TITLE 7

Corporations, Associations, and Partnerships

CHAPTER 7-16

The Rhode Island Limited Liability Company Act

SECTION 7-16-56



   § 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.)