Legal Definition and Related Resources of Derivative Action

One which a person may institute to redress a wrong done to another. The term is generally used to denote an action in which the grievance to be redressed has been suffered primarily by a corporation and where normally the corporation should institute the action but where it fails or refuses to act after demand . In such a case a stockholder may institute the action as representing the corporation. See Reed v Norman, 314 P.2d 204, 152 C.A.2d543.

Browse or run a search for Derivative Action in the American Encyclopedia of Law, the Asian Encyclopedia of Law, the European Encyclopedia of Law, the UK Encyclopedia of Law or the Latin American and Spanish Encyclopedia of Law.

Derivative Action in Historical Law

You might be interested in the historical meaning of this term. Browse or search for Derivative Action in Historical Law in the Encyclopedia of Law.

Search for legal acronyms and/or abbreviations containing Derivative Action in the Legal Abbreviations and Acronyms Dictionary.

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Mentioned in these terms

Representative Action.

See also

Stockholder’s Derivative Action in the American legal Encyclopedia
Shareholder’s Derivative Action in the American legal Encyclopedia
A suit brought by a shareholder on behalf of the … (Read more)

English Legal System: Derivative Action

In the context of the English law, A Dictionary of Law provides the following legal concept of Derivative Action : Civil proceedings brought by a minority of company members in their own names seeking a remedy for the company in respect of a wrong done to it. Such proceedings are exceptional; usually an action should be brought by the company (the injured party) in its own name. A derivative action will only be permitted when a serious wrong to the company is involved, which cannot be ratified by an ordinary resolution of company members (e.g. an *ultra vires or illegal act or a case of *fraud on the minority) and the majority of members will not sanction an action in the company’s name.

Compare representative action.

Meaning of Derivative Action

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