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48-202-101 - Limited liability company definitions.

48-202-101. Limited liability company definitions.

As used in chapters 201-248 of this title, unless the context otherwise requires:

     (1)  “Affiliate” of a specific person means a person that directly, or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified;

     (2)  “Articles” or “articles of organization” means in the case of an LLC organized under chapters 201-248 of this title, articles of organization, articles of amendment, articles of correction, certificates of merger, and all similar documents required to be filed with any of the foregoing as part of the formation and continuation of an LLC. In the case of a foreign limited liability company, “articles” or “articles of incorporation” includes all documents serving a similar function required to be filed with the secretary of state or other state office of the LLC's jurisdiction of organization;

     (3)  “Articles of conversion” means the form of articles provided for in chapter 204 of this title creating a new LLC and evidencing the conversion of an existing partnership or corporation to the new LLC which shall have all of the assets and liabilities of the former partnership;

     (4)  “Board” or “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;

     (5)  “Board-managed” means an LLC organized pursuant to this title that elected pursuant to § 48-205-101(5), to be governed by a board of governors;

     (6)  “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;

     (7)  “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;

     (8)  “Contribution agreement” means a binding agreement between a person and an LLC under which:

          (A)  The person has an obligation to make a contribution to the LLC in the future; and

          (B)  The LLC agrees that, if the person makes the specified contribution at the time and in the manner specified for the contribution in the future, the LLC will accept the contribution, and reflect the contribution in the required records;

     (9)  “Contribution allowance agreement” means an agreement between a person and an LLC, under which:

          (A)  The person has the right, but not the obligation, to make a contribution to the LLC in the future; and

          (B)  The LLC agrees that, if the person makes the specified contribution at the time and in the manner specified for the contribution in the future, the LLC will accept the contribution, and reflect the contribution in the required records;

     (10)  “Corporation” or “domestic corporation” means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of the Tennessee Business Corporation Act, compiled in chapters 11-27 of this title, as amended;

     (11)  “Court” includes every court and judge having jurisdiction in the case;

     (12)  “Dissolution” means that the LLC has incurred an event under § 48-245-101;

     (13)  “Dissolution avoidance consent” means the consent to continue the existence and business of the LLC without dissolution, which consent is given as provided in § 48-245-101(b) by the members whose membership has not terminated or as otherwise allowed by this chapter and which consent is given after the occurrence of any event that otherwise dissolves the LLC;

     (14)  “Distribution” means a direct or indirect transfer of money or other property (except its own membership interests) with or without consideration, or an incurrence or issuance of indebtedness, (whether directly or indirectly, including through a guaranty) by an LLC to or for the benefit of any of its members in respect of membership interests. A distribution may be in the form of an interim distribution or a liquidation distribution; a purchase, redemption, or other acquisition of its membership interests; a distribution of indebtedness (which includes the incurrence of indebtedness, whether directly or indirectly, including through a guaranty, for the benefit of the members) or otherwise;

     (15)  “Entity” includes the following, whether foreign or domestic: LLCs; corporations; not-for-profit corporations; profit and not-for-profit unincorporated associations; business trusts; estates; general partnerships, limited partnerships, registered or unregistered limited liability partnerships or similar organizations; trusts; joint ventures; and two (2) or more persons having a joint or common economic interest; and also includes local, municipal, state, United States, and foreign governments;

     (16)  “Financial rights” means a member's rights to:

          (A)  Share in profits and losses as provided in § 48-220-101;

          (B)  Share in distributions as provided in § 48-236-101;

          (C)  Receive interim distributions as provided in § 48-236-102; and

          (D)  Receive liquidation distributions as provided in § 48-245-1101;

     (17)  “Foreign corporation” means a corporation for profit incorporated under a law other than the laws of this state;

     (18)  “Foreign LLC” means an entity that is:

          (A)  Not incorporated;

          (B)  Organized under laws of a jurisdiction other than the laws of this jurisdiction, or under the laws of any foreign country;

          (C)  Organized under a statute which affords to each of its members limited liability with respect to some or all of the obligations and liabilities of the entity; and

          (D)  Is not required to be registered or organized under any statute of this state other than chapters 201-248 of this title;

     (19)  “Governance rights” means a right to vote on one (1) or more matters and all a member's rights as a member in the LLC other than financial rights and the right to assign financial rights;

     (20)  “Governing body” means the board of governors in the case of a board-managed LLC, the members in the case of a member-managed LLC, and the board of directors in the case of a corporation;

     (21)  “Governor” means a natural person or entity serving on the board of governors of a board-managed LLC;

     (22)  “Limited liability company” or “LLC” means a limited liability company, organized under chapters 201-248 of this title;

     (23)  “Majority vote” means with respect to a vote of the members, if voting on a per capita basis, a majority in number of the members entitled to vote on a specific matter, or if the voting is determined otherwise, a majority of the voting interest (which may be expressed as a percentage) entitled to vote on a specific matter, and with respect to a vote of the governors, a majority in number of the governors entitled to vote on a specific matter.

     (24)  “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 § 48-241-106;

     (25)  “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. With respect to a foreign LLC, “member” means an individual or entity recognized under the laws of the jurisdiction of organization of the foreign LLC as an owner of a governance interest (or its equivalence) in the foreign LLC;

     (26)  “Member-managed” means an LLC organized pursuant to this title that has elected pursuant to § 48-205-101(5) to be governed by its members, without a board of governors;

     (27)  “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 § 48-218-101, a member's governance rights, and a member's right to assign governance rights as provided in § 48-218-102. If a member has assigned some or all of its financial rights, then, with respect to that member, “membership interest” means the member's governance rights, the member's right to assign governance rights, any remaining financial rights of the member, and the member's right to assign any remaining financial rights;

     (28)  “Notice” under this title has the meaning given it in § 48-202-102;

     (29)  “Operating agreement” means a written agreement described in § 48-206-101 among the members concerning the LLC;

     (30)  “Owners” means members in the case of an LLC, shareholders in the case of a corporation, partners in the case of general or limited partnerships and the equivalent with respect to other entities;

     (31)  “Ownership interests” means membership interests in the case of an LLC, shares in the case of a corporation, partnership interests in the case of general or limited partnerships and the equivalent with respect to other entities;

     (32)  “Person” includes individual and entity;

     (33)  “Principal executive office” means an office, in or out of this state, where the principal office of the chief manager of the LLC or foreign LLC is located. If the LLC has no chief manager, “principal executive office” means the registered office of the LLC;

     (34)  “Proceeding” includes civil suit and criminal, administrative, and investigatory action;

     (35)  “Professional limited liability company” or “professional LLC” or “PLLC” has the meaning given in § 48-248-102(6);

     (36)  “Registered office” means the place in this state designated in the articles as the registered office of the LLC;

     (37)  “Representative” means a governor, manager, employee or other agent of a foreign LLC;

     (38)  “Required records” are those records required to be maintained under § 48-228-101;

     (39)  “Secretary of state” means the person who holds the office of secretary of state of Tennessee. A filing with the secretary of state occurs by a proper filing with the office of the secretary of state. An action required by the secretary of state may be performed by employees or agents of the office of the secretary of state;

     (40)  “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;

     (41)  “Surviving entity” or “resulting entity” means the entity resulting from a merger;

     (42)  “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 § 48-245-701 or is considered filed with the secretary of state under § 48-244-103 or § 48-244-104(b); and

     (43)  “Written action” means a written document signed by those persons required to take the action described.

[Acts 1994, ch. 868, § 1; 1995, ch. 403, §§ 1, 3, 4; 1999, ch. 455, §§ 1-3; 2000, ch. 623, § 3.]