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Tennessee Code Title 48. Corporations and Associations § 48-16-101

Current as of January 02, 2024 | Updated by Findlaw Staff

(a) The charter must prescribe the number of shares of each class that the corporation is authorized to issue. If more than one (1) class of shares is authorized, the charter must prescribe a distinguishing designation for each class, and prior to the issuance of shares of a class, the preferences, limitations, and relative rights of that class must be described in the charter. All shares of a class must have preferences, limitations, and relative rights identical with those of other shares of the same class except to the extent otherwise permitted by § 48-16-102.

(b) The charter must authorize:

(1) One (1) or more classes of shares that together have unlimited voting rights; and

(2) One (1) or more classes of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution.

(c) The charter may authorize one (1) or more classes of shares that:

(1) Have special, conditional, or limited voting rights, or no right to vote, except to the extent prohibited by chapters 11-27 of this title;

(2) Are redeemable or convertible as specified in the charter:

(A) At the option of the corporation, the shareholder, or another person or upon the occurrence of a designated event;

(B) For cash, indebtedness, securities, or other property;

(C) In a designated amount or in an amount determined in accordance with a designated formula or by reference to extrinsic data or events;

(3) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative;

(4) Have preference over any other class of shares with respect to distributions, including dividends and distributions upon the dissolution of the corporation; or

(5) Have a par value; provided, that the mere recitation of a par value for shares shall not create a requirement for a minimum consideration for the issuance of any such shares or impose any other restriction on their issuance or create any other right or liability with respect thereto.

(d) The description of the designations, preferences, limitations, and relative rights of share classes in subsection (c) is not exhaustive.

(e) Any of the voting rights, preferences, limitations and relative rights of any class or series of shares authorized under this section may be made dependent upon facts ascertainable outside the charter; provided, that the manner in which such facts shall operate upon the voting powers, preferences, limitations and relative rights is set forth in reasonable detail in the charter.

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Cite this article: FindLaw.com - Tennessee Code Title 48. Corporations and Associations § 48-16-101 - last updated January 02, 2024 | https://codes.findlaw.com/tn/title-48-corporations-and-associations/tn-code-sect-48-16-101/

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