2010 Tennessee Code
Title 48 - Corporations And Associations
Chapter 249 - Tennessee Revised Limited Liability Company Act
Part 11 - Professional Limited Liability Companies
48-249-1111 - Required purchase of membership interest and financial rights.

48-249-1111. Required purchase of membership interest and financial rights.

(a)  Purchase obligation.  A PLLC shall purchase, or cause to be purchased by a qualified person, the membership interest of any member and the financial rights of any holder of financial rights, at a price that represents the fair value of the membership interest or financial rights as of the date of the occurrence of the event giving rise to the PLLC's purchase obligation under this subsection (a), from the personal representative of the member or holder of financial rights, the member or holder of financial rights or the disqualified person to whom the membership interest or financial rights has or have been transferred, as applicable, in accordance with the provisions of this section, if:

     (1)  The member or holder of financial rights dies;

     (2)  The member or holder of financial rights becomes a disqualified person, except as provided in subsection (c);

     (3)  The membership interest of a member or the financial rights of a holder is or are transferred by operation of law or court judgment to a disqualified person, except as provided in subsection (c); or

     (4)  The member or holder of financial rights retires, withdraws from or terminates employment with the PLLC.

(b)  Purchase terms.  If the amount of fair value and other terms of payment for the membership interest or financial rights are fixed, or are to be determined by the LLC documents or a private agreement, the amount and terms so fixed or determined govern. If the amount of fair value and other terms of payment are not so fixed or determined by the LLC documents or a private agreement, the PLLC shall purchase the membership interest or financial rights in accordance with § 48-249-1112.

(c)  Limited disqualification.  This section does not require the purchase of a membership interest or financial rights in the event a member or holder of financial rights becomes a disqualified person, if the disqualification lasts no more than five (5) months from the date the disqualification occurs.

(d)  Other benefits.  This section and § 48-249-1112 do not prevent or relieve a PLLC from paying to a former member or holder pension benefits or other deferred compensation for services rendered by the former member or holder, if otherwise permitted by law.

(e)  Specific enforcement.  Any governing terms contained in the LLC documents of a PLLC or a private agreement as to the amount of fair value and other terms of payment for a membership interest or financial rights are specifically enforceable.

[Acts 2005, ch. 286, § 1; 2006, ch. 620, § 57.]