Conflicting Interest Transactions

Question 1

What is a conflicting interest transaction (corporation)?

Answer 1

A director/officer or a family member, has a conflict of interest when they are
1. a party to the transaction; OR
2. Has a beneficial financial interest in the transaction of such significance to the director/officer that the interest would reasonably be expected to exert an influence on the director/officer’s judgement if called upon to vote on the transaction.

Question 2

Under what circumstances can an officer/director with a conflict of interest still benefit from the transaction?

Answer 2

1. Disinterested Shareholders approve the conflicting interest transaction;
2. The non-interested members of the board authorize the conflicting interest transaction; OR
3. The transaction, is fair to the corporation.