Section 265 | Derivative proceedings

(1)In Scotland, a member of a company may raise proceedings in respect of an act or omission specified in subsection (3) in order to protect the interests of the company and obtain a remedy on its behalf.

(2)A member of a company may raise such proceedings only under subsection (1).

(3)The act or omission referred to in subsection (1) is any actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director of the company.

(4)Proceedings may be raised under subsection (1) against (either or both)—

(a)the director referred to in subsection (3), or

(b)another person.

(5)It is immaterial whether the act or omission in respect of which the proceedings are to be raised or, in the case of continuing proceedings under section 267 or 269, are raised, arose before or after the person seeking to raise or continue them became a member of the company.

(6)This section does not affect—

(a)any right of a member of a company to raise proceedings in respect of an act or omission specified in subsection (3) in order to protect his own interests and obtain a remedy on his own behalf, or

(b)the court's power to make an order under section 996(2)(c) or anything done under such an order.

(7)In this Chapter—

(a)proceedings raised under subsection (1) are referred to as “derivative proceedings”,

(b)the act or omission in respect of which they are raised is referred to as the “cause of action”,

(c)“director” includes a former director,

(d)references to a director include a shadow director, and

(e)references to a member of a company include a person who is not a member but to whom shares in the company have been transferred or transmitted by operation of law.