---
title: O.C.G.A. § 14-2-744. Dismissal.
collection: code
id: 14-2-744
cite_as: O.C.G.A. § 14-2-744 (2025)
canonical_url: https://georgiacommons.org/code/14-2-744
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source_url: https://www.legis.ga.gov/api/document/docs/default-source/joint-features-document-library/t14-(v12)-2017-pdf.pdf?sfvrsn=507372ea_0#page=210
date: 2025
status: active
corpus_version: 2025-supplement-89aa39ab3c68
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version: the only printed version
in_force: true
current_through: Including Acts of the 2025 Regular Session of the General Assembly
heading_path: CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS / BUSINESS CORPORATIONS / SHAREHOLDERS / DERIVATIVE PROCEEDINGS
---

# O.C.G.A. § 14-2-744. Dismissal.

(a) The court may dismiss a derivative proceeding if, on motion by the corporation, the court finds that one of the groups specified in subsection (b) of this Code section has made a determination in good faith after conducting a reasonable investigation upon which its conclusions are based that the maintenance of the derivative suit is not in the best interests of the corporation. The corporation shall have the burden of proving the independence and good faith of the group making the determination and the reasonableness of the investigation.

(b) The determination in subsection (a) of this Code section shall be made by:

(1) A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum;

(2) A majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum; or

(3) A panel of one or more independent persons appointed by the court upon motion by the corporation.

(c) None of the following shall by itself cause a director to be considered not independent for purposes of subsection (b) of this Code section:

(1) The nomination or election of the director by directors who are not independent;

(2) The naming of the director as a defendant in the derivative proceeding; or

(3) The fact that the director approved the action being challenged in the derivative proceeding so long as the director did not receive a personal benefit as a result of the action.

## History

Code 1981, § 14-2-744, enacted by Ga. L. 1988, p. 1070, § 1.

## Law Reviews

For annual survey of law of business associations, see 43 Mercer L. Rev. 85 (1991). For survey article on business associations, see 60 Mercer L. Rev. 35 (2008). For article, ‘‘2013 Georgia Corporation and Business Organization Case Law Developments,’’ see 19 Ga. St. B. J. 28 (April 2014).

For comment, ‘‘Deciding Who Should Decide to Dismiss Derivative Suits,’’ see 39 Emory L.J. 937 (1990).