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 that may properly be asserted by it, the complaint must be verified and must allege that the plaintiff was a shareholder or member at the time of the transaction of which the plaintiff complains, or that the plaintiff’s share or membership thereafter devolved on the plaintiff by operation of law. The complaint must also allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and, if necessary, from the shareholders or members, and the reasons for the plaintiff’s 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 may not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise must be given to shareholders or members in such manner as the court directs.
Rule 23.1.Derivative actions by shareholders
Group IV: Parties · Last amended March 1, 2019 · Last verified July 14, 2026
In one sentenceRule 23.1 sets the pleading requirements for a shareholder or member who sues on behalf of a corporation or unincorporated association to enforce a right the entity itself has failed to pursue.
Full Text of Rule 23.1
Notes
Drafter’s Note, Amendment Effective January 1, 2005: The amendments are technical.
Amendment History
Added eff. 9-27-71; Amended eff. 1-1-05; Amended eff. 3-1-19.
Plain-English Summary
Sometimes a corporation or an unincorporated association has a valid legal claim but its own leadership will not pursue it. Rule 23.1 lets a shareholder or member step in and bring that claim on the entity's behalf, in what is commonly called a derivative action. Because the shareholder or member is suing for someone else's benefit, the rule imposes extra pleading requirements beyond an ordinary complaint. The complaint must be verified, meaning it is sworn to be accurate, and it must show the plaintiff held an ownership or membership stake at the time of the events being complained about, or that the plaintiff inherited that stake afterward by operation of law.
The complaint also has to describe, with real specificity, what the plaintiff did to try to get the corporation's directors, or the comparable governing body of an association, to pursue the claim themselves, and if that did not work, what effort was made toward the shareholders or members as a group. If no such effort was made, the plaintiff has to explain why not. Beyond the pleading stage, the rule protects the interests of everyone else who holds a stake in the entity: a derivative action cannot go forward if the plaintiff would not adequately represent similarly situated shareholders or members, and like a class action, it cannot be dismissed or settled without court approval and notice to the shareholders or members affected.
Frequently Asked Questions
What is a derivative action?
It is a lawsuit brought by a shareholder or member on behalf of a corporation or unincorporated association, to enforce a right that belongs to the entity itself but that the entity's own leadership has failed to pursue.
Why does the complaint in a derivative action have to be verified?
Because the plaintiff is suing on behalf of the entity and its other owners rather than purely for themselves, the rule requires the complaint to be sworn as accurate, adding a layer of accountability given who else the litigation affects.
What must a shareholder show about their ownership before filing a derivative suit?
The complaint must allege that the plaintiff was a shareholder or member at the time of the transaction being challenged, or that the plaintiff's ownership interest passed to them afterward by operation of law, such as through inheritance.
Does a shareholder have to ask the company's directors to act before suing?
The complaint must describe with particularity whatever efforts the plaintiff made to get the directors, or comparable governing authority, and if necessary the other shareholders or members, to pursue the claim, and explain why those efforts were not made if they were skipped.
Can a derivative lawsuit be settled without anyone else finding out?
No. Like a class action, a derivative action cannot be dismissed or compromised without court approval, and notice of the proposed dismissal or settlement must go out to the shareholders or members.
Source & verification. Rule text, official Advisory Committee
Notes, and amendment history are reproduced verbatim from the Nevada Rules of Civil
Procedure, adopted by the Supreme Court of Nevada. Last verified July 14, 2026.
· Official source
Also known as: shareholder derivative lawsuitderivative action rulesuing on behalf of a corporationdemand on directors before suingverified complaint shareholder suit