California Corporations Code

§ 12373

CORP § 12373Div. 3 · Title 1 · Part 2 · Ch. 2 · Art. 3

Statute text

(a)No contract or other transaction between a corporation and one or more of its directors, or between a corporation and any domestic or foreign corporation, firm or association in which one or more of its directors has a material financial interest, is either void or voidable because such director or directors or such other corporation, business corporation, firm or association are parties or because such director or directors are present at the meeting of the board or a committee thereof which authorizes, approves or ratifies the contract or transaction, if:

(1)The material facts as to the transaction and as to such director’s interest are fully disclosed or known to the members and such contract or transaction is approved by the members (Section 12224) in good faith, with any membership owned by any interested director not being entitled to vote thereon;

(2)The material facts as to the transaction and as to such director’s interest are fully disclosed or known to the board or committee, and the board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the corporation at the time it is authorized, approved or ratified; or

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Legislative history

Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.