Specifically, there are certain circumstances that will permit a shareholder to sue their own company. For example, a corporate shareholder may sue a corporation when any of its directors or officers violate a fiduciary duty or conduct various other illegal activities like defrauding investors.
A corporate shareholder can sue a corporation’s officers or board of directors either through a direct lawsuit or indirectly through a derivative lawsuit.
Can I sue my own corporation?
You May Be Able to Sue the Business Owner(s) Personally
If a business is an LLC or corporation, except in very rare circumstances, you can’t sue the owners personally for the business’s wrongful conduct.
Shareholders have no right to claim against a director for any loss they believe they may have suffered as a result of breach of duty. … With the permission of the court, shareholders can bring a claim against a director in the name of the company.
Shareholders are angry and sue the CEO on behalf of the corporation. If the shareholders win, the corporation will receive a judgment against the CEO. All shareholders benefit equally from the litigation by recovering damages for the corporation.
Shareholders are permitted to sue the corporation directly only if their own rights have been harmed.
What are reasons to sue a company?
Top Reasons to Sue an Employer
- Illegal Termination. While employment may be terminated at any time in an at-will employment state, there are still ways an employer may illegally terminate an employee. …
- Deducting Pay. …
- Personal Injuries. …
- Employee Discrimination. …
- Sexual and Workplace Harassment. …
- Retaliation. …
Can an officer of a corporation be sued?
For example, if the corporation does not hold annual meetings or follow the corporate bylaws or if the officers do not keep corporate assets separated from their personal assets, officers can be held personally liable for any corporate debts in a lawsuit.
Can you sue a company for mismanagement?
No, employees have no grounds to sue for mismanagement. … Second, even if the employees as a group do own enough of the company to give them a legal basis to sue for mismanagement as owners, the board of directors manages the company on behalf of the owners.