When the corporation has the right to sue its directors,officers,or third persons for damages caused by them to the corporation or for breach of contract,one (1)or more shareholders may bring such action if the corporation refuses to do so.This is known as a __________ action.

Question

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A derivative action allows shareholders to bring a lawsuit on behalf of the corporation when the corporation itself refuses to do so. In this scenario, the corporation has the right to sue its directors, officers, or third parties, but if it chooses not to, shareholders can initiate a derivative action to pursue the claim on behalf of the corporation.

When the Corporation Has the Right to Sue Its Directors,officers,or