Disinterested Person.
Ala. Code § 10A-1-1.04
in effect10A-1-1.04. Disinterested Person.
(a) This section shall not apply to Chapters 2A, 3A, 4, and 11. In addition, provisions in a written limited liability company agreement under Chapter 5A, a written partnership agreement under Chapter 8A, and a written limited partnership agreement under Chapter 9A may provide that this section is not applicable.
(b) Except as provided in subsection (a), for purposes of this title, a person is disinterested with respect to the approval of a contract, transaction, or other matter or to the consideration of the disposition of a claim or challenge relating to a contract, transaction, or particular conduct, if the person or the person’s associate:
(1) is not a party to the contract or transaction or materially involved in the conduct that is the subject of the claim or challenge; and
(2) does not have a material financial interest in the outcome of the contract or transaction or the disposition of the claim or challenge.
(c) For purposes of subsection (b), a person is not materially involved in the conduct that is the subject of a claim or challenge and does not have a material financial interest in the outcome of a contract or transaction or the disposition of a claim or challenge solely because:
(1) the person was nominated or elected as a governing person by a person who is:
(A) interested in the contract or transaction; or
(B) alleged to have engaged in the conduct that is the subject of the claim or challenge;
(2) the person receives normal fees or customary compensation, reimbursement for expenses, or benefits as a governing person of the entity;
(3) the person has a direct or indirect equity interest in the entity;
(4) the entity has, or its subsidiaries have, an interest in the contract or transaction or was affected by the alleged conduct;
(5) the person or an associate of the person receives ordinary and reasonable compensation for reviewing, making recommendations regarding, or deciding on the disposition of the claim or challenge; or
(6) in the case of a review by the person of the alleged conduct that is the subject of the claim or challenge:
(A) the person is named as a defendant in the derivative proceeding regarding the matter or as a person who engaged in the alleged conduct; or
(B) the person, acting as a governing person, approved, voted for, or acquiesced in the act being challenged if the act did not result in a material personal or financial benefit to the person and the challenging party fails to allege particular facts that, if true, raise a significant prospect that the governing person would be held liable to the entity or its owners or members as a result of the conduct.
(Act 2009-513, p. 967, §2; Act 2026-495, §1.)
Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabama#10A-1-1.04Fetched: 10/20/2026