Shareholder Derivative Suit
/ˈʃeərˌhoʊldər dɪˈrɪvɪtɪv suːt/
Definitions
- (n.) A legal action brought by a shareholder on behalf of a corporation against insiders (such as directors or officers) for breach of fiduciary duty.
The shareholder derivative suit alleged that the board members misappropriated corporate funds.
Forms
- shareholder derivative suit
- shareholder derivative suits
Related terms
See also
Commentary
Shareholder derivative suits are procedural devices to enforce corporate rights when the corporation’s management fails to act; they require the plaintiff to demonstrate demand futility or compliance with demand requirements.
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.