The Essence of a Derivative Action
A derivative action is defined in the Entrepreneurship Code: one or several shareholders have the right to bring an action in their own name and for the benefit of the joint stock company in order to enforce a claim belonging to the company, including against the officials of the company — with a demand for compensation of damage caused to the company by their non-performance of duties, for the transfer of profit received in return for the caused damage, or for the renunciation of the right to receive such profit. The derivative character lies precisely in this: the action is brought by the shareholder, but the claim belongs to the company and is enforced for its benefit. An analogous route is provided for limited liability companies as well: under the relevant article, where a partner brings an action for the benefit of the company, the rules of the derivative action apply. In this way the law protects the interests of the enterprise where the organs of the company themselves avoided or were unable to initiate a dispute against its officials.