In a derivative action brought by one (1) 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 the plaintiff complains or that the plaintiff's share or membership thereafter devolved on the plaintiff by operation of law. The complaint shall 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 interest 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 February 2024 · Last verified July 8, 2026
In one sentenceRule 23.1 governs lawsuits that a shareholder or member brings on behalf of a corporation or unincorporated association to enforce a right the entity itself has failed to pursue, and it requires the plaintiff to show they tried to get the entity's own leadership to act first.
Full Text of Rule 23.1
Amendment History
Rhode Island does not publish a per-rule amendment history inside the compiled rules text reproduced here. The text above is verified current through the source’s own February 2024 printing; for the underlying adopting orders and any later amendments, see the Rhode Island Judiciary’s compiled rules page.
Plain-English Summary
Rule 23.1 covers derivative actions — lawsuits a shareholder or member brings on behalf of a corporation or unincorporated association to enforce a right that belongs to the entity itself, because the entity’s own leadership has failed to pursue it. Because the plaintiff stands in for the entity, the rule imposes extra pleading requirements beyond an ordinary complaint.
The complaint must be verified, and it must allege that the plaintiff held their shares or membership at the time of the transaction being challenged, or that the shares or membership passed to the plaintiff afterward by operation of law — through inheritance, for instance. The complaint must also describe with particularity what efforts the plaintiff made to get the directors or comparable governing authority, and if necessary the shareholders or members, to take the desired action, and explain why those efforts failed or were not made.
A derivative action cannot go forward if the plaintiff would not adequately represent the interests of other shareholders or members in the same position. And like a class action, a derivative suit cannot be dismissed or compromised without court approval; shareholders or members must be given notice of any proposed dismissal or settlement in the manner the court directs.
Frequently Asked Questions
What is a shareholder derivative action?
It is a lawsuit a shareholder or member brings on behalf of a corporation or unincorporated association to enforce a right that belongs to the entity, filed because the entity's own directors or comparable leadership failed to pursue that right themselves.
Does the plaintiff have to ask the company to act first?
Yes. Rule 23.1 requires the complaint to allege with particularity what efforts the plaintiff made to get the directors, and if necessary the shareholders or members, to take the desired action, and to explain why those efforts failed or were not made.
Can a shareholder settle a derivative suit on their own?
No. As with a class action, the suit cannot be dismissed or compromised without court approval, and shareholders or members must receive notice of the proposed dismissal or settlement.
Source & verification. The rule text is reproduced verbatim from the
official Rhode Island Superior Court Rules of Civil Procedure (R.I. Super. Ct. R. Civ. P. 23.1). Prescribed by the Supreme Court of Rhode Island (R.I. Gen. Laws § 8-6-2). The plain-English summary is original and written by us. Last verified July 8, 2026. ·
Official source
Also known as: shareholder derivative suitderivative action rulesuing on behalf of a corporationshareholder lawsuit against directorsdemand requirement in a derivative suitminority shareholder lawsuit