Virginia Code 13.1-672.1: Standing; condition precedent; stay of proceedings
A. A shareholder shall not commence or maintain a derivative proceeding unless the shareholder:
Terms Used In Virginia Code 13.1-672.1
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- delivery: means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with § 13. See Virginia Code 13.1-603
- Derivative proceeding: means a civil suit in the right of a domestic corporation or, to the extent provided in Article 8. See Virginia Code 13.1-603
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Virginia Code 13.1-603
- shareholder: means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner whose entitlement to bring the proceeding under this article is not inconsistent with the voting trust agreement. See Virginia Code 13.1-672.7
- written: means any information in the form of a document. See Virginia Code 13.1-603
1. Was a shareholder of the corporation at the time of the act or omission complained of, became a shareholder through transfer by operation of law from one who was a shareholder at that time, or became a shareholder before public disclosure and without knowledge of the act or omission complained of;
2. Was a shareholder at the time the shareholder made the written demand required by subdivision B 1; and
3. Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.
B. No shareholder may commence a derivative proceeding until:
1. A written demand has been made on the corporation to take suitable action; and
2. Ninety days have expired from the date delivery of the written demand was made on the corporation unless (i) the shareholder has earlier been notified that the demand has been rejected by the corporation or (ii) irreparable injury to the corporation would result by waiting for the expiration of the 90-day period.
C. If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.