Derivative action

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29-3802. Derivative action

A member may maintain a derivative action to enforce a right of a limited liability company if either of the following applies:

1. The member first makes a demand on the other members in a member-managed limited liability company or the managers of a manager-managed limited liability company that requests that the members or managers cause the company to bring an action to enforce the right and ninety days have expired from the date the demand was made, except that the expiration of ninety days is not necessary if any of the following apply:

(a) The member has earlier been notified that the demand has been rejected by the company.

(b) The statute of limitations will expire within the ninety days.

(c) Irreparable injury to the company would result by waiting for the expiration of the ninety-day period.

2. A demand under paragraph 1 of this section would be futile.


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