(a) Except as provided in subsection (c), a member‘s financial rights are transferable in whole or in part.
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Terms Used In Tennessee Code 43-38-503

  • Bylaws: means a written agreement described in §. See Tennessee Code 43-38-103
  • Cooperative: means an association organized under this title conducting business on a cooperative plan as provided under this chapter. See Tennessee Code 43-38-103
  • Financial rights: means a member's right to:
    (A) Share in profits and losses as provided in §. See Tennessee Code 43-38-103
  • Governance rights: means a right to vote on one (1) or more matters and all a member's rights as a member in the cooperative other than financial rights. See Tennessee Code 43-38-103
  • Member: means a person or entity reflected on the books of the cooperative as the owner of governance rights of a membership interest of the cooperative and includes patron and nonpatron members. See Tennessee Code 43-38-103
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
  • Written action: means a written document signed by those persons required to take the action described. See Tennessee Code 43-38-103
(b) An assignment of a member’s financial rights entitles the assignee to receive, to the extent assigned, only the share of profits and losses and the distributions to which the assignor would otherwise be entitled. An assignment of a member’s financial rights does not dissolve the cooperative and does not entitle or empower the assignee to become a member, to cause a dissolution, to exercise any governance rights, or, except as specifically provided by this chapter, to receive any notices from the cooperative, or to cause dissolution. The assignment may not allow the assignee to control the member’s exercise of governance rights, and any attempt to do so shall be void.
(c)

(1) A restriction on the assignment of financial rights may be imposed in the articles, in the bylaws, by a written resolution adopted by the members, or by a written agreement among, or other written action by, members, or among them and the cooperative.
(2) A restriction on the assignment of financial rights referenced in subdivision (c)(1) that is not manifestly unreasonable under the circumstances is enforceable against the owner of the restricted financial rights. A written restriction on the assignment of financial rights that is not manifestly unreasonable under the circumstances and is noted in the articles or bylaws may be enforced against a successor or transferee of the owner of the restricted financial rights, including a pledge or a legal representative, whether or not the successor or transferee of the owner had actual notice of the restriction. Unless noted in the articles or bylaws, a restriction, even though permitted by this section, is ineffective against a person without knowledge of the restriction.
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