Corporate Interested-Director Transaction Requirements in Wisconsin

At a glance

Requirements one by one

Covered transaction and indirect-interest scope

Wis. Stat. § 180.0103(5) defines the ordinary domestic corporation as a for-profit corporation incorporated under or subject to Chapter 180. Wis. Stat. § 180.0831(1) defines its conflict transaction as a transaction with the corporation in which one of its directors has a direct or indirect interest.

The indirect-interest examples are nonexclusive. They include another party in which the director has a material financial interest or serves as general partner. They also include another entity where the director is a director, officer, or trustee and the transaction is or, because of its significance to the corporation, should be considered by the board. The section does not define materiality, control, related person, or independence.

Disclosure and noninterested-director approval

Wis. Stat. § 180.0831(2)(a), (4) requires the material facts of the transaction and the director's interest to be disclosed to or known by the board or committee. Authorization, approval, or specific ratification then requires an affirmative majority of that body's directors who have no direct or indirect interest.

That noninterested majority itself establishes the conflict-procedure quorum, displacing the general quorum and vote provisions identified in Wis. Stat. § 180.0824(1), (3). Section 180.0831 states no two-director minimum, good-faith condition, special committee-selection process, or qualified-only deliberation rule.

The shareholder route has a branch-specific exclusion

Under Wis. Stat. § 180.0831(2)(b), (5), shareholders likewise act only after the material transaction and interest facts are disclosed or known. Approval or specific ratification requires a majority of the shares entitled to count, and a majority of all eligible shares—present or not—is the special quorum.

The exclusion covers shares owned by or controlled by the interested director and shares owned by or controlled by an entity in which the director has a material financial interest or is a general partner. Subsection (5) does not expressly name the separate common-director, officer, or trustee entity from subsection (3)(b). Excluded votes still count when determining whether another Chapter 180 provision independently approves the transaction.

For that separate ordinary approval, Wis. Stat. § 180.0725(1), (3) generally uses a majority of the voting group's entitled votes for quorum and requires votes favoring the action to exceed votes opposing it, unless the governing documents or Chapter 180 supplies another rule.

Wis. Stat. § 180.0704(1)-(2) separately provides unanimous shareholder consent and an articles-authorized meeting-equivalent route. A written-consent record still has to apply § 180.0831(5)'s eligible-share count; the general consent statute does not erase the conflict-specific exclusion.

Wisconsin supplies no fairness-only approval route

Wis. Stat. § 180.0831 lists only the board and shareholder routes. It does not make fairness a third route, define fairness, choose a relevant time, or assign a fairness burden.

Wis. Stat. § 180.0828(1)(a) separately makes claimant-proved willful failure to deal fairly in a matter involving a material conflict one exception to the director's statutory monetary-liability protection. That separate liability language is not a fairness-based transaction approval under § 180.0831.

Interested participation and no-meeting action use different mechanics

The interested director's presence or vote does not affect otherwise qualifying board action under Wis. Stat. § 180.0831(4). It also does not supply part of the required noninterested majority.

At a meeting, Wis. Stat. § 180.0824(4) generally treats a present director as assenting unless the director preserves an opening objection, a dissent or abstention in prepared minutes, or one of the specified written notices. For action without a meeting, Wis. Stat. § 180.0821(1)-(3) requires every director to sign written consent and gives that consent the effect of a unanimous vote. The conflict section states no special written-abstention route.

A director loan uses a separate statute

Wis. Stat. § 180.0832 separately governs a director loan or guarantee. It allows a particular loan or guarantee after approval by a majority of represented outstanding voting shares as one voting group, excluding shares owned by or controlled by the benefited director. The alternative is a board determination that the loan or guarantee benefits the corporation plus approval of the specific transaction or a general plan.

A violation does not affect the borrower's liability. The section also excludes specified permitted advances and ordinary-course director-expense advances. Section 180.0831 itself states no general officer, controlling-stockholder, going-private, compensation, business-opportunity, or public-company branch.

Statutory effect, liability, and records remain distinct

Wis. Stat. § 180.0831(2) says only that a transaction using a qualifying route is not voidable by the corporation solely because of the director's interest. It does not declare the transaction universally valid, fair, authorized, enforceable, or free of other claims.

Wis. Stat. § 180.0828 separately identifies the conditions that can overcome a director's protection from specified monetary liabilities, including claimant- proved willful unfair dealing in a material conflict, improper personal profit, a qualifying criminal-law violation, or willful misconduct. Wis. Stat. § 180.1601(1), (4) requires permanent meeting, no-meeting, and committee-action records if they were prepared, maintained in writing or reasonably convertible form. Documentation does not establish the substantive predicates by itself.

What trips people up

Wisconsin's shareholder exclusion does not use one broad phrase for every indirect-interest branch. Wis. Stat. § 180.0831(5) excludes shares of the director and the entity from subsection (3)(a)—the material-financial-interest or general-partner branch—but does not expressly name the common-director, officer, or trustee entity from subsection (3)(b). The exact interest and share ownership record therefore matters.

Common questions

Can fairness alone satisfy § 180.0831?

No fairness-only route appears in the section. Its two routes require disclosed or known material facts plus qualifying board or shareholder action.

May one noninterested director supply the board approval?

Section 180.0831 states no two-director floor. If the group of directors without a direct or indirect interest contains only one director, the text does not itself bar that director from constituting the majority, and it says a majority of that group establishes quorum for the conflict procedure.

Does § 180.0831 independently cover an interested officer?

No. The section defines the conflict through a corporation director. An officer role can matter when that director serves as an officer of the other transaction party and the transaction is or should be considered by the corporation's board, but there is no general officer-conflict route.

Statutes and sources

• Wis. Stat. §§ 180.0103(5), 180.0704, 180.0725, 180.0821, 180.0824, and 180.1601 — entity scope, shareholder and board consent, ordinary quorum and voting, assent records, and corporate records. Official certified Chapter 180 PDF, accessed September 4, 2026.
• Wis. Stat. §§ 180.0828, 180.0831, and 180.0832 — director monetary-liability boundary, conflict transactions, and director loans. Official Wisconsin Legislature text, accessed September 4, 2026.