Arizona Laws 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:
Terms Used In Arizona Laws 29-3802
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Manager-managed limited liability company: means a limited liability company that qualifies under section 29-3407, subsection A. See Arizona Laws 29-3102
- Member: means a person that both:
(a) Has become a member of a limited liability company under section 29-3401 or was a member in a company when the company became subject to this chapter under section 29-3110. See Arizona Laws 29-3102
- Member-managed limited liability company: means a limited liability company that is not a manager-managed limited liability company. See Arizona Laws 29-3102
- Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
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.