(a)Generally. With respect to a board-managed LLC, a resolution approved by the affirmative vote of a majority of the board of governors may establish committees having the authority of the board in the management of the business of the LLC only to the extent provided in the resolution, including special litigation committees to consider legal rights or remedies of the LLC and whether those rights and remedies should be pursued. Committees other than special litigation committees are subject at all times to the direction and control and serve at the pleasure of the board of governors.
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Terms Used In Tennessee Code 48-239-114

  • board of governors: means the board of governors of an LLC electing to be board-managed or, in the case of a foreign limited liability company, its equivalent. See Tennessee Code 48-202-101
  • Board-managed: means an LLC organized pursuant to this title that elected pursuant to §. See Tennessee Code 48-202-101
  • Business: includes every trade, occupation, profession, investment activity and other lawful purpose for gain or the preservation of assets whether or not carried on for profits. See Tennessee Code 48-202-101
  • Class: when used with reference to membership interests, means a category of membership interests that differs in one (1) or more rights or preferences from another category of membership interests of the LLC. See Tennessee Code 48-202-101
  • Contract: A legal written agreement that becomes binding when signed.
  • Governor: means a natural person or entity serving on the board of governors of a board-managed LLC. See Tennessee Code 48-202-101
  • 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
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • LLC: means a limited liability company, organized under chapters 201-248 of this title. See Tennessee Code 48-202-101
  • Manager: means a person elected, appointed, or otherwise designated as a manager by the governing body, and any other person considered elected as a manager pursuant to §. See Tennessee Code 48-202-101
  • Member: means a person reflected in the required records of an LLC as the owner of some governance rights of a membership interest of the LLC. See Tennessee Code 48-202-101
  • 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 consisting of a member's financial rights, a member's right to assign financial rights as provided in §. See Tennessee Code 48-202-101
  • Operating agreement: means a written agreement described in §. See Tennessee Code 48-202-101
  • Person: includes individual and entity. See Tennessee Code 48-202-101
  • Series: means a category of membership interests, within a class of membership interests, that have some of the same rights and preferences as other membership interests within the same class, but that differ in one (1) or more rights and preferences from another category of membership interests within that class. See Tennessee Code 48-202-101
(b)Membership. With respect to a board-managed LLC, unless the articles or operating agreement provides for a different membership or manner of appointment, a committee consists of one (1) or more persons appointed by affirmative vote of a majority of the governors in office when the action is taken. Each member of a committee must be a member of the board of governors of the LLC; provided, that unless the articles or operating agreement provides otherwise, non-governors may serve on the special litigation committee.
(c)Procedure. Sections 48-239-111 – 48-239-113 apply to committees and members of committees to the same extent as those sections apply to the board of governors and governors.
(d)Minutes. Minutes, if any, of committee meetings must be made available upon request to members of the committee and to any governor.
(e)Standard of Conduct. The establishment of, delegation of authority to, and action by a committee does not alone constitute compliance by a governor with the standard of conduct set forth in § 48-239-115.
(f)Committee Authority. To the extent specified by the board of governors or in the articles or operating agreement, each committee may exercise the authority of the board of governors under § 48-238-101(a)(2).
(g)Limitations on Committee Authority. A committee may not, however:

(1) Authorize distributions, except according to a formula or method prescribed by the board of governors;
(2) Approve or propose to members actions that chapters 201-248 of this title requires to be approved by members;
(3) Fill vacancies on the board of governors or on any of its committees;
(4) Adopt a plan of merger not requiring member approval;
(5) Authorize or approve reacquisition of membership interest, except according to a formula or method prescribed by the board of governors; or
(6) Authorize or approve the issuance or sale or contract for sale of membership interest, or determine the designation and relative rights, preferences, and limitations of a class or series of membership interests, except that the board of governors may authorize a committee (or chief manager of the LLC) to do so within limits specifically prescribed by the board of governors.
(h)Standard of Conduct for Committee Members. Each governor serving on a committee and each person not a governor serving on a special litigation committee shall be subject to the standard of conduct set forth in § 48-239-115 and shall be subject to the same conflict of interest rules and exemptions as found in § 48-239-116.
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