(a) If shares must be acquired under § 48-101-613, the professional corporation shall deliver a written notice to the personal representative of the estate of its deceased shareholder, or to the disqualified person, the transferee, the retiree, or the shareholder terminating such shareholder’s employment with the corporation, offering to purchase the shares at a price the corporation believes represents their fair value as of the date of death, disqualification, transfer, retirement or termination. The offer notice must be accompanied by the corporation’s balance sheet for a fiscal year ending not more than sixteen (16) months before the effective date of the offer notice, an income statement for that year, a statement of changes in shareholders’ equity for that year, and the latest available interim financial statements, if any.

Terms Used In Tennessee Code 48-101-614

  • 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.
  • 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
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • 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
  • 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
  • Representative: means a governor, manager, employee or other agent of a foreign LLC. See Tennessee Code 48-202-101
  • 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
  • written: means any information in the form of a document. See Tennessee Code 48-11-201
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) The disqualified person has thirty (30) days from the effective date of the notice to accept the corporation’s offer or demand that the corporation commence a proceeding under § 48-101-615 to determine the fair value of such person’s shares. If such person accepts the offer, the corporation shall make payment for the shares within sixty (60) days from the effective date of the offer notice (unless a later date is agreed on) upon the disqualified person’s surrender of such person’s shares to the corporation.
(c) After the corporation makes payment for the shares, the disqualified person has no further interest in them.
  Previous section
Next section  
 Part 6 Contents