2018 Tennessee Code
Title 48 - Corporations and Associations
Limited Liability Companies
Chapter 249 - Tennessee Revised Limited Liability Company Act
Part 5 - Admission of Members -- Membership Interests -- Transferees and Creditors of Members
§ 48-249-507. Transfer of financial rights.
(a) Transferability of financial rights. Except as provided in subsection (c) the financial rights of a member or a holder of financial rights are transferable in whole or in part.
(b) Effect of transfer of financial rights. A transfer of the financial rights of a member or a holder of financial rights entitles the transferee to receive, to the extent transferred, only the share of profits and losses and the distributions to which the transferor would otherwise be entitled, together with the right to transfer further the financial rights so transferred. A transfer of the financial rights of a member or a holder of financial rights does not dissolve the LLC and does not entitle or empower the transferee to become a member, to cause a dissolution, or to exercise any governance rights. Any attempt by the transferee to become a member, cause a dissolution or exercise any governance rights shall be null and void.
(c) Restrictions on transfer of financial rights.
(1) A restriction on the transfer of financial rights may be imposed in the LLC documents, by a written resolution adopted by all the members, or by a written agreement among, or other written action by, all the members, and, if so provided in the LLC documents, holders of financial rights.
(2) A restriction on the transfer of financial rights referenced in subdivision (c)(1) is enforceable against the owner of the restricted financial rights. A written restriction on the transfer of financial rights that is set forth in the LLC documents may be enforced against a successor or transferee of the owner of the restricted financial rights, including a pledgee or a personal representative, whether or not such successor or transferee of the owner had actual notice of the restricted financial rights. Except for a written restriction in the LLC documents, a restriction, even though permitted by this section, is ineffective against a person without knowledge of the restriction.
(d) Effective date of transfer. Any permissible transfer of financial rights under this section shall be effective as to and binding on the LLC, only when the transferee's name, address, taxpayer identification number and the nature and extent of the transfer are reflected in the LLC documents or the records of the LLC.
