In a derivative action brought by one or more shareholders or members to enforce a right of a corporation or of an unincorporated association, the corporation or association having failed to enforce a right which may properly be asserted by it, the complaint shall be verified and shall allege that the plaintiff was a shareholder or member at the time of the transaction of which he complains or that his share or membership thereafter devolved on him by operation of law. The complaint shall also allege with particularity the efforts, if any, made by the plaintiff to obtain the action he desires from the directors or comparable authority and, if necessary, from the shareholders or members, and the reasons for his failure to obtain the action or for not making the effort. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association. The action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to shareholders or members in such manner as the court directs.
Rule 23.1.Derivative Actions by Shareholders
Current through June 1, 2026 · Last verified July 10, 2026
In one sentenceRule 23.1 lets a shareholder or member sue on behalf of a corporation or association to enforce a right the entity failed to pursue, but only after a verified complaint describes efforts to get directors or members to act and shows the plaintiff can adequately represent similarly situated owners.
Full Text of Rule 23.1
Amendment History
The source reproduced here (current through June 1, 2026) records no amendment to this rule since its original adoption — no Credits line appears for it in the compiled rules. For the underlying adopting order and any later amendments, see the Colorado General Assembly.
Plain-English Summary
Rule 23.1 governs derivative suits — cases where a shareholder or member sues to enforce a right that belongs to a corporation or unincorporated association, because the entity's own management failed to pursue it. The complaint must be verified, meaning the plaintiff swears to its truth, and must show the plaintiff owned shares or held membership at the time of the events being complained about, or that the shares or membership passed to the plaintiff afterward by operation of law, such as through inheritance.
Because a derivative suit steps into a role that belongs to the entity's own directors or members, the complaint must describe with particularity what the plaintiff did to ask the directors or comparable authority to act, and, if that failed, what was done to ask the shareholders or members themselves, along with the reasons for not making that effort if none was made. A court will not let the case go forward if the plaintiff will not adequately represent the interests of other shareholders or members in the same position. As with a class action, a derivative suit cannot be dismissed or settled without the court's approval, and notice of any proposed dismissal or settlement must go out to the shareholders or members as the court directs.
Frequently Asked Questions
What is a shareholder derivative action?
It is a lawsuit under Rule 23.1 in which a shareholder or member sues on behalf of a corporation or association to enforce a right that the entity's own management failed to pursue.
Do I have to ask the board of directors to act before filing a derivative suit?
Yes. Rule 23.1 requires the complaint to describe with particularity what efforts the plaintiff made to get the directors or comparable authority to act, or explain why no such effort was made.
Can I settle a derivative lawsuit on my own?
No. Rule 23.1 requires court approval before a derivative action can be dismissed or compromised, along with notice to shareholders or members in whatever manner the court directs.
Do I need to have owned stock when the wrongdoing happened to bring a derivative suit?
Generally yes — Rule 23.1 requires the plaintiff to have been a shareholder or member at the time of the transaction complained of, unless the shares or membership passed to the plaintiff afterward by operation of law.
Source & verification. The rule text is reproduced verbatim from the
official Colorado Rules of Civil Procedure (Colo. R. Civ. P. 23.1). Prescribed by the Supreme Court of Colorado (C.R.S. § 13-2-108; Colo. Const. art. VI). The plain-English summary is original and written by us. Last verified July 10, 2026. ·
Official source
Also known as: shareholder derivative suitderivative actionsuing on behalf of a corporationCRCP 23.1demand on the boardmember derivative claim