(a) No proceeding may be brought by a creditor of a corporation to reach the liability, if any, of a member to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such proceeding would be useless.
non profit

Need help reviewing 501c forms?
Have it reviewed by a lawyer, get answers to your questions and move forward with confidence.
Connect with a lawyer now

Terms Used In Tennessee Code 48-56-205

  • 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.
  • 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
  • Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Tennessee Code 48-202-101
(b) All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any creditor’s proceeding brought under subsection (a) to reach and apply unpaid amounts due the corporation. Any or all members who owe amounts to the corporation may be joined in such proceeding.
(c) Nothing provided in subsection (a) or (b) is intended to preclude the availability of other remedies to a creditor.
  Previous section
Next section  
 Part 2 Contents