(a)Purchase obligation. A PLLC shall purchase, or cause to be purchased by a qualified person, the membership interest of any member and the financial rights of any holder of financial rights, at a price that represents the fair value of the membership interest or financial rights as of the date of the occurrence of the event giving rise to the PLLC’s purchase obligation under this subsection (a), from the personal representative of the member or holder of financial rights, the member or holder of financial rights or the disqualified person to whom the membership interest or financial rights has or have been transferred, as applicable, in accordance with this section, if:

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Terms Used In Tennessee Code 48-249-1111

  • Court: includes every court and judge having jurisdiction in the case. See Tennessee Code 48-202-101
  • Disqualified person: means an individual or entity that for any reason is or becomes ineligible under this part to be a member of a PLLC or holder of financial rights of a PLLC. See Tennessee Code 48-249-1102
  • 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
  • Interest: means either or both of the following rights under the organic law of an unincorporated entity:
    (A) The right to receive distributions from the entity either in the ordinary course or upon liquidation. See Tennessee Code 48-11-201
  • Law: includes rules promulgated in accordance with §. See Tennessee Code 48-249-1102
  • 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
  • Member: means a person that has been admitted to an LLC as a member, as provided in §. See Tennessee Code 48-249-102
  • Membership: means the rights and obligations a member has pursuant to a corporation's charter, bylaws and chapters 51-68 of this title. See Tennessee Code 48-51-201
  • Membership interest: means a member's interest in an LLC, which shall consist of the member's financial rights and governance rights. 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.
  • Person: means an individual or an entity. 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
  • PLLC: has the meaning set forth in §. See Tennessee Code 48-249-102
(1) The member or holder of financial rights dies;
(2) The member or holder of financial rights becomes a disqualified person, except as provided in subsection (c);
(3) The membership interest of a member or the financial rights of a holder is or are transferred by operation of law or court judgment to a disqualified person, except as provided in subsection (c); or
(4) The member or holder of financial rights retires, withdraws from or terminates employment with the PLLC.
(b)Purchase terms. If the amount of fair value and other terms of payment for the membership interest or financial rights are fixed, or are to be determined by the LLC documents or a private agreement, the amount and terms so fixed or determined govern. If the amount of fair value and other terms of payment are not so fixed or determined by the LLC documents or a private agreement, the PLLC shall purchase the membership interest or financial rights in accordance with § 48-249-1112.
(c)Limited disqualification. This section does not require the purchase of a membership interest or financial rights in the event a member or holder of financial rights becomes a disqualified person, if the disqualification lasts no more than five (5) months from the date the disqualification occurs.
(d)Other benefits. This section and § 48-249-1112 do not prevent or relieve a PLLC from paying to a former member or holder pension benefits or other deferred compensation for services rendered by the former member or holder, if otherwise permitted by law.
(e)Specific enforcement. Any governing terms contained in the LLC documents of a PLLC or a private agreement as to the amount of fair value and other terms of payment for a membership interest or financial rights are specifically enforceable.
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