2016 Tennessee Code
Title 48 - Corporations and Associations
Nonprofit Corporations
Chapter 60 - Amendment of Charter and Bylaws
Part 2 - Amendment of Bylaws
§ 48-60-206. Amendment to bylaws may not divert property held in trust for charitable purpose from that purpose -- Exception -- Financial benefit in connection with bylaws amendment prohibited -- Exception.

(a) Property held in trust by a corporation or otherwise dedicated to a charitable purpose may not be diverted from its purpose by an amendment of its bylaws unless the corporation obtains an appropriate order of a court of competent jurisdiction to the extent required by and pursuant to the law of this state on cy pres or otherwise dealing with the nondiversion of charitable assets.

(b) Unless a corporation, after notifying the attorney general and reporter obtains an appropriate order of a court of competent jurisdiction under the law of this state on cy pres or otherwise dealing with the nondiversion of charitable assets, an amendment of its bylaws may not affect:

(1) Any restriction imposed upon property held by the corporation by virtue of any trust under which it holds that property; or

(2) The existing rights of persons other than its members.

(c) A person who is a member or otherwise affiliated with a public benefit corporation may not receive a direct or indirect financial benefit in connection with an amendment of the bylaws unless the person is itself a public benefit corporation or an unincorporated entity with a charitable purpose. This subsection (c) does not apply to the receipt of reasonable compensation for services rendered.