Derivative Suit in Commercial Proceeding

The goal of the corporate governance system throughout the world is to ensure the return on investments of those who provide the company with their capital. It allows developing such control mechanisms that encourage managers to act for the benefit of all investors, not just on their own. A derivative suit (or derivative action) is one of such mechanisms that helps to protect corporate rights against abuse of management primarily to the members of the legal entities (or also shareholders). It gives them an opportunity to file a claim in case of the violation of the legal entity's interests, when the legal entity itself does not state the claim and is not expected to state it because the controlling persons themselves do damage and are not interested in their actions being challenged. This paper is devoted to the analysis of the legal regulation of the institution of the derivative suit, the identification of shortcomings that do not allow members of the legal entity to use this mechanism in the most efficient manner, and ways to improve it. In the process of the research the concept of the derivative action and its legal nature were analyzed; the subject-matter, the basis and the prerequisites of the derivative suit were examined; the place of the derivative action in the system of the claim form of protection of rights was determined. Moreover, the subjects of the derivative action and their procedural status were identified, the procedure for forming the list of participants on the derivative suit was considered; the subject of proof of the derivative action was studied; specific features of the court decision on the derivative action were analyzed.