Explain the disadvantages to a minority shareholder in bringing a derivative action

• Can only be instituted in circumstances in which there is fraud on the minority.
• The minority must discharge the heavy burden of proof i.e. the company is entitled to the remedy sought and that the company cannot itself sue.
• The minority shareholder has no legal right to bring a derivative action.
• The minority must not have participated in the wrongful act complained of
• Legal costs are only recoverable if the action is successful.
• The case may be struck off at the instance of the defendant.

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