Corporate Interested-Director Transaction Requirements in Wyoming

At a glance

Requirements one by one

Governing law, transaction, and director scope

Wyo. Stat. § 17-16-860 covers a transaction effected or proposed by the corporation or an entity it controls. At the relevant time, the director is a party, knowingly has a material financial interest, or knows a related person is a party or has such an interest.

Control includes direct or indirect majority governing-body election or removal power and a separate majority-risk-or-residual-returns test. The subarticle does not create a general officer-conflict route.

Interest, related persons, and qualified directors

A material financial interest is one reasonably expected to impair the director's objectivity when participating in authorization. Related persons include the detailed family and household list, controlled entities, other- entity director or governing-body roles, specified fiduciary roles, and the director's employer or an entity it controls.

Wyo. Stat. § 17-16-143 defines a qualified director for this transaction as one who neither has the conflict nor a material relationship with a conflicted director. Nomination by an unqualified director and common service on another corporation's board do not automatically defeat qualification.

Required and modified disclosure

Required disclosure includes the conflict's existence and nature plus every known transaction fact that a conflict-free director would reasonably see as material to deciding whether to proceed.

The modified route in § 17-16-862(b) applies only to the specified related- person entity, director, governing-body, fiduciary, or employer tie and a legal, enforceable confidentiality, or professional-ethics duty. The director gives all nonviolative required information, discloses the conflict's existence and nature, and explains the nondisclosure duty. Unlike some otherwise similar codes, Wyoming's shareholder provision expressly permits this modified disclosure for the qualifying transaction type.

Qualified-director action and separate authorization

The transaction needs an affirmative majority, never fewer than two, of the qualified directors who vote. They must deliberate and vote outside every other director's presence and without that person's participation.

An acting committee must consist entirely of qualified directors and either include all qualified directors on the board or members appointed by their affirmative majority. A majority—but never fewer than two—forms the special quorum. The subarticle adds no good-faith or negligence recital.

This special vote is not necessarily independent authorization. If the articles, bylaws, or law impose another quorum or voting rule, § 17-16-862(d) requires separate board or committee action in which nonqualified directors may participate.

Qualified-share action and written holder information

Wyo. Stat. § 17-16-863 requires a majority of votes cast by qualified shares after notice describing the action, the written share-identification statement, and required or permitted modified disclosure to the extent not already known. Before the vote, the director must tell the secretary or tabulator in writing the number and holder identity of every share known to be unqualified.

Qualified shares exclude known or reported record and beneficial shares held by the conflicted director or most related persons. A majority of votes entitled from all qualified shares forms quorum. Unqualified holders' presence and votes do not disturb an otherwise compliant conflict vote, but they may participate in a separate authorization vote required by governing documents or other law.

Fairness includes “at least not harmful”

The third route requires the transaction to be established fair at the relevant time. Wyoming defines that as beneficial to or at least not harmful to the corporation, appropriately considering fair director dealings and whether the consideration was comparable to an arm's-length transaction.

Relevant time is the § 17-16-862 action or, if the transaction never goes to the board or committee, when the corporation or controlled entity becomes legally obligated to close. Wyo. Stat. § 17-16-831(c)(i) preserves the otherwise applicable burden of proving fairness or its absence rather than reallocating it.

Participation, written consent, compensation, and records

Nonqualified directors cannot attend or participate in the special deliberation and vote but may participate in separate authorization. Wyo. Stat. § 17-16-821 generally permits board action without a meeting through the requisite number of signed or electronically transmitted consents and requires notice within ten days to nonconsenting or nonvoting directors after nonunanimous action. The conflict subarticle gives no consent shortcut around its special procedure.

Shareholder action without a meeting has an all-entitled-holder default and an articles-authorized meeting-threshold route under § 17-16-704. Wyo. Stat. § 17-16-1601 requires permanent meeting, no-meeting, and committee-action records, including permitted electronic or distributed records convertible to writing.

Wyo. Stat. § 17-16-811 separately lets the board fix director compensation unless the articles or bylaws provide otherwise, without a conflict-specific presumption or exclusion.

Business opportunity and statutory effect

Wyo. Stat. § 17-16-870 allows an advance corporate-opportunity disclaimer using the qualified-director or qualified-share procedure after disclosure of all known material opportunity facts. Not using the procedure creates no adverse inference and does not change the otherwise applicable burden.

For an ordinary conflicting transaction, compliant director action, compliant shareholder action, or established fairness bars equitable relief, damages, or other relief against the director on the ground of the director's interest. A nonconflicting transaction receives parallel interest-ground protection. Neither rule establishes independent authorization, enforceability, fiduciary compliance, or securities-law compliance.

What trips people up

The special vote and authorization are separate. Qualified directors or shares can satisfy the conflict procedure while another vote remains necessary under the articles, bylaws, or law; nonqualified participants may join that separate action.

Wyoming's fairness definition is broader than “beneficial.” The statute expressly includes a transaction that is at least not harmful, while still requiring consideration of director dealings and arm's-length comparability.

Qualified-share voting has two denominators. Approval is a majority of qualified votes cast; quorum is a majority of all votes entitled from qualified shares.

Common questions

Can exactly two qualified directors act?

Yes, if they satisfy the majority vote, special quorum, disclosure, deliberation, and committee-composition rules. The statutory floor is two.

Can the conflicted director attend the special deliberation?

No. The qualified directors must deliberate and vote outside every other director's presence and without that director's participation.

Does the conflict vote authorize the transaction by itself?

Not necessarily. Separate action is required when the articles, bylaws, or law impose another authorization quorum or vote.

Statutes and sources

• Wyo. Stat. § 17-16-143 — qualified director, material interest, and material relationship.
• Wyo. Stat. §§ 17-16-860 to -863 — definitions, three protection routes, disclosure, qualified director and shareholder procedure, fairness, and separate authorization.
• Wyo. Stat. § 17-16-870 — business-opportunity disclaimer and effect.
• Wyo. Stat. §§ 17-16-704, -811, -821, -831, and -1601 — shareholder and board written action, compensation, fairness-burden savings, and records.

All are in the official Wyoming Statutes Title 17 PDF, accessed September 4, 2026.