Shareholders hold ownership in a corporation. Shareholders exist whether it's a closely held corporation, LLC, or another business entity. Their collective ownership implies certain rights and privileges to include:

Participation in major business decisions
Access to corporate information
A share of corporate assets
Being a shareholder comes with specific duties, responsibilities, and rights. Shareholders have a range of rights, which include:

Ownership in a portion of the company
Ownership transfer rights
Voting rights
Entitlement to dividends
One of the most significant shareholder rights is the right to sue an officer or a director who has harmed the corporation. This type of business litigation is a shareholder derivative action or lawsuit.

A shareholder derivative lawsuit allows individual shareholders to take legal action on behalf of the company. It is also known as a "derivative claim." Minority shareholders often file these claims. This legal action is typically used when a breach of duty, self-dealing, or other actions harm the company.

Shareholders often file derivative suits to resolve conflicts with officers, directors, or board members who harm the corporation. For example, a Wendy's shareholder sued its directors and officers in 2016 over security practices that led to a data breach.