A(n) ________ can be brought on behalf of individual shareholders if corporate directors fail to sue when the corporation has been harmed either by an individual, another corporation, or a director.

A) action in harm suit
B) shareholder action suit
C) shareholder's direct suit
D) shareholder's derivative suit
E) active allocation suit

Question

Emily Morris · Accepted Answer

Final Answer : D, Explanation :  A shareholder's derivative suit is a lawsuit brought by a shareholder on behalf of a corporation against a third party, often an insider of the corporation, such as an executive officer or director, when the corporation fails to take action against the wrongdoer. This type of suit allows shareholders to seek justice for wrongs done to the corporation that the corporation itself has not addressed.

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