Question

Mullin, a director of Royal Corporation, wishes to sell a plot of land to the corporation. She is willing to sell the land for the fair market value but is concerned about a potential conflict of interest as a director dealing directly with her own corporation. Which of the following is (are) the minimum steps necessary for Mullin to not have a conflict of interest as director of Royal corporation?
I. She sells the plot of land to Royal in a fair and reasonable transaction for the corporation at the fair market value
II. She disclosed her ownership in the land to the board of directors and the board approves the transaction.
III. She disclosed her ownership in the land to the shareholders and a majority approves it.

A I
B. I and III.
C. II.
D. I, II, and III.

Answer 1

Answer:

A. is the correct option. I. She sells the plot of land to royal in a fair and reasonable transaction for the corporation at the fair market value.