Corporate Interested-Director Transaction Requirements in Missouri

At a glance

Requirements one by one

Covered contracts, people, and interests

Mo. Rev. Stat. § 351.020 places ordinary for-profit corporations in Chapter 351. Mo. Rev. Stat. § 351.327.1 reaches a contract or transaction between the corporation and one or more of its directors or officers. It also reaches a contract or transaction with another corporation, partnership, association, or other organization where one or more of the corporation's directors or officers serve as directors or officers or have a financial interest.

The section does not define financial interest, materiality, disinterested status, control, independence, or a related-person category. Common office in the other organization is an express trigger; the text does not require that common-service branch also to carry a separately stated material-financial- interest finding.

Disclosure and the disinterested-board route

For the board or committee route, Mo. Rev. Stat. § 351.327.1(1) requires the material facts about both the relationship or interest and the contract or transaction to be disclosed to or known by the decision-making body. The body must authorize the transaction in good faith through the affirmative votes of a majority of disinterested directors.

Those disinterested directors may be fewer than an ordinary quorum. Under Mo. Rev. Stat. §§ 351.325 and 351.327.2, the meeting still uses the majority-of- the-full-board quorum baseline unless the articles or bylaws require more, but common or interested directors may count toward quorum. Section 351.327 states no minimum of two disinterested voters, special committee-selection rule, or qualified-only deliberation condition.

Shareholder approval and unanimous consent

Mo. Rev. Stat. § 351.327.1(2) requires disclosure to or knowledge by the shareholders entitled to vote and their specific good-faith approval. It does not exclude shares held by an interested director, officer, or related organization from this conflict vote.

Mo. Rev. Stat. § 351.265.1-.2 supplies the ordinary meeting rule: a majority of outstanding entitled shares, represented in person or by proxy, forms quorum, and a majority of the entitled shares represented acts unless Chapter 351, the articles, or bylaws require more. For action without a meeting, Mo. Rev. Stat. § 351.273 requires every shareholder entitled to vote to sign written consent; the secretary files the consents with the minutes. The conflict section does not create a lower nonunanimous-consent route.

Fairness uses the authorization or approval time

Mo. Rev. Stat. § 351.327.1(3) supplies the third alternative: the contract or transaction is fair to the corporation as of the time the board, committee, or shareholders authorize or approve it. The section states no fairness factors, arm's-length comparison test, or burden allocation. Its separate intent clause uses the phrase "regularized to become an arms length transaction," but does not turn a bare recital or vote into a factual fairness conclusion.

Participation, counted votes, and board consent

Section 351.327.1 makes the director's or officer's presence, participation, or counted vote one of the reasons that cannot alone void the contract when a statutory route applies. Section 351.327.2 separately lets common or interested directors count toward the meeting's quorum. The board route still requires its affirmative majority from disinterested directors.

Mo. Rev. Stat. § 351.340.2 requires every board or committee member to consent in writing or by electronic transmission for action without a meeting. The conflict section states no special written-abstention procedure for an interested member. The secretary must file those consents with the board or committee minutes in the same paper or electronic form used for the minutes.

Officers and director compensation are express special branches

Missouri expressly covers officers as well as directors. It does not limit the other-party branch to corporations: partnerships, associations, and other organizations are also named when a covered person serves or holds a financial interest there.

Mo. Rev. Stat. §§ 351.310 and 351.327.3 create a specific compensation rule. Unless the articles or bylaws provide otherwise, the board may set director compensation for services in any capacity and that act is not deemed a conflict of interest. Section 351.327 states no separate controlling-stockholder, going- private, loan, business-opportunity, or public-company procedure.

The statutory effect and record boundary are narrow

Mo. Rev. Stat. § 351.327.1 prevents a contract or transaction from being void or voidable solely because of the listed interest, relationship, presence, participation, or vote when one of its conditions is met. Subsection 4 also states an intent to prescribe methods by which a conflict transaction may be regularized as an arm's-length transaction. Neither sentence says that the procedure independently proves every authorization, duty, securities, enforcement, or remedy question.

Mo. Rev. Stat. § 351.215.1 requires correct and complete shareholder and board minutes. Sections 351.273 and 351.340.2 place shareholder, board, and committee consents with the applicable minutes. A record of the procedure does not itself decide whether a person is disinterested, disclosure is complete, approval is in good faith, or a transaction is fair.

What trips people up

The disinterested-vote and quorum counts are different. Mo. Rev. Stat. § 351.327 requires a majority of disinterested directors to authorize through the board route, but those directors may be fewer than quorum and common or interested directors may be counted to establish quorum. A majority of the people in the room is not necessarily the required conflict-approval majority.

Common questions

Does Missouri's conflict section cover corporate officers?

Yes. Mo. Rev. Stat. § 351.327.1 repeatedly names both directors and officers, including common service or a financial interest in the other organization.

Does the statute expressly authorize later ratification?

Section 351.327 uses "authorizes" for board or committee action and "specifically approved" for shareholder action; it does not state a separate ratification procedure or deadline. Whether a completed transaction can be approved with a particular legal effect therefore cannot be answered from this section alone.

May one disinterested director supply the approving vote?

Section 351.327 does not state a two-director floor. Whether one affirmative vote is a majority of all disinterested directors depends on the actual group, while the meeting must separately satisfy quorum using the interested-director count permitted by subsection 2 and the governing documents.

Statutes and sources

• Mo. Rev. Stat. §§ 351.020 and 351.215.1 — ordinary for-profit scope and corporate minutes. Official § 351.020 and official § 351.215, accessed September 4, 2026.
• Mo. Rev. Stat. §§ 351.265.1-.2 and 351.273 — ordinary shareholder quorum, vote, and unanimous consent. Official § 351.265 and official § 351.273, accessed September 4, 2026.
• Mo. Rev. Stat. §§ 351.310 and 351.325 — board authority, compensation, ordinary quorum, and vote. Official § 351.310 and official § 351.325, accessed September 4, 2026.
• Mo. Rev. Stat. § 351.327 — covered conflicts, disclosure, approval, fairness, participation, quorum, compensation, and statutory effect. Official Missouri Revisor text, accessed September 4, 2026.
• Mo. Rev. Stat. § 351.340.2 — unanimous board and committee consent and filing with minutes. Official Missouri Revisor text, accessed September 4, 2026.