What Is a Derivative Lawsuit

question 9

Multiple Choice

What is a derivative lawsuit?

• A) an action brought by the board of directors on behalf of the corporation
• B) an action brought by a majority of the board of directors against an individual board member
• C) an action brought by a shareholder or shareholders on behalf of the corporation, when the board of directors does not file the suit
• D) an action brought by shareholders against the corporation
• E) an action brought by the officers against the directors

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Definitions:

Drawer's Account

Refers to the bank account from which a check is drawn or payable.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee's name printed on the document.

Bank Draws

Withdrawals or loans taken from a line of credit or banking account, often utilized to manage cash flow or finance operations.

Forged Checks

Checks that have been illegally altered or created to defraud and deceive, often involving signature forgery.