(a) If the membership interest of a member is terminated by the member in contravention of the LLC documents, then:

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Terms Used In Tennessee Code 48-249-504

  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Governance rights: means a member's right to vote on one (1) or more matters, all of a member's other rights as a member in the LLC under the LLC documents or this chapter, other than financial rights, and the right to transfer the voting and other rights described in this subdivision (13). 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
  • 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
  • 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)Forfeiture of governance rights. The member forfeits all the member’s governance rights in the LLC, including in the winding up and termination process of the LLC; and
(2)Liability for damages. The member is liable for damages incurred by all the other members, holders and the LLC due to the wrongful termination. Such damages and all other amounts owing to the LLC, whether or not currently due, arising from the wrongful termination, may be offset against any amount owing from the LLC to the wrongfully terminating member.
(b) Nothing in this section shall be deemed to provide a member with the power to terminate the member’s membership interest, if the LLC documents negate or, pursuant to § 48-249-503(b)(1), are deemed to negate the power.
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