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Can A Shareholder Sue An Officer Or Director Of The Corporation?


As a shareholder, you are forced to place a significant amount of trust in the hands of the people who make the day-to-day decisions at the company, including corporate officers and corporate directors. You may be wondering: Can I file a lawsuit if I believe my rights have been violated? The answer is ‘yes’—shareholders have the ability to take legal action against corporate officials. In this article, our West Palm Beach shareholder dispute  lawyers provide an overview of your options for filing a lawsuit against an officer or director of a corporation in Florida.

Lawsuits Against Corporate Officers/Directors: Two Options for Shareholders 

Broadly defined, a shareholder is an individual, corporation, or institution that owns at least one share of company stock. In effect, this means that a shareholder is the “owner” of a corporation. Of course, most shareholders are minority owners—meaning their control of the company that they own is limited. That being said, shareholders can take legal action when their rights have been violated by a corporate officer or corporate director. Here are the two main types of shareholder lawsuits: 

  • A Direct Shareholder Lawsuit: With a direct shareholder lawsuit, the shareholder is taking personal legal action against a corporate officer or director. To do so, they generally need to establish that they suffered some type of unique damage due to the misconduct of corporate insiders. While there are exceptions, direct shareholder lawsuits tend to be more common in smaller firms, with a limited number of total stakeholders. If you have any questions about direct shareholder lawsuits, please contact our West Palm Beach shareholder rights lawyers today.
  • A Shareholder Derivative Lawsuit: A shareholder derivative lawsuit is filed by a shareholder on behalf of the corporation itself. In other words, the shareholder must allege that the corporation suffered unlawful harm as a consequence of the improper action of a corporate officer or corporate director. There are a number of different legal and procedural criteria that you must satisfy before you can file a shareholder derivative claim. If you have any questions about shareholder derivative lawsuits, please contact our Florida shareholder rights attorneys for immediate help. 

It is important to emphasize that you cannot file a successful shareholder lawsuit simply because you disagree when the decisions made by corporate leadership. Corporate officers and corporate directors have considerable discretion to make business decisions. At the same time, they cannot take action that unlawfully harms a shareholder or class of shareholders. If you believe your rights as a shareholder were breached, an experienced attorney can help.

Call Our West Palm Beach, FL Shareholder Dispute Attorneys Today

At Pike & Lustig, LLP, our Florida shareholder rights lawyers are standing by, ready to protect your legal rights. If you are a shareholder and you are considering filing a lawsuit against a corporate officer or director, we can help. With law offices in West Palm Beach, Wellington and Miami, we represent shareholders throughout Southeastern Florida, including in Palm Beach Gardens, Jupiter, Lake Worth, and Royal Palm Beach.

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