Section 7-16-56 Right of member to bring derivative action.

RI Gen L § 7-16-56 (2019) (N/A)

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§ 7-16-56. Right of member to bring derivative action. A member may bring an action on behalf of the limited-liability company to recover a judgment in its favor if all of the following conditions are met:

(1) The member does not have the authority to cause the limited-liability company to sue in its own right under the provisions of an operating agreement;

(2) The members or managers with this authority have wrongfully refused to bring the action or, after adequate time to consider the demand, have failed to respond to the demand or if an effort to cause those members or managers to bring the action is not likely to succeed;

(3) The plaintiff:

(i) Is a member of the limited-liability company at the time of bringing the action; and

(ii) Was a member of the limited-liability company at the time of the transaction complained of, or the plaintiff's status as a member of the limited-liability company subsequently devolved to the plaintiff pursuant to the terms of the operating agreement from a person who was a member at that time; and

(4) The plaintiff fairly and adequately represents the interests of the members in enforcing the right of the limited-liability company.

History of Section. (P.L. 1992, ch. 280, § 1.)

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Section 7-16-57 Pleading in derivative action.