Nonprofit Director Conflict Transaction Approval Rules in Oregon

Short answer Oregon § 65.361 protects a director conflict transaction against voidability or director liability if it is fair to the corporation when entered into. Approval under the statute instead creates a presumption of fairness. Public benefit and religious corporations have board, Attorney General, or court routes; mutual benefit corporations have board or member routes.

State

Oregon

Statute checked

October 2, 2026

Sources

1 statute

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At a glance

Governing act and covered transactions	Oregon Nonprofit Corporation Act; corporation transaction with director’s direct/indirect interest (§ 65.361(1))
Interest and related-person trigger	Indirect interest includes material-interest/partner entity, managed entity considered by board, or related person/business associate (§ 65.361(4))
Disclosure and knowledge	Board/committee or mutual-benefit members must know transaction and director-interest facts for their approval route (§ 65.361(2)(a), (3))
Board or committee approval	Public benefit/religious or mutual benefit: majority of uninterested directors on board/committee, at least two (§ 65.361(2)(a), (3)(a), (5))
Member approval and vote	Mutual benefit only; informed members approve by majority of eligible votes; interested-director/related-entity votes may count (§ 65.361(3)(b), (6))
Fairness route and time	Fair at transaction entry independently protects; statutory approval creates presumption of fairness (§ 65.361(1))
Interested participation and quorum	Disinterested-director majority supplies conflict-action quorum; interested presence/vote does not invalidate otherwise approved action (§ 65.361(5))
Burden, effect, and separate authorization	Fair transaction not voidable or liability basis; approval presumes fairness; conflict action does not itself replace other authorization (§ 65.361(1), (5))
Special coverage and later changes	Public benefit/religious may obtain Attorney General or circuit-court approval; articles, bylaws, board resolution may add requirements (§ 65.361(2)(b), (7))

Requirements one by one

Covered interests and effect

Section 65.361(1) covers a corporation transaction in which a director has a direct or indirect interest. Subsection (4) reaches another entity in which the director has a material interest or is a general partner, a managed entity whose transaction is or should be considered by the board, and a related person or business associate who is a party. A transaction fair to the corporation when entered into is not voidable or a basis for imposing director liability under subsection (1). Statutory approval creates a presumption of fairness, rather than stating that approval alone proves fairness conclusively.

Board and member routes

For public benefit and religious corporations, § 65.361(2) allows an informed board or committee vote or approval by the Attorney General or a circuit court with the Attorney General joined. For mutual benefit corporations, subsection (3) allows an informed advance board or committee vote or informed member authorization, approval, or ratification. Under subsection (5), the board route needs a majority of directors without direct or indirect interests and cannot rest on a single director. Under subsection (6), mutual benefit member approval requires a majority of votes entitled to be counted; the votes cast by or controlled by an interested director or an entity described in subsection (4) may be counted.

What trips people up

Under § 65.361(5), a disinterested-director majority voting for the transaction supplies a quorum for this conflict action, and an interested director's presence or vote does not invalidate otherwise approved board action. The section's conflict treatment addresses fairness and interest-based effect; the corporation must still satisfy other authorization rules applicable to the transaction. Articles, bylaws, or a board resolution may add conflict-transaction requirements under subsection (7).

Common questions

Does a member vote work for a public benefit corporation?

Section 65.361(2) gives public benefit and religious corporations board or committee, Attorney General, and circuit-court approval routes. The member route in subsection (3)(b) is for mutual benefit corporations.

At what point does the fairness route measure fairness?

Section 65.361(1) asks whether the transaction was fair to the corporation when it entered into the transaction.

Statutes and sources

Or. Rev. Stat. § 65.361(1)-(7): director conflict definition, approval routes, fairness, votes, and effect. Current official chapter, accessed 2026-10-02.

Source links

Every statute quoted above, linked, with the date we checked it.

Or. Rev. Stat. § 65.361(1)-(7) · accessed 2026-10-02

This page gives general legal information about interested-director transactions in an ordinary domestic nonprofit corporation. It is not legal advice. The statute and governing documents may require separate authorization, and whether an interest, disclosure, vote, or transaction is fair depends on facts. Confirm current official law and seek qualified advice for a particular transaction.

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