Nonprofit Director Conflict Transaction Approval Rules in Mississippi
At a glance
| Governing act and covered transactions | Mississippi Nonprofit Corporation Act; corporation transaction involving a director (§ 79-11-269(1)) |
|---|---|
| Interest and related-person trigger | Direct/indirect director interest; specified material-financial-interest, general-partner, or management roles in another party (§ 79-11-269(1)–(2)) |
| Disclosure and knowledge | Transaction and director-interest material facts disclosed or known to board/committee or voting members (§ 79-11-269(1)(a)–(b)) |
| Board or committee approval | Majority of directors without direct/indirect interest on board/committee; one director alone cannot approve (§ 79-11-269(3)) |
| Member approval and vote | Informed eligible members; majority of countable member votes; interested director and specified controlled-member votes excluded (§ 79-11-269(1)(b), (4)) |
| Fairness route and time | Fairness to corporation is an alternative; § 79-11-269(1)(c) states no particular testing time |
| Interested participation and quorum | Disinterested board majority supplies conflict-action quorum; interested presence/vote does not defeat compliant action; eligible-member majority supplies member quorum (§ 79-11-269(3)–(4)) |
| Burden, effect, and separate authorization | Not voidable by corporation solely for director interest; excluded member votes count under other act sections (§ 79-11-269(1), (4)) |
| Special coverage and later changes | Director-interest transaction rule in the Mississippi Nonprofit Corporation Act (§ 79-11-269(1)) |
Requirements one by one
Interest and disclosure
Section 79-11-269(2) reaches another party entity in which the director has a material financial interest or is a general partner. It also reaches an entity where the director serves as a director, officer, or trustee, if the transaction is or should be considered by the nonprofit's board. The disclosure route requires material facts about both the transaction and the director's interest to be disclosed or known to the board, committee, or members taking that route.
Approval and fairness
Under § 79-11-269(3), the board or committee route requires a majority of its directors without direct or indirect interest, and a single director cannot approve under this section. For the member route, subsection (4) requires a majority of countable member votes. Fairness to the corporation is a separate route under subsection (1)(c); the provision does not set a particular time at which fairness must be measured.
What trips people up
Section 79-11-269(4) excludes the vote of a member who is an interested director and the vote of a member controlled by an entity in which the director has a material financial interest or is a general partner. Those votes do count when determining approval under other sections of the nonprofit act. Thus a conflict vote and any other required transaction vote can have different tallies.
Common questions
Can the board ratify a transaction after it is made?
Yes. Section 79-11-269(1)(a) and (3) expressly allow the board or committee to authorize, approve, or ratify under the disclosure and disinterested-vote conditions.
Does an interested director's presence invalidate the board's conflict vote?
No. Under § 79-11-269(3), presence or a vote by an interested director does not affect an otherwise compliant action under the board route.
Statutes and sources
- Miss. Code § 79-11-269(1)–(4): director interest, disclosure, approval, fairness, and statutory effect. Official legislative reprint of the existing code section, accessed 2026-10-02.
Source links
Every statute quoted above, linked, with the date we checked it.
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