A derivative suit is brought by a shareholder to enforce a claim that actually belongs to the corporation, not to the shareholder personally. Because the claim belongs to the company, corporate law generally requires the shareholder to first make a written demand on the board asking it to pursue the claim itself. The rule respects the board's normal authority to decide whether litigation is in the company's interest before a shareholder can step into its shoes.

If the board refuses the demand, the shareholder can typically only proceed by showing the refusal itself was unreasonable, often reviewed under the business judgment rule. If the board never gets the chance because the shareholder skips demand entirely, the shareholder must instead plead that demand would have been futile — for example, because a majority of the board could not have independently and disinterestedly considered it. Getting this threshold wrong is one of the most common ways derivative suits are dismissed before ever reaching the merits.

Juricratic treats the demand requirement as a gating branch at the start of a derivative-suit simulation: one track models the case assuming demand is made and refused, another assumes futility is successfully pleaded, and the projected paths diverge sharply from that first fork — reflecting how much of the litigation's early risk lives in this procedural threshold rather than in the underlying misconduct allegations.

Plaintiff's counsel decides at the outset whether to make demand or plead futility, a choice that shapes the entire complaint and the motion-to-dismiss fight that follows. Defense counsel's first move in most derivative suits is to attack whichever path the plaintiff chose — arguing demand was wrongfully refused was reasonable, or that futility was not pleaded with the required particularity.