(a) A professional corporation must acquire (or cause to be acquired by a qualified person) the shares of its shareholder, at a price the corporation believes represents their fair value as of the date of death, disqualification, transfer, retirement or termination of employment, if:

Terms Used In Tennessee Code 48-101-613

  • Bylaws: means the code or codes of rules (other than the charter) adopted pursuant to chapters 51-68 of this title for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated. See Tennessee Code 48-51-201
  • Charter: includes amended and restated charters and articles of merger. See Tennessee Code 48-11-201
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • 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 issued shares by a professional corporation. See Tennessee Code 48-101-603
  • Law: includes rules promulgated in accordance with §. See Tennessee Code 48-101-603
  • Person: includes individual and entity. See Tennessee Code 48-202-101
  • Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Tennessee Code 48-202-101
  • Professional corporation: means a corporation for profit, other than a foreign professional corporation, subject to this part. See Tennessee Code 48-101-603
  • Shareholder: means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation. See Tennessee Code 48-11-201
  • Termination: means the end of an LLC's existence as a legal entity and occurs when the articles of termination are filed with the secretary of state under §. See Tennessee Code 48-202-101
(1) The shareholder dies;
(2) The shareholder becomes a disqualified person, except as provided in subsection (c);
(3) The shares are transferred by operation of law or court judgment to a disqualified person, except as provided in subsection (c); or
(4) The shareholder retires, withdraws from or terminates employment with the professional corporation.
(b) If a price for the shares is fixed in accordance with the charter or bylaws or by private agreement, that price controls. If the price is not so fixed, the corporation shall acquire the shares in accordance with § 48-101-614. If the disqualified person rejects the corporation’s purchase offer, either the person or the corporation may commence a proceeding under § 48-101-615 to determine the fair value of the shares.
(c) This section does not require the acquisition of shares in the event of disqualification if the disqualification lasts no more than five (5) months from the date the disqualification or transfer occurs.
(d) This section and § 48-101-614 do not prevent or relieve a professional corporation from paying pension benefits or other deferred compensation for services rendered to a former shareholder if otherwise permitted by law.
(e) A provision for the acquisition of shares contained in a professional corporation’s charter or bylaws, or in a private agreement, is specifically enforceable.
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