Corporate Interested-Director Transaction Requirements in Mississippi

At a glance

Requirements one by one

The conflict definition reaches controlled-entity transactions

Miss. Code § 79-4-1.40(4) defines a domestic corporation as a for-profit corporation incorporated under or subject to the Act. Section 79-4-8.60 also reaches transactions by an entity it controls. Control includes majority board-election or removal power, but also majority exposure to risk of loss or entitlement to residual returns.

Related persons and qualified directors use different tests

Section 79-4-8.60 includes household members and specifically listed relatives, including stepsiblings, half-siblings, aunts, uncles, nieces, and nephews. Its entity and employer branches extend beyond personal ownership.

Section 79-4-1.43 separately asks whether the approving director has the conflict or an objectivity-impairing material relationship with a conflicted director. Nomination by a nonqualified director and service together on another board do not automatically defeat qualification.

Disclosure starts with the director’s known facts

Required disclosure includes both the existence and nature of the conflict and all known transaction facts a conflict-free director would reasonably regard as material. Under § 79-4-8.62(b), the confidentiality exception applies only when the conflict arises solely through the specified fiduciary/entity or employer related-person branches. The director still must disclose the nonprotected information, conflict, and nature of the nondisclosure duty.

Qualified-director quorum and approval have different denominators

Section 79-4-8.62 uses all qualified directors on the board or committee for quorum, and the qualified directors who actually vote for approval. Each test has a two-director floor. For example, with five qualified board members, three constitute the special quorum; if three vote, two affirmative votes supply the approving majority. Only qualified directors may deliberate and vote in this procedure.

Qualified-share voting requires a written identification step

Before the shareholder vote, § 79-4-8.63 requires the conflicted director to give the tabulator a written count of known nonqualified shares and the holders’ identities. Exclusions cover both record and beneficial holdings. The employer related-person branch is expressly excepted from the related-person share exclusion.

Fairness considers the transaction as a whole

Sections 79-4-8.60(6) and 79-4-8.61(b)(3) ask whether the transaction was beneficial as a whole, taking account of the director’s dealings and what might have been obtainable at arm’s length for the consideration. Relevant time is the qualifying board action or, without that action, when the corporation or controlled entity becomes legally obligated to consummate it.

Unanimous consent has its own completion rule

Section 79-4-8.21 makes written action the board’s act when all directors’ signed consents are delivered to the corporation. A director may revoke before the corporation receives the complete unrevoked set. The conflict sections do not state that this general mechanism replaces their qualification, disclosure, deliberation, and voting requirements.

Business opportunities require attention before commitment

Section 79-4-8.70 provides a separate disclaimer procedure if the director brings the opportunity to the corporation before becoming legally obligated. It uses the qualified-director or shareholder procedures, with prior disclosure of all then-known material opportunity facts.

The protection has a specified ground and proceeding

Section 79-4-8.61 addresses equitable relief, damages, and other sanctions against the director in shareholder or corporate proceedings on the ground of the director’s transaction interest. It also protects transactions outside the defined conflicting-interest category from that ground of relief.

Section 79-4-16.01(a), (d) requires permanent meeting and action records and permits electronic records or another form convertible to paper within a reasonable time.

What trips people up

Qualified approval and ordinary corporate authorization are separate checks. Sections 79-4-8.62(d) and 79-4-8.63(f) require independent action if the conflict procedure does not satisfy an applicable articles, bylaws, or statutory quorum or voting requirement. Nonqualified directors or shares may participate in that independent action. Nonqualified-share presence or voting also does not itself defeat an otherwise compliant conflict vote.

Common questions

Can a court address an omitted written share report?

Section 79-4-8.63(e) gives the court discretion if that omission is the sole defect and the director establishes that it was not intended to influence and did not determine the vote. It is not automatic approval.

Must the conflict approval precede the transaction?

Section 79-4-8.61(b)(1)-(2) allows qualifying director or shareholder action “at any time.” The required disclosures and procedural conditions still apply.

Does skipping the opportunity disclaimer prove a breach?

No. Section 79-4-8.70(b) says failure to use it creates no inference that the opportunity first belonged to the corporation and does not change the otherwise-applicable burden of proof.

Statutes and sources

The official final acts below were accessed September 4, 2026. Their printed asterisks mark deleted text; those marks are retained in the quotations.

• Miss. Code § 79-4-1.40 — Official final act, accessed September 4, 2026: “(4) "Corporation" or "domestic corporation" means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of Section 79-4-1.01 et seq.”

• Miss. Code § 79-4-1.43 — Official final act, accessed September 4, 2026: “79-4-1.43. Qualified director. (a) A "qualified director" is a director who, at the time action is to be taken under: (1) Section 79-4-7.44, does not have (i) a material interest in the outcome of the proceeding, or (ii) a material relationship with a person who has such an interest; (2) Section 79-4-8.53 or 79-4-8.55, (i) is not a party to the proceeding, (ii) 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 8.70, which transaction or disclaimer is challenged in the proceeding, and (iii) does not have a material relationship with a director described in either clause (i) or clause (ii) of this subsection (a)(2); (3) Section 79-4-8.62, is not a director (i) as to whom the transaction is a director's conflicting interest transaction, or (ii) who has a material relationship with another director as to whom the transaction is a director's conflicting interest transaction; or (4) Section 79-4-8.70, would be a qualified director under subsection (a)(3) if the business opportunity were a director's conflicting interest transaction. (b) For purposes of this section: (1) "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; and (2) "Material interest" means an actual or potential benefit or detriment (other than one which 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. (c) The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director: (1) Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter (or by any person that 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 79-4-7.44, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.”

• Miss. Code § 79-4-8.60 — Official final act, accessed September 4, 2026: “79-4-8.60. In Sections 79-4-8.60 through 79-4-8.63 and Section 79-4-8.70: (1) "Director's conflicting interest transaction" means a transaction effected or proposed to be effected by the corporation (or by an entity controlled by the corporation): (i) To which, at the relevant time, the director is a party; or (ii) Respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or (iii) Respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest. (2) "Control" (including the term "controlled by") means (i) 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 (ii) 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. (3) "Relevant time" means (i) the time at which directors' actions respecting the transaction are taken in compliance with Section 79-4-8.62, or (ii) if the transaction is not brought before the board of directors of the corporation (or its committee) for action under Section 79-4-8.62, at the time the corporation (or an entity controlled by the corporation) becomes legally obligated to consummate the transaction. (4) "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. (5) "Related person" means: (i) The director's spouse; (ii) A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsiblings, half-siblings, aunt, uncle, niece or nephew (or spouse of any thereof) of the director or of the director's spouse; (iii) An individual living in the same home as the director; (iv) An entity (other than the corporation or an entity controlled by the corporation) controlled by the director or any person specified in this paragraph (5); (v) A domestic or foreign (A) business or nonprofit corporation (other than the corporation or an entity controlled by the corporation) of which the director is a director, (B) unincorporated entity of which the director is a general partner or a member of the governing body, or (C) individual, trust or estate for whom or of which the director is a trustee, guardian, personal representative or like fiduciary; or (vi) A person that is, or an entity that is controlled by, an employer of the director. (6) "Fair to the corporation" means, for purposes of Section 79-4-8.61(b)(3), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was (i) fair in terms of the director's dealings with the corporation, and (ii) comparable to what might have been obtainable in an arms' length transaction, given the consideration paid or received by the corporation. (7) "Required disclosure" means disclosure of (i) the existence and nature of the director's conflicting interest, and (ii) all facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.”

• Miss. Code § 79-4-8.61 — Official final act, accessed September 4, 2026: “79-4-8.61. (a) A transaction effected or proposed to be effected by the corporation or by an * * * entity controlled by the 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 respecting the transaction, if it is not a director's conflicting interest transaction. (b) 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 respecting the transaction, if: (1) Directors' action respecting the transaction was * * * taken in compliance with Section 79-4-8.62 at any time; or (2) Shareholders' action respecting the transaction was * * * taken in compliance with Section 79-4-8.63 at any time; or (3) The transaction, judged according to the circumstances at the relevant time * * *, is established to have been fair to the corporation.”

• Miss. Code § 79-4-8.62 — Official final act, accessed September 4, 2026: “79-4-8.62. (a) Directors' action respecting a director's conflicting interest transaction is effective for purposes of Section 79-4-8.61(b)(1) if the transaction has been authorized by the affirmative vote of a majority (but no fewer than two (2)) of the qualified directors * * * who voted on the transaction, after * * * required disclosure by the conflicted director of information * * * not already known by such qualified directors or after modified disclosure in compliance with subsection (b), provided that: * * * (1) * * * The qualified directors have deliberated and voted outside the presence of and without the participation by any other director; and (2) Where the action has been taken by a committee, all members of the committee were qualified directors, and either (i) the committee was composed of all the qualified directors on the board of directors, or (ii) the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board. (b) Notwithstanding subsection (a), when a transaction is a director's conflicting interesttransaction only because a related person described in Section 79-4-8.60(5)(v) or (vi) is a party to or has 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, provided that the conflicted director discloses to the qualified directors voting on the transaction: (1) All information required to be disclosed that is not so violative; (2) The existence and nature of the director's conflicting interest * * *; and (3) The nature of the conflicted director's duty not to disclose the confidential information. (c) A majority (but no fewer than two (2)) of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this section. * * * (d) Where 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 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.”

• Miss. Code § 79-4-8.63 — Official final act, accessed September 4, 2026: “79-4-8.63. (a) Shareholders' action respecting a director's conflicting interest transaction is effective for purposes of Section 79-4-8.61(b)(2) if a majority of the votes * * * cast by the holders of all qualified shares are in favor of the transaction after (1) notice to shareholders describing the action to be taken respecting the transaction, (2) provision to the corporation of the information referred to in subsection (b), and (3) 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. (b) A director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary 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 (c), and the identity of the holders of those shares. (c) For purposes of this section, (1) "holder" means, and "held by" refers to shares held by, both a record shareholder (as defined in Section 79-4-13.01(7)) and a beneficial shareholder (as defined in Section 79-4-13.01(2)); and (2) "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 tabulate votes) either knows, or under subsection (b) is notified, are held by (A) a director who has a conflicting interest respecting the transaction, or (B) a related person of the director (excluding a person described in Section 79-4-8.60(5)(vi)). (d) 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 the provisions of subsection * * * (e), shareholders' action that otherwise complies with this section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares. * * * (e) If a shareholders' vote does not comply with subsection (a) solely because of a * * * director's failure to comply with subsection (b), 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 respecting the transaction and the director, and may give such effect, if any, to the shareholders' vote, as the court considers appropriate in the circumstances. (f) Where 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 shares that are not qualified shares may participate.”

• Miss. Code § 79-4-8.21 — Official final act, accessed September 4, 2026: “79-4-8.21. (a) * * * Action required or permitted by Section 79-4-1.01 et seq. to be taken by the board of directors may be taken without a meeting if * * * each director signs a consent describing the action taken and delivers it to the corporation. (b) Action taken under this section is the act of the 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 thereunder is to be effective. A consent may be withdrawn by a revocation signed by the director and received by the corporation prior to receipt by the corporation of unrevoked written consents signed by all the directors. (c) A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.”

• Miss. Code § 79-4-8.70 — Official final act, accessed September 4, 2026: “79-4-8.70. Business opportunities. (a) A director's taking advantage, directly or indirectly, of a business opportunity may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, 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 before becoming legally obligated respecting the opportunity the director brings it to the attention of the corporation and: (1) Action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in Section 79-4-8.62, as if the decision being made concerned a director's conflicting interest transaction; or (2) Shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in Section 79-4-8.63, as if the decision being made concerned a director's conflicting interest transaction; except that, rather than making "required disclosure" as defined in Section 79-4-8.60, in each case the director shall 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. (b) In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of a business opportunity by a director, the fact that the director did not employ the procedure described in subsection (a) before taking advantage of the opportunity shall 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.”

• Miss. Code § 79-4-16.01 — Official final act, accessed September 4, 2026: “79-4-16.01. (a) 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. (b) A corporation shall maintain appropriate accounting records. (c) 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. (d) 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.”