Part IV: Parties · Last amended November 1, 2007 · Last verified July 13, 2026
In one sentenceRule 23A lets a shareholder or member sue on behalf of a corporation or unincorporated association to enforce a right the entity itself has refused to pursue, but only after pleading standing, prior demand, and the absence of collusion with particularity, and the case can't be dropped or settled without court approval.
(a)The complaint in a derivative action brought by one or more shareholders or members to enforce a right of a corporation or of an unincorporated association shall be verified and shall allege:
(1)the right that the corporation or association could have enforced and did not;
(2)that the plaintiff was a shareholder or member at the time of the transaction complained of or that the plaintiff’s share or membership thereafter devolved to the plaintiff by operation of law;
(3)that the action is not a collusive one to confer jurisdiction on the court that it would not otherwise have;
(4)with particularity, the plaintiff’s efforts, if any, to obtain the desired action; and
(5)the reasons for the failure to obtain the action or for not making the effort.
(b)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.
(c)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.
Amendment History
Renumbered and amended effective November 1, 2007.
Plain-English Summary
A derivative action is an odd creature: the shareholder who signs the complaint isn't suing to recover for a personal injury. The shareholder is stepping into the corporation's shoes to enforce a right the corporation itself could have enforced but hasn't. Rule 23A sets the pleading bar for that unusual posture. The complaint must be verified, and it must allege the underlying right the corporation failed to pursue, that the plaintiff held shares or membership when the disputed transaction happened (or inherited that stake by operation of law), that the suit isn't a collusive device to manufacture jurisdiction the court wouldn't otherwise have, and — with particularity, not generalized assertion — what the plaintiff did to ask the corporation's own management to act, along with why that effort failed or wasn't made.
Two further safeguards run through the rule. First, the plaintiff must and adequately represent the interests of other shareholders or members in the same position; a suit driven by a plaintiff with a conflicting agenda can't proceed as a derivative action. Second, once the case is filed, the plaintiff can't walk away or cut a private deal with the defendants. Dismissal or compromise requires court approval, and other shareholders or members get notice of the proposed terms in whatever manner the court directs — protection against a plaintiff and defendant quietly trading away rights that belong to the entity and, indirectly, to everyone with a stake in it.
Frequently Asked Questions
What is a derivative action under Utah Rule 23A?
It's a lawsuit brought by one or more shareholders or members on behalf of a corporation or unincorporated association, to enforce a right the entity itself could have pursued but didn't.
Do I have to ask the company to sue before I file a derivative action?
Rule 23A requires the complaint to describe, with particularity, the plaintiff's efforts to get the corporation or association to take the desired action, and to explain why those efforts failed or why none were made.
Can I bring a derivative action if I only recently bought my shares?
Generally no. The complaint must allege that the plaintiff was a shareholder or member at the time of the challenged transaction, or that the shares or membership later passed to the plaintiff by operation of law, such as inheritance.
Can the shareholder who filed the suit just settle it privately?
No. Rule 23A requires court approval before a derivative action can be dismissed or compromised, and the court must direct that notice of the proposed dismissal or compromise go out to other shareholders or members.
Why does the complaint have to be verified?
Verification underscores that the plaintiff is vouching for the factual basis of a suit brought on someone else's behalf — the corporation's — rather than for a personal claim.
What stops a shareholder from using a derivative suit to manufacture jurisdiction the court wouldn't otherwise have?
Rule 23A requires the complaint to allege that the action is not a collusive one designed to confer jurisdiction on a court that wouldn't otherwise have it.
Source & verification. Rule text, Advisory Committee Notes, and
amendment history are reproduced verbatim from the Utah Rules of Civil Procedure,
adopted by the Utah Supreme Court. Last verified July 13, 2026. ·
Official source
Also known as:utah derivative actionshareholder derivative suit utahURCP 23AUtah R. Civ. P. 23Asuing on behalf of a corporation utahshareholder demand requirement utah