Darius is a shareholder of Energy Renewable,Inc. When the directors fail to undertake an action to redress a wrong suffered by the corporation,Darius files a suit on the firm's behalf.
-Darius's suit is a shareholder's

Question

Quizplus · Accepted Answer

Darius's suit is a derivative suit, which is a lawsuit filed by a shareholder on behalf of a corporation when the directors fail to take action to redress a wrong suffered by the corporation. The purpose of the suit is to enforce the corporation's rights, not the shareholder's personal rights. Shareholder reimbursement suits and preemptive suits are not relevant to the scenario. Business judgment rule suits apply when the directors are accused of breaching their duty of care or loyalty, which is not the case here.

Darius Is a Shareholder of Energy Renewable,Inc