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Source LLC Member Duties Complete Business Associations List Matched to this deck.

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A corporation considers a consulting contract with a company owned by one director's sibling. The interested director discloses the relationship and leaves the room before disinterested directors vote.
Which statement best describes how the transaction may be protected from a fiduciary-duty challenge?

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A conflicted transaction is valid only if every customer of the corporation signs a consent. A conflicted transaction is always valid if the interested fiduciary says the price is reasonable. A conflicted transaction is governed solely by criminal law and never by fiduciary duties. Full disclosure followed by approval by disinterested directors or shareholders, or proof that the transaction was fair, can protect a conflicted transaction under many corporation statutes.

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