Colorado § 7-126-401 Derivative suits

Colorado Statutes

§ 7-126-401 — Derivative suits

Colorado § 7-126-401

Title 07Corporations

Art.Members and Memberships

This text of Colorado § 7-126-401 (Derivative suits) is published on Counsel Stack Legal Research, covering Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Colo. Rev. Stat. § 7-126-401 (2026).

Text

(1)Without affecting the right of a member or director to bring a proceeding against a nonprofit corporation or its officers or directors, a proceeding may be brought in the right of a nonprofit corporation to procure a judgment in its favor by:

(a)Any voting member or voting members having five percent or more of the voting power; or

(b)Any director.

(2)In any such proceeding, each complainant shall be a voting member or director at the time of bringing the proceeding.

(3)A complaint in a proceeding brought in the right of a nonprofit corporation must be verified and allege with particularity the demand made, if any, to obtain action by the directors and either why the complainants could not obtain the action or why they did not make the demand. If a demand for action was

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(1) Without affecting the right of a member or
director to bring a proceeding against a nonprofit corporation or its officers or
directors, a proceeding may be brought in the right of a nonprofit corporation to
procure a judgment in its favor by:

(a) Any voting member or voting members having five percent or more of the
voting power; or

(b) Any director.

(2) In any such proceeding, each complainant shall be a voting member or
director at the time of bringing the proceeding.

(3) A complaint in a proceeding brought in the right of a nonprofit
corporation must be verified and allege with particularity the demand made, if any,
to obtain action by the directors and either why the complainants could not obtain
the action or why they did not make the demand. If a demand for action was made
and the nonprofit corporation's investigation of the demand is in progress when the
proceeding is filed, the court may stay the suit until the investigation is completed.

(4) In any action instituted in the right of a nonprofit corporation by one or
more voting members, the court having jurisdiction over the matter may, at any time
before final judgment, require the plaintiff to give security for the costs and
reasonable expenses that may be directly attributable to and incurred by the
nonprofit corporation in the defense of such action or may be incurred by other
parties named as defendant for which the nonprofit corporation may become
legally liable, but not including fees of attorneys. The amount of such security may
from time to time be increased or decreased, in the discretion of the court, upon
showing that the security provided has or may become inadequate or is excessive. If
the court finds that the action was commenced without reasonable cause, the
nonprofit corporation shall have recourse to such security in such amount as the
court shall determine upon the termination of such action.

(5) No action shall be commenced in this state by a member of a foreign
nonprofit corporation in the right of a foreign nonprofit corporation unless such
action is permitted by the law of the state under which such foreign nonprofit
corporation is incorporated.