A.R.S. § 29-3802: LLC Derivative Lawsuit
Derivative action
Can an Arizona LLC member sue on the company's behalf?
In Arizona, a member of a limited liability company can bring a lawsuit on the company's behalf to enforce a company right if the member first demands that the other members, or the managers in a manager-managed company, have the company bring the action, and ninety days pass. The member does not have to wait the ninety days if the company has already rejected the demand, the statute of limitations will expire within the ninety days, or waiting would cause irreparable injury to the company. A member may also bring the action without making a demand if a demand would be futile.
Full statute text
Official text last checked against azleg.gov:
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:
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.
Drafted by AI from the official text and checked sentence by sentence against azleg.gov. ClearStatute is run by David Bartlett, who is not an attorney. Legal information, not legal advice — consult a licensed attorney for your situation.