This is an action instituted by a member in his name on behalf of the company to remedy a wrong done to the company.
• It is representative in character.
• Involves the violation of corporate rights. Prudential Assurance Co. Ltd V. Newman Industries Ltd.
• Right to institute a derivative action in a matter of grace.
• It is controlled by the plaintiff.
• There must be a dispute between a member (s) of the company and those in control of its affairs.
• The company must be joined as a co-defendant to enable it enforce its rights EstamcoLtd. V. Greater London Council, Spokes V. The Grosvenor and Another.