the corporation. [PL 2007, c. 289, §28 (AMD).] [PL 2007, c. 289, §28 (AMD).]”

• Me. Rev. Stat. tit. 13-C, § 873 — Official text: “§873. Directors' action 1. Action regarding transaction. Directors' action regarding a director's conflicting-interest transaction is effective for purposes of section 872, subsection 2, paragraph A if the transaction has been authorized by the affirmative vote of a majority, but no fewer than 2, of the qualified directors who voted on the transaction, after required disclosure by the conflicted director of information not already known by those qualified directors, or after modified disclosure in compliance with subsection 2‑A, except that action by a committee is effective under this section only if: A. The qualified directors have deliberated and voted outside the presence of and without the participation by any other director; and [PL 2007, c. 289, §29 (AMD).] B. When the action has been taken by a committee, all members of the committee were qualified directors and either: (1) The committee was composed of all the qualified directors on the board of directors; or (2) The members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board. [PL 2007, c. 289, §29 (AMD).] [PL 2007, c. 289, §29 (AMD).] 2. Disclosure; conflicting interest. [PL 2007, c. 289, §29 (RP).] 2-A. Disclosure; conflicting interest. Notwithstanding subsection 1, when a transaction is a director's conflicting-interest transaction only because a related person described in section 871, subsection 3, paragraph F or G is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality or a professional ethics rule, as long as the conflicted director discloses to the qualified directors voting on the transaction: A. All information required to be disclosed that would not violate a duty or obligation of the director; [PL 2007, c. 289, §29 (NEW).] B. The existence and nature of the director's conflicting interest; and [PL 2007, c. 289, §29 (NEW).] C. The nature of the conflicted director's duty not to disclose the confidential information. [PL 2007, c. 289, §29 (NEW).] [PL 2007, c. 289, §29 (NEW).] 3. Quorum. A majority, but no fewer than 2, of all the qualified directors on the board of directors or on a committee, constitutes a quorum for purposes of action that complies with this section. [PL 2007, c. 289, §29 (AMD).] 4. Qualified director. [PL 2007, c. 289, §29 (RP).] 5. Authorization when qualified director's action not taken. When directors' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate. [PL 2007, c. 289, §29 (NEW).]”

• Me. Rev. Stat. tit. 13-C, § 874 — Official text: “§874. Shareholders' action 1. Shareholders' action. Shareholders' action regarding a director's conflicting-interest transaction is effective for purposes of section 872, subsection 2, paragraph B if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after: A. Notice to shareholders describing the action to be taken regarding the transaction; [PL 2007, c. 289, §30 (AMD).] B. Provision to the corporation of the information referred to in subsection 4; and [PL 2007, c. 289, §30 (AMD).] C. Communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure, to the extent the information is not known by them. [PL 2007, c. 289, §30 (AMD).] In the case of shareholders' action at a meeting, the shareholders entitled to vote are determined as of the record date for notice of the meeting. [PL 2011, c. 274, §36 (AMD).] 2. Qualified shares. [PL 2007, c. 289, §30 (RP).] 3. Quorum. A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this section. Subject to subsection 5, shareholders' action that otherwise complies with this section is not affected by the presence of holders of shares that are not qualified shares, or the voting of shares that are not qualified shares. [PL 2007, c. 289, §30 (AMD).] 4. Identification of holdings. A director who has a conflicting interest regarding the transaction shall, before the shareholders' vote, inform the clerk or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under subsection 3 and the identity of the holders of those shares. [PL 2007, c. 289, §30 (AMD).] 5. Failure to comply. If a shareholders' vote does not comply with subsection 1 solely because of a director's failure to comply with subsection 4 and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take such action regarding the transaction and the director and may give such effect, if any, to the shareholders' vote as the court considers appropriate in the circumstances. [PL 2007, c. 289, §30 (AMD).] 6. Authorization when qualified shareholder action not taken. When shareholders' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which action shareholders that are not qualified shareholders may participate. [PL 2007, c. 289, §30 (NEW).] 7. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings. A. [PL 2015, c. 259, §15 (RP).] B. "Qualified shares" means all shares entitled to be voted with respect to the transaction except for shares that the secretary or other officer or agent of the corporation authorized to count votes either knows, or under subsection 4 is notified, are held by: (1) A director who has a conflicting interest regarding the transaction; or (2) A related person of the director, excluding a person described in section 871, subsection 3, paragraph G. [PL 2015, c. 259, §15 (AMD).] [PL 2015, c. 259, §15 (AMD).]”

• Me. Rev. Stat. tit. 13-C, § 881 — Official text: “§881. Business opportunities 1. Business opportunity not actionable if standards met. If a director or officer or related person of either pursues or takes advantage, directly or indirectly, of a business opportunity, that action may not be the subject of equitable relief or give rise to an award of damages or other sanctions against the director, officer or related person, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if : A. Before the director, officer or related person becomes legally obligated regarding the opportunity, the director or officer brings it to the attention of the corporation and action by qualified directors disclaiming the corporation’s interest in the opportunity is taken in compliance with the same procedures set forth in section 873; [PL 2015, c. 259, §16 (AMD).] B. Before the director, officer or related person becomes legally obligated regarding the opportunity, the director or officer brings it to the attention of the corporation and action by shareholders disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in section 874, as if the decision being made concerned a director’s conflicting-interest transaction as defined in section 871, subsection 2; or [PL 2015, c. 259, §16 (AMD).] C. The duty to offer the corporation the particular business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted and in the case of officers and their related persons, made effective by action of qualified directors in accordance with section 202, subsection 2, paragraph F. [PL 2015, c. 259, §16 (NEW).] In each case under paragraph A or B, the director, rather than making a required disclosure as defined in section 871, subsection 4, must have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director. [PL 2015, c. 259, §16 (AMD).] 2. No inference or change in burden of proof. In any proceeding seeking equitable relief or other remedies based upon an alleged improper pursuit or taking advantage of a business opportunity by a director or officer, the fact that the director or officer did not employ the procedure described in subsection 1, paragraph A or B before taking advantage of the opportunity does not create an inference that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director breached a duty to the corporation in the circumstances. [PL 2015, c. 259, §16 (AMD).] 3. Related person. As used in this section, "related person" has the meaning set forth in section 871, subsection 3. [PL 2015, c. 259, §16 (NEW).]”

• Me. Rev. Stat. tit. 13-C, § 822 — Official text: “§822. Action without meeting 1. Action without meeting. Except to the extent that the corporation's articles of incorporation or bylaws require that action by the corporation's board of directors be taken at a meeting, action required or permitted by this Act to be taken by a corporation's board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] 2. Delivery of consents; revocation. Action taken under this section is the act of the corporation's board of directors when one or more consents signed by all the directors are delivered to the corporation. The consent may specify the time at which the action taken under the consent is to be effective. A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by all of the directors. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] 3. Effect of signed consent. A consent signed under this section has the effect of action taken at a meeting of the corporation's board of directors and may be described as such in any document. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).]”

• Me. Rev. Stat. tit. 13-C, § 811 — Official text: “§811. Compensation of directors Unless the corporation's articles of incorporation or bylaws provide otherwise, the corporation's board of directors may fix the compensation of directors. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).]”

• Me. Rev. Stat. tit. 13-C, § 102(32-A) — Official text: “32-A. Qualified director. "Qualified director" is defined in this subsection. A. As used in this subsection, unless the context otherwise indicates, the following terms have the following meanings: (1) "Director’s conflicting-interest transaction" has the same meaning as in section 871; (2) "Material interest" means an actual or potential benefit or detriment, other than one that would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken; and (3) "Material relationship" means a familial, financial, professional, employment or other relationship that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken. [PL 2007, c. 289, §3 (NEW).] B. "Qualified director" means a person who, at the time action is to be taken under: (1) Section 755, does not have: (a) A material interest in the outcome of the proceeding; or (b) A material relationship with a person who has such an interest; (2) Section 854 or 856: (a) Is not a party to the proceeding; (b) Is not a director as to whom a transaction is a director’s conflicting-interest transaction or who sought a disclaimer of the corporation’s interest in a business opportunity under section 881, which transaction or disclaimer is challenged in the proceeding; and (c) Does not have a material relationship with a director described in division (a) or (b); (3) Section 873, is not a director: (a) As to whom the transaction is a director’s conflicting-interest transaction; or (b) Who has a material relationship with another director as to whom the transaction is a director’s conflicting-interest transaction; (4) Section 881, would be a qualified director under subparagraph (3) if the business opportunity was a director’s conflicting-interest transaction; or (5) Section 202, subsection 2, paragraph F, is not a director: (a) To whom the limitation or elimination of a duty of an officer to offer potential business opportunities to the corporation would apply; or (b) Who has a material relationship with another officer to whom the limitation or elimination would apply. [PL 2015, c. 259, §1 (AMD).] C. The presence of one or more of the following circumstances does not automatically prevent a director from being a qualified director: (1) Nomination or election of the director to the board by a director who is not a qualified director with respect to the matter, or by any person who has a material relationship with that director, acting alone or participating with others; (2) Service as a director of another corporation of which a director who is not a qualified director with respect to the matter or any individual who has a material relationship with that director is or was also a director; or (3) With respect to action to be taken under section 755, status as a named defendant, as a director against whom action is demanded or as a director who approved the conduct being challenged. [PL 2007, c. 289, §3 (NEW).] [PL 2015, c. 259, §1 (AMD).]”

• Me. Rev. Stat. tit. 13-C, § 1601(1)-(4) — Official text: “§1601. Corporate records 1. Minutes of meetings. A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] 2. Accounting records. A corporation shall maintain appropriate accounting records. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] 3. Record of shareholders. A corporation or its agent shall maintain a record of its shareholders in a form that permits preparation of a list of the names and addresses of all shareholders in alphabetical order by class of shares showing the number and class of shares held by each. [PL 2001, c. 640, Pt. A, §2 (NEW); PL 2001, c. 640, Pt. B, §7 (AFF).] 4. Records; written, electronic. A corporation shall maintain its records in the form of a document, including an electronic record, or in another form capable of conversion into paper form within a reasonable time. [PL 2011, c. 274, §74 (AMD).]”