A shareholder may not commence or maintain a derivative proceeding unless the shareholder both:

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Terms Used In Arizona Laws 10-741

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Proceeding: includes a civil suit and a criminal, administrative and investigatory action. See Arizona Laws 10-140
  • Shareholder: includes a beneficial owner whose shares are held in a voting trust or are held by a nominee on the beneficial owner's behalf. See Arizona Laws 10-740

1. Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time.

2. Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.