District Of Columbia § 29-306.31 - Standards of liability for directors.
Full text of District Of Columbia D.C. Code § 29-306.31 — Standards of liability for directors., with citation guidance and answers to common questions.
§ 29-306.31. Standards of liability for directors.
29-306.31A director shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director, unless the party asserting liability in a proceeding establishes that:
None of the following, if interposed as a bar to the proceeding by the director, precludes liability:
Any provision in the articles of incorporation authorized by ;
The protection afforded by for action taken in compliance with or ; or
The protection afforded by ; and
The challenged conduct consisted or was the result of:
Action not in good faith;
A decision:
Which the director did not reasonably believe to be in the best interests of the corporation; or
As to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances;
A lack of objectivity due to the director’s familial, financial, or business relationship with, or a lack of independence due to the director’s domination or control by, another person having a material interest in the challenged conduct:
Which relationship or which domination or control could reasonably be expected to have affected the director’s judgment respecting the challenged conduct in a manner adverse to the corporation; and
After a reasonable expectation to such effect has been established, the director has not established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation; or
A sustained failure of the director to devote attention to ongoing oversight of the activities and affairs of the corporation, or a failure to devote timely attention, by making, or causing to be made, appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefore [therefor]; or
Receipt of a financial benefit to which the director was not entitled or any other breach of the director’s duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.
The party seeking to hold the director liable:
For money damages, shall also have the burden of establishing that:
Harm to the corporation or its shareholders has been suffered; and
The harm suffered was proximately caused by the director’s challenged conduct;
For other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances; or
For other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.
This section shall not:
In any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under , alter the burden of proving the fact or lack of fairness otherwise applicable;
Alters the fact or lack of liability of a director under another section of this chapter, such as the provisions governing the consequences of an unlawful distribution under or a transactional interest under ; or
Affects any rights to which the corporation or a shareholder may be entitled under another law of the District or the United States.
Annotations
Source: official District Of Columbia text · Last verified 2026-08-27
Frequently Asked Questions About District Of Columbia § 29-306.31
What does D.C. Code § 29-306.31 cover?
Section 29-306.31 ("Standards of liability for directors.") is part of the D.C. Code, the codified statutory law of District Of Columbia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite District Of Columbia § 29-306.31?
A common citation format is "D.C. Code § 29-306.31" (District Of Columbia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of District Of Columbia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the District Of Columbia official source linked on this page or consult a licensed District Of Columbia attorney.
How does District Of Columbia § 29-306.31 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in District Of Columbia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in District Of Columbia.