48-235-101 - Special provisions. - Tennessee Statutes

48-235-101. Special provisions.

(a)  Acceptance of Contributions.  Except as provided in the articles or operating agreement, no purported contribution must be treated as a contribution, unless:

     (1)  The board of governors in a board-managed LLC or members accept the contribution on behalf of the LLC and in that acceptance describe the contribution, if any, and state the value being accorded to the contribution; and

     (2)  The fact of contribution and the contribution's accorded value are both reflected in the required records of the LLC.

(b)  Valuation.  The determinations of the board of governors in a board-managed LLC or members as to the amount or fair value or the fairness to the LLC of the contribution accepted or to be accepted by the LLC or the terms of payment or performance, including under a contribution agreement in § 48-233-101, and a contribution allowance agreement in § 48-234-101, are valid and binding if they are made in good faith and on the basis of accounting methods, or a fair valuation or other method, reasonable in the circumstances.

(c)  Terms of Membership Interests.  All the membership interests of an LLC must:

     (1)  Be of one (1) class, without series, unless the articles or operating agreement establish, or authorize the establishment of more than one (1) class or series within classes; and

     (2)  Share profits and losses as provided in § 48-220-101, and be entitled to distributions as provided in §§ 48-236-101, 48-236-102 and 48-245-1101(a)(3).

(d)  Procedure for Fixing Terms.  Subject to any restrictions in the articles or operating agreement, the power granted in § 48-232-101(b) may be exercised by a resolution or resolutions establishing a class or series, setting forth the designation of the class or series, and fixing the relative rights and preferences of the class or series. Any of the rights and preferences of a class or series may:

     (1)  Be made dependent upon facts ascertainable outside the articles or operating agreement, or outside the resolution or resolutions establishing the class or series, if the manner in which the facts operate upon the rights and preferences of the class or series is clearly and expressly set forth in the articles, operating agreement or in the resolution or resolutions establishing the class or series; and

     (2)  Incorporate by reference some or all of the terms of any agreements, contracts, or other arrangements entered into by the LLC in connection with the establishment of the class or series if the LLC retains at its principal executive office a copy of the agreements, contracts, or other arrangements or the portions incorporated by reference.

(e)  Specific Terms.  Without limiting the authority granted in this section, an LLC may have membership interests of a class or series:

     (1)  Subject to the right of the LLC to redeem any of those membership interests at the price fixed for their redemption by the articles or operating agreement or by the board of governors;

     (2)  Entitling the members to cumulative, partially cumulative, or noncumulative distributions;

     (3)  Having preference over any class or series of membership interests for the payment of distributions of any or all kinds;

     (4)  Convertible into membership interests of any other class or any series of the same or another class; or

     (5)  Having full, partial or limited voting rights.

[Acts 1994, ch. 868, § 1; 1995, ch. 403, § 48; 1999, ch. 455, §§ 18, 19.]