Tennessee limited liability statute

TCA §48-249-114. Personal liability (under the Tennessee Revised LLC Act)

(a)  Limited liability rule. 

     (1)  Except as provided in subsections (d) and (f):

          (A)  The debts, obligations and liabilities of an LLC, whether arising in contract, tort or otherwise, are solely the debts, obligations and liabilities of the LLC;

          (B)  A member, holder, director, manager, officer, employee or other agent of an LLC does not have any personal obligation, and is not otherwise personally liable, for the acts, debts, liabilities or obligations of the LLC; and

          (C)  A member, holder, director, manager, officer, employee or other agent of an LLC does not have any personal obligation, and is not otherwise personally liable, for the acts or omissions of any other member, holder, manager, officer, director, employee or other agent of the LLC.

     (2)  Notwithstanding the provisions of subdivisions (a)(1)(B) and (C), a member, holder of financial rights, director, manager, officer, employee or other agent may be personally liable by reason of such person's own acts or omissions.

(b)  Limited liability after dissolution.  The limitation on liability described in subsection (a) continues in full force, regardless of any dissolution, winding up or termination of an LLC.

(c)  Member not a proper party to proceeding.  A member, holder, director, manager, officer, employee or other agent of an LLC is not a proper party to a proceeding by or against an LLC, except:

     (1)  Where the object of the proceeding is to enforce such person's right against, or liability to, the LLC;

     (2)  In a derivative proceeding brought under this chapter or the LLC documents; or

     (3)  Where the proceeding asserts personal liability of such person, as described in subsection (a).

(d)  Sales tax liability.  Notwithstanding any other provision of this chapter to the contrary, each member, manager, director, officer, employee, agent or other person required to collect, truthfully account for and pay over to the department of revenue any tax collected from the customers of a domestic or foreign LLC shall be personally liable for those taxes, in the same manner as responsible persons of a corporation under the provisions of § 67-1-1443.

(e)  Failure to follow formalities not to generate personal liability.  The failure of a domestic or foreign LLC to observe the usual entity formalities or requirements relating to the exercise of its powers or management of its business is not a ground for imposing personal liability on the members, holders, managers, directors, officers, employees or other agents of the domestic or foreign LLC.

(f)  Voluntary unlimited liability. 

     (1)  Notwithstanding anything to the contrary in this section, the articles may provide that one (1) or more specifically identified members, as named in the articles, will be personally liable for all of the debts, obligations and liabilities of the LLC. If that provision is made, each such specifically identified member shall be liable to the same extent as a general partner in a general partnership; provided, that:

          (A)  In order to be effective, each member so identified shall sign the articles or an amendment to the articles containing this provision; and

          (B)  Each member identified in the articles shall continue to be personally liable for debts, obligations and liabilities of the LLC until the articles are amended to delete the member's name, but, except as provided in subdivision (f)(2), the amendment shall be signed by a person authorized to bind the LLC under § 48-249-402, and by any remaining members who continue to be identified in the articles as being personally liable for the debts, obligations and liabilities of the LLC.

     (2)  A member who is identified in the articles as being personally liable has the power, but not necessarily the right, to file an amendment to the articles, stating that such member will not be liable for any future debts, obligations and liabilities of the LLC, except with respect to persons that have reasonably relied upon the articles.

     (3)  An amendment to the articles filed under subdivisions (f)(1) and (2) shall be effective immediately, except that such an amendment is not effective against persons reasonably relying upon the articles naming the member as individually liable for the debts, obligations and liabilities of the LLC, until the passage of ninety (90) days from the filing of the amendment to the articles. Notwithstanding the provisions of this subdivision (f)(3), such member shall continue to be liable for all debts and obligations of the LLC incurred by the LLC during the time that the member was identified in the articles as being personally liable.

 

[Acts 2005, chapter 286, § 1.]   

Disclaimer: The above statute may not be the most recent version.  It is presented for illustrative purposes and the Tennessee Code Annotated is updated often and may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained herein. Please check official sources.

© 2001-2017 Carpenter & Lewis PLLC