(a) Prerequisites. — This rule applies when one or more shareholders or members of a corporation or an unincorporated association bring a derivative action to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of shareholders or members who are similarly situated in enforcing the right of the corporation or association.
Rule 23.1.Derivative actions
Group IV: Parties · Last amended March 1, 2017 · Last verified July 14, 2026
In one sentenceRule 23.1 sets out what a shareholder or member must plead before suing 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
(b) Pleading Requirements. — The complaint must be verified and must:
(1) allege that the plaintiff was a shareholder or member at the time of the transaction complained of, or that the plaintiff’s share or membership later devolved on it by operation of law;
(2) allege that the action is not a collusive one to confer jurisdiction that the court would otherwise lack; and
(3) state with particularity:
(A) any effort by the plaintiff to obtain the desired action from the directors or comparable authority and, if necessary, from the shareholders or members; and
(B) the reasons for not obtaining the action or not making the effort.
(c) Settlement, Dismissal, and Compromise. — A derivative action may be settled, voluntarily dismissed, or compromised only with the court’s approval. Notice of a proposed settlement, voluntary dismissal, or compromise must be given to shareholders or members in the manner that the court orders.
Amendment History
Added February 2, 2017, effective March 1, 2017.
Plain-English Summary
Sometimes a corporation has a valid claim but its own leadership will not bring it — maybe because the people who would have to sue are the same people who caused the harm. Rule 23.1 lets a shareholder or member step in and sue on the entity’s behalf. Because the shareholder is standing in for the corporation rather than suing for a personal injury, the rule demands proof upfront that the suit belongs in court: the complaint must be verified, and it must show the plaintiff held stock or membership when the disputed transaction happened (or inherited that status by operation of law), and that the case is not a collusive attempt to manufacture jurisdiction.
The plaintiff must also describe, in detail, what happened before the lawsuit was filed. That means stating what demand was made on the directors or comparable governing body — and, if needed, on the other shareholders or members — asking them to pursue the claim, and explaining why that demand failed or why making it would have been pointless. Because a derivative suit resolves rights that belong to absent shareholders or members, not just the named plaintiff, the rule also requires court approval before the case can be settled, dismissed, or compromised, along with notice to the class of people the outcome will bind.
Frequently Asked Questions
Who can bring a derivative action under Rule 23.1?
A shareholder or member of a corporation or unincorporated association may sue on the entity’s behalf, but only if the court is satisfied that person will adequately represent the interests of other shareholders or members in the same position, without favoring their own claim over the group's.
Why does the complaint have to be verified?
Verification means the plaintiff swears to the truth of the allegations. Because a derivative suit lets one person assert rights that belong to the corporation and its other owners, the rule requires this extra layer of accountability at the pleading stage.
What does it mean to 'state with particularity' the demand effort?
The plaintiff cannot allege in passing that directors were asked and refused. The complaint must describe the specific effort made to get the corporation’s directors (and, where necessary, its shareholders or members) to pursue the claim, and explain in detail why that effort failed or why it was excused.
Can a shareholder settle a derivative case on their own?
No. Because the recovery belongs to the corporation and affects other shareholders or members, any settlement, voluntary dismissal, or compromise requires court approval, and notice must go out to the class of shareholders or members in whatever form the court directs.
What happens if the plaintiff was not a shareholder when the alleged wrong occurred?
The rule requires the plaintiff to have held shares or membership at the time of the challenged transaction, or to have acquired that interest later by operation of law, such as through inheritance. Without that connection, the derivative action cannot go forward under this rule.
Source & verification. Rule text and amendment history are
reproduced verbatim from the Wyoming Rules of Civil Procedure, adopted by the
Supreme Court of Wyoming. Last verified July 14, 2026. ·
Official source
Also known as: shareholder derivative suitderivative action rulesuing on behalf of a corporationdemand on directors requirementmember derivative lawsuit