Derivative Action
/ˈdɛrɪvətɪv ˈækʃən/
Definitions
- (n.) A lawsuit initiated by a shareholder on behalf of a corporation to enforce rights the corporation has failed to assert.
The shareholder brought a derivative action against the board for breaching their fiduciary duty.
Forms
- derivative actions
Related terms
Commentary
Derivative actions are a critical tool for minority shareholders to address wrongs against the corporation when management fails to act.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.