48-101-613 - When professional corporation must acquire the shares of its stockholder. - Tennessee Statutes

48-101-613. When professional corporation must acquire the shares of its stockholder.

(a)  A professional corporation must acquire (or cause to be acquired by a qualified person) the shares of its shareholder, at a price the corporation believes represents their fair value as of the date of death, disqualification, transfer, retirement or termination of employment, if:

     (1)  The shareholder dies;

     (2)  The shareholder becomes a disqualified person, except as provided in subsection (c);

     (3)  The shares are transferred by operation of law or court judgment to a disqualified person, except as provided in subsection (c); or

     (4)  The shareholder retires, withdraws from or terminates employment with the professional corporation.

(b)  If a price for the shares is fixed in accordance with the charter or bylaws or by private agreement, that price controls. If the price is not so fixed, the corporation shall acquire the shares in accordance with § 48-101-614. If the disqualified person rejects the corporation's purchase offer, either the person or the corporation may commence a proceeding under § 48-101-615 to determine the fair value of the shares.

(c)  This section does not require the acquisition of shares in the event of disqualification if the disqualification lasts no more than five (5) months from the date the disqualification or transfer occurs.

(d)  This section and § 48-101-614 do not prevent or relieve a professional corporation from paying pension benefits or other deferred compensation for services rendered to a former shareholder if otherwise permitted by law.

(e)  A provision for the acquisition of shares contained in a professional corporation's charter or bylaws, or in a private agreement, is specifically enforceable.

[Acts 1992, ch. 698, § 1; T.C.A., § 48-3-613.]