(a)Provisions generally waivable. To the extent the LLC documents do not otherwise provide, this chapter governs relations among the members, holders of financial rights, managers, directors, officers and the LLC, as applicable. It is the express intent of the legislature of this state that members of an LLC may modify, alter or waive any provisions of this chapter in the LLC documents, except as otherwise set forth in subsection (b).
lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Tennessee Code 48-249-205

  • Business: means every trade, occupation, profession, investment activity, and other lawful purpose for gain or the preservation of assets, whether or not carried on for profit. See Tennessee Code 48-249-102
  • Director: means an individual who is vested with authority as a director under §. See Tennessee Code 48-249-102
  • Directors: means natural persons, designated in the charter or bylaws or elected or appointed by the incorporators, and their successors and natural persons elected or appointed to act as members of the board, irrespective of the names or titles by which such persons are described. See Tennessee Code 48-51-201
  • Employee: includes an officer but not a director. See Tennessee Code 48-11-201
  • Financial rights: means a member's or holder's rights to:
    (A) Share in profits and losses, as provided in §. See Tennessee Code 48-249-102
  • holder: means a person, other than a member, owning any financial rights in an LLC. See Tennessee Code 48-249-102
  • Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
  • Individual: includes the estate of an incompetent or deceased individual. See Tennessee Code 48-11-201
  • LLC: means a limited liability company, organized under chapters 201-248 of this title. See Tennessee Code 48-202-101
  • LLC documents: means either, or both:
    (A) An LLC's articles. See Tennessee Code 48-249-102
  • Manager: means a person who is vested with authority as a manager under §. See Tennessee Code 48-249-102
  • Member: means a person that has been admitted to an LLC as a member, as provided in §. See Tennessee Code 48-249-102
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Officer: means an individual, who is vested with authority as an officer under §. See Tennessee Code 48-249-102
  • Person: means an individual or an entity. See Tennessee Code 48-249-102
  • Secretary: means the corporate officer to whom the bylaws or the board of directors has delegated responsibility under §. See Tennessee Code 48-11-201
  • Secretary of state: means the individual who holds the office of secretary of state of this state. See Tennessee Code 48-249-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b)Nonwaivable provisions. The LLC documents may not:

(1) Vary the requirement under § 48-249-102(6) that a director be an individual or vary the requirement under § 48-249-102(23) that an officer be an individual;
(2) Vary the notice requirements under § 48-249-103, or under the other provisions of this chapter, in a manner that is manifestly unreasonable;
(3) Vary the requirements with respect to the LLC’s name under § 48-249-106;
(4) Vary the requirements under § 48-249-112(c), regarding the Workers’ Compensation Law, compiled in title 50, chapter 6;
(5) Eliminate or vary the potential for personal liability under § 48-249-114(a)(2) or (d);
(6) Eliminate or vary the restrictions on indemnification in § 48-249-115(i)(1)(A), (i)(1)(B) or (i)(1)(C);
(7) Eliminate or vary any restrictions in § 48-249-202(b)(1)(C)(i), (b)(1)(C)(ii) or (b)(1)(C)(iii), on the elimination or limitation of the personal liability of a director under § 48-249-202(b)(1)(C);
(8) Eliminate or vary this section;
(9) Eliminate or vary the restrictions on distributions in § 48-249-306;
(10) Eliminate or vary the liability for unlawful distributions in § 48-249-307;
(11) Authorize a director to appoint a proxy;
(12) Unreasonably restrict a right to information or access to records under § 48-249-308;
(13) Eliminate the duty of loyalty under § 48-249-403(b)(1) or (b)(2), but the LLC documents may:

(A) Identify specific types or categories of activities that do not violate the duty of loyalty under § 48-249-403(b)(1) or (b)(2), if not manifestly unreasonable; and
(B) Specify the number or percentage of members, disinterested managers or disinterested directors, which may be greater or lesser than the number or percentage required under § 48-249-404, if applicable, that may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;
(14) Unreasonably reduce the duty of care under § 48-249-403(c), (h)(2), (i)(4)(B), (i)(4)(C), (j)(2) or (j)(3);
(15) Eliminate the obligation of good faith and fair dealing under § 48-249-403(d), but the LLC documents may determine the standards by which performance of the obligation is to be measured, if the standards are not manifestly unreasonable;
(16) Eliminate the obligation of good faith under § 48-249-403(i)(4)(A) or (j)(1), but the LLC documents may determine standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;
(17) Vary the right to expel a member in an event specified in § 48-249-503(a)(6);
(18) Vary the requirement to wind up the LLC’s business in an event specified in § 48-249-601(a)(5);
(19) Eliminate or vary § 48-249-401(f)(7), part 10 or part 11 of this chapter;
(20) Vary any requirements relating to documents required to be filed with the secretary of state or any register of deeds, or otherwise vary or restrict any other rights of the secretary of state or any register of deeds; or
(21) Otherwise vary or restrict any rights of any other person under this chapter, other than rights of a manager, director, officer, employee, agent, member or holder of financial rights.
  Previous section
Next section  
 Part 2 Contents