Before shareholders can bring a derivative suit,they must submit a written demand to the corporation,asking the board of directors to take action.

Question

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This is true under corporate law. Before filing a derivative lawsuit, shareholders must make a demand to the board of directors to take action on behalf of the corporation. If the corporation does not resolve the issue, then shareholders can bring a lawsuit in the name of the corporation.

Before Shareholders Can Bring a Derivative Suit,they Must Submit a Written