48-103-202 - Public policy. - Tennessee Statutes

48-103-202. Public policy.

The general assembly hereby finds and declares the following to be the public policy of this state:

     (1)  “Resident domestic corporations,” as defined by this part, represent and affect, through their ongoing business operations, a variety of constituencies including Tennessee shareholders, employees, customers, suppliers, and local communities and their economies whose welfare is vital to this state's interests;

     (2)  In order to promote such welfare, the regulation of the internal affairs of resident domestic corporations as reflected in the laws of the state should allow for the stable long-term growth of resident domestic corporations;

     (3)  Business combinations involving Tennessee's resident domestic corporations can impair local employment conditions and disrupt local commercial activity. These business combinations often prevent shareholders from realizing the full value of their holdings through forced mergers in which long-term investors can be subjected to the compulsory surrender of their shares with only limited rights to dissent. The threat of these business combinations also deprives shareholders of value by encouraging the adoption of short-term business strategies which may not be in the long-term interest of the corporation or this state;

     (4)  Present Tennessee laws facilitate business combinations which left unbalanced could harm the economy of this state by weakening corporate performance and causing unemployment, plant closings, reduced charitable donations, a declining population base, reduced income to fee-supported local government services, a reduced tax base, and reduced income to other businesses;

     (5)  Tennessee has a substantial and legitimate interest in regulating the internal affairs of its resident domestic corporations which have significant business contacts with this state, including regulating business combinations involving its resident domestic corporations which, individually or in the aggregate, employ a large number of citizens of the state, pay significant taxes, and have a substantial economic base in Tennessee; and

     (6)  The general assembly intends this part to balance the substantial and legitimate interests of Tennessee in regulating the internal affairs of its resident domestic corporations as they impact upon the various constituencies and to promote and encourage long-term corporate growth.

[Acts 1988, ch. 500, § 1; T.C.A., § 48-35-202.]