AN ACT RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- RHODE ISLAND BUSINESS CORPORATION ACT -- THE RHODE ISLAND BUSINESS CLIMATE REFORM ACT

This bill, known as the Rhode Island Business Climate Reform Act, modifies the state's Business Corporation Act to regulate how shareholders can file lawsuits on behalf of corporations. It primarily affects corporate shareholders and directors by establishing stricter rules for derivative proceedings, which are legal actions where shareholders sue to protect corporate interests. The bill requires shareholders to make a written demand to the corporation before filing suit, mandates a 90-day waiting period unless immediate harm is shown, and creates a process for independent directors or a court-appointed panel to determine if lawsuits are in the corporation's best interests. Additionally, it allows certain large corporations to set a minimum ownership threshold of up to 5% for shareholders to initiate derivative actions starting in 2026, and limits attorney fee awards in cases that result only in disclosure settlements.