(a)Board-Managed. With respect to a board-managed LLC, the election or appointment of a person as a manager or agent does not, of itself, create contract rights. An LLC may enter into a contract with a manager or agent for any period of time if, in the board of governors‘ judgment, the contract would be in the best interests of the LLC. The fact that the contract may be for a term longer than the terms of the governors who authorized or approved the contract does not make the contract void or voidable.
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Terms Used In Tennessee Code 48-241-108

  • 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
  • Contract: A legal written agreement that becomes binding when signed.
  • 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
  • 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-managed: means an LLC organized pursuant to this title that has elected pursuant to §. See Tennessee Code 48-202-101
  • Person: includes individual and entity. See Tennessee Code 48-202-101
(b)Member-Managed. With respect to a member-managed LLC, the election or appointment of a person as a manager or agent does not, of itself, create contract rights. An LLC may enter into a contract with a manager or agent for any period of time if, in the members’ judgment, the contract would be in the best interest of the LLC.
(c)Removal or Resignation Does not Affect Contract Rights. A manager’s removal does not affect the manager’s contract rights, if any, with the LLC. A manager’s resignation does not affect the LLC’s contract rights, if any, with the manager.
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