Shareholders’ Right to Derivative Action

The Companies Act of the Republic of Serbia prescribes a circle of persons who have certain special duties towards the company: due diligence, duty to report transactions and actions in which there is personal interest, duty to avoid conflict of interest, duty to keep business secret and duty to abide by ban on competition.

Certainly, special duties towards the company can be breached; in that case, the company, as well as members of the company, upon fulfillment of the prescribed conditions, are guaranteed judicial protection against the person(s) who breached the special duty. This judicial protection is provided according to the specific rules of company law, i.e. through special, company law actions.

One of them is derivative action, a special form of judicial protection of the company’s rights: it is brought by one or more members of the company in their own name, but on behalf of the company, against a person who breached the special duty towards the company.

The legal scope of this action, its applicability in practice, and its specifics are the subject of the following article by our Associate Marija Vranić.

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