# Tex. Business Organizations Code § 1.003: DISINTERESTED PERSON > Texas · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.003 ## Section - **Citation:** Tex. Business Organizations Code § 1.003 - **Heading:** DISINTERESTED PERSON - **Jurisdiction:** Texas - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** TX Code / Code bo / Chapter 1 / Section 1.003 ## Text (a) For purposes of this code, 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. (b) For purposes of Subsection (a), a person is not materially involved in a contract or transaction 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. ## Nearby sections - [Tex. Business Organizations Code § 1.001 § 1.001. PURPOSE.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.001.md) - [Tex. Business Organizations Code § 1.002 § 1.002. DEFINITIONS.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.002.md) - [Tex. Business Organizations Code § 1.003 § 1.003. DISINTERESTED PERSON.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.003.md) - [Tex. Business Organizations Code § 1.004 § 1.004. INDEPENDENT PERSON.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.004.md) - [Tex. Business Organizations Code § 1.005 § 1.005. CONSPICUOUS INFORMATION.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.005.md) - [Tex. Business Organizations Code § 1.006 § 1.006. SYNONYMOUS TERMS.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.006.md) - [Tex. Business Organizations Code § 1.007 § 1.007. SIGNING OF DOCUMENT OR OTHER WRITING.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.007.md) - [Tex. Business Organizations Code § 1.008 § 1.008. SHORT TITLES.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.008.md) - [Tex. Business Organizations Code § 1.009 § 1.009. DOLLARS AS MONETARY UNITS.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.009.md) - [Tex. Business Organizations Code § 1.051 § 1.051. CONSTRUCTION OF CODE.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.051.md) - [Tex. Business Organizations Code § 1.052 § 1.052. REFERENCE IN LAW TO STATUTE REVISED BY CODE.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.052.md) - [Tex. Business Organizations Code § 1.053 § 1.053. APPLICABILITY TO FOREIGN AND INTERSTATE AFFAIRS.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.053.md) - [Tex. Business Organizations Code § 1.054 § 1.054. RESERVATION OF POWER.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.054.md) - [Tex. Business Organizations Code § 1.055 § 1.055. DOCTRINE OF INDEPENDENT LEGAL SIGNIFICANCE.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.055.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TX_Cbo_C1_S1.003. Check the current official text before relying on it. Not legal advice.