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2017 Tennessee Code
Title 48 - Corporations and Associations
Limited Liability Companies
Chapter 249 - Tennessee Revised Limited Liability Company Act
Part 3 - Finance
§ 48-249-305. Sharing of and rights to distributions.
Universal Citation: TN Code § 48-249-305 (2017)
- (a) LLC documents control. Any distributions by an LLC shall be allocated and distributed among the members and holders of financial rights in the manner provided in the LLC documents.
- (b) LLC documents silent. If the LLC documents do not provide for the allocations of distributions, then distributions, including distributions on termination of the LLC, except as provided in § 48-249-620, shall be allocated among the members and holders of financial rights in equal shares.
- (c) Record date. The LLC documents may provide for a record date with respect to distributions.
- (d) In kind distributions. Neither a member nor a holder has a right to demand or receive a distribution in kind, regardless of the contribution of the member or holder. Neither a member nor a holder may be compelled to accept a distribution of any asset in kind from an LLC, to the extent that the percentage of the asset distributed to the member or holder exceeds a percentage of that asset that is equal to the percentage in which the member or holder shares in distributions from the LLC.
- (e) Status of recipient. If a member or holder of financial rights becomes entitled to receive a distribution, the member or holder of financial rights has the status of, and is entitled to all remedies available to, a general, unsecured creditor of the LLC with respect to the distribution.
- (f) Entitlement to receive distributions. A member or holder of financial rights is entitled to receive distributions before dissolution, only as provided by the LLC documents or by a majority vote of the members of a member-managed LLC, the managers of a manager-managed LLC, or the directors of a director-managed LLC, as applicable.
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