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derivative action :: legal definition


Derivative action - n. a lawsuit brought by a corporation shareholder against the directors, management and/or other shareholders of the corporation, for a failure by management. In effect, the suing shareholder claims to be acting on behalf of the corporation, because the directors and management are failing to exercise their authority for the benefit of the company and all of its shareholders. This type of suit often arises when there is fraud, mismanagement, self-dealing and/or dishonesty which are being ignored by officers and the board of directors of a corporation.

See also: corporation director shareholder stockholder and Related Law Terms ↓


Related Law Terms

corporation :: n. an organization formed with state governmental ... ation public corporation securities
cumulative voting :: n. in corporations, a system of voting by sharehol ... eholders with 1,001 or more shares.
director :: n. a member of the governing board of a corporatio ... lso: board of directors corporation
dividend :: n. a portion of profit, usually based on the numbe ... . See also: corporation shareholder
limited partnership :: n. a special type of partnership which is very com ... mited liability partner partnership
non-profit corporation :: n. an organization incorporated under state laws a ... harity corporation cy pres doctrine
officer :: n. 1) a high-level management official of a corpor ... deputy sheriff or federal marshal.
partnership :: n. a business enterprise entered into for profit w ... partnership partner silent partner
preemptive right :: n. the right of a shareholder in a corporation to ... also: corporation shareholder stock
shareholder :: n. the owner of one or more shares of stock in a c ... : corporation shareholders' meeting
shareholders' agreement :: n. an employment agreement among the shareholders ... re only three or four shareholders.
shareholders' derivative action :: n. a lawsuit by a corporation's shareholders, theo ... gement. See also: derivative action
shareholders' meeting :: n. a meeting, usually annual, of all shareholders ... ctors corporation proxy shareholder
ultra vires :: (uhl-trah veye-rehz) adj. Latin for "beyond powers ... it is issued. See also: corporation
voting trust :: n. a trust which solicits vote proxies of sharehol ... ation proxy shareholder stockholder
will :: n. a written document which leaves the estate of t ... will and testament probate testator

Popular Law Searches

legal definition ministerial act :: n. an act, particularly of a governmental employee ... exercising any individual judgment.
chancery legal definition :: n. a court that can order acts performed. Today ch ... ts in most states. See also: equity
testamentary disposition legal definition :: n. how the terms of a will divide the testator's ( ... named beneficiaries. See also: will
contract of sufferance :: n. a "hold-over" tenancy after a lease has expired ... y tenancy at will unlawful detainer
forthwith legal definition :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
forthwith definition legal :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
what is to wit in a legal contract :: prep. that is to say. Example: "the passengers in ... tty Bumgartner and Sherry Younger."
mirror wills legal definition :: n. the wills of a husband and wife which are ident ... d each names the other as executor.
clean hands doctrine latin :: n. a rule of law that a person coming to court wit ... ices. See also: affirmative defense
sine qua non only relates to contract law :: (see-nay kwah nahn) prep. Latin for "without which ... qua non of the injury to Playmate.

Other Law Terms - D

D.A. :: n. slang for District Attorney. ... n. slang for District Attorney.
d.b.a. :: n. short for "doing business as," when a person or ... that is registered with the state.
D.U.I. :: n. short for driving under the influence of alcoho ... ing under the influence of alcohol.
D.W.I. :: n. 1) short for driving while intoxicated. 2) abbr ... for dying without issue (children).
damages :: n. the amount of money which a plaintiff (the pers ... liquidated damages special damages
dangerous :: adj. unsafe, hazardous, fraught with risk. It can ... eapon's range. See also: negligence
dangerous weapon :: n. any gun, knife, sword, crossbow, slingshot or o ... igence and possibly win a judgment.
date rape :: n. forcible sexual intercourse by a male acquainta ... physical resistance. See also: rape
day in court :: n. popular term for everyone's opportunity to brin ... rt to protest his speeding ticket."
de facto :: adj. Latin for "in fact." Often used in place of " ... ave not been met. See also: de jure
de facto corporation :: n. a company which operates as if it were a corpor ... also: de facto de jure ultra vires
de jure :: adj. Latin for "lawful," as distinguished from de ... also: de facto de jure corporation
de jure corporation :: n. a corporation in good standing under the law, a ... also: de facto corporation de jure
de minimis :: adj. (dee-minnie-miss) Latin for "of minimum impor ... deal, a $10 mistake is de minimis.
de novo :: adj. Latin for "anew," which means starting over, ... n, de novo. See also: trial de novo
deadly weapon :: n. any weapon which can kill. This includes not on ... See also: assault dangerous weapon
dealer :: n. anyone who buys goods or property for the purpo ... ins taxes by buying other property.
death penalty :: n. the sentence of execution for murder and some o ... rder and some other capital crimes.
death row :: n. nickname for that portion of a prison in which ... o: capital punishment death penalty
debenture :: n. a form of bond certificate issued by a corporat ... n shares of stock or general bonds.