(a)Limit on power to challenge. Except as provided in subsection (b), the validity of an LLC‘s action may not be challenged on the ground that the LLC lacks or lacked the power to act.
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Terms Used In Tennessee Code 48-249-105

  • Court: includes every court and judge having jurisdiction in the case. See Tennessee Code 48-202-101
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Director: means an individual who is vested with authority as a director under §. See Tennessee Code 48-249-102
  • Employee: includes an officer but not a director. See Tennessee Code 48-11-201
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • LLC: means a limited liability company, organized under chapters 201-248 of this title. See Tennessee Code 48-202-101
  • 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
  • Personal representative: means , as to an individual, the executor, administrator, guardian, conservator, trustee or other legal representative of the individual, and, as to an entity, the legal representative or successor of the entity. See Tennessee Code 48-249-102
  • Proceeding: means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal. See Tennessee Code 48-249-102
  • Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
  • Trustee: A person or institution holding and administering property in trust.
(b)Challenge of power. An LLC’s power to act may be challenged in a proceeding by:

(1) A member against the LLC to enjoin the act;
(2) The LLC, directly, derivatively or through a receiver, trustee or other personal representative, against an incumbent or former director, manager, employee, agent or member of the LLC, as applicable; or
(3) The attorney general and reporter under § 48-249-617.
(c)Derivative action. In a member’s proceeding, under subdivision (b)(1), to enjoin an unauthorized LLC act, the court may enjoin or set aside the act, if equitable, and if all affected persons are parties to the proceeding, and may award damages for loss suffered by the LLC or another party because of enjoining the unauthorized act.
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