Question

gussie, a shareholder of nitty, inc., asks the board of directors to sue 10 of its 15 directors who she alleges have looted the corporation over the last 3 years. the board of directors would like not to sue the alleged wrongdoers. what specific procedures should the board follow to ensure that gussie may not successfully prosecute a derivative suit?

Answer 1

A derivative claim is a medium by which a  nonage shareholder in a  pot, or a part in a  defined liability company, can drink  a action on the company's behalf anyhow of whether the company's  operation  plump  the hunt for that claim.

A derivative action is an action against officers or directors ate  by shareholders on behalf of the  pot. That is, the shareholders act as representative complainant for the  pot and sue the officers or directors for their  conduct bringing about  detriment to the  pot. While the  thing of such a action is to halt certain  conduct by the defendants, any damages  mended in the action have a place with the  pot( not the representative complainants). The shareholders  profit in a  circular way as  possessors of the  pot. Shareholders start the derivative action process by making a  supplication to the board of directors to bring a legal action against the alleged miscreant. This is called making demand on the board.

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