a Applicability. This rule applies when one or more shareholders, members, or partners—as applicable—of a corporation, limited liability company, limited partnership, or unincorporated association bring a derivative action to enforce a right that the corporation, limited liability company, limited partnership, or unincorporated association may properly assert but has failed to enforce.
Rule 23.1.Derivative actions.
Last verified July 1, 2026
In one sentenceRule 23.1 governs a derivative action brought by a shareholder, member, or partner to enforce a right the underlying entity has failed to pursue itself, requiring a verified complaint that shows the plaintiff’s standing and satisfies the substantive requirements for bringing the claim, and requiring court approval before the action can be settled, dismissed, or compromised.
Full Text of Rule 23.1
b Pleading requirements. The complaint must:
1 be verified;
2 allege facts sufficient to show that the plaintiff has standing to maintain the derivative action; and
3 allege facts sufficient to show that the plaintiff satisfies all statutory and other requirements under the law for maintaining the derivative action.
c Settlement, voluntary dismissal, and compromise. A derivative action may not be settled, voluntarily dismissed, or compromised without court approval. Notice of a proposed settlement, voluntary dismissal, or compromise must be given to shareholders, members, or partners—as applicable—in the manner that the court orders. If the court determines that a proposed settlement, voluntary dismissal, or compromise will substantially affect the interests of the shareholders, members, or partners—or a class of shareholders, members, or partners-the court must order that notice be given to the affected shareholders, members, or partners.
Amendment History
Promulgated by R-16-0010, effective January 1, 2017.
Plain-English Summary
A derivative action lets an owner of a corporation, limited liability company, limited partnership, or unincorporated association step into the entity’s shoes and pursue a claim the entity itself could bring but has not. Rule 23.1 applies whenever one or more shareholders, members, or partners bring that kind of action to enforce a right belonging to the entity.
Because the plaintiff is suing on behalf of an entity rather than in its own right, the complaint carries extra requirements: it must be verified, it must allege facts showing the plaintiff has standing to bring the derivative claim, and it must allege facts showing the plaintiff satisfies whatever other legal requirements apply to maintaining that kind of action.
A derivative action cannot be settled, voluntarily dismissed, or compromised without the court’s approval, and notice of any proposed settlement, dismissal, or compromise must go to the shareholders, members, or partners in whatever manner the court directs. If the court decides the proposal would substantially affect those owners’ interests, or the interests of a class of them, it must order that notice be given.
Frequently Asked Questions
What is a derivative action?
A suit by a shareholder, member, or partner that enforces a right belonging to the underlying entity when the entity itself has failed to pursue it.
What must a derivative action complaint include beyond an ordinary complaint?
Verification, plus facts showing the plaintiff’s standing and satisfaction of the other legal requirements for bringing the derivative claim.
Can a derivative action be settled without court involvement?
No, settlement, voluntary dismissal, or compromise requires court approval and notice to the affected owners.
Source & verification. The rule text and History are reproduced verbatim from the
official Arizona Rules of Civil Procedure (Ariz. R. Civ. P. 23.1). Prescribed by the Supreme Court of Arizona (Ariz. Const. art. 6, § 5). The plain-English summary is original and written by us. Last verified July 1, 2026. ·
Official source
Also known as: derivative actionshareholder derivative suitderivative claim