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Tennessee Code Title 48. Corporations and Associations § 48-241-111

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(a) GENERAL.  A manager shall discharge the duties of an office in good faith, in a manner the manager reasonably believes to be in the best interests of the LLC, and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.  Notwithstanding anything to the contrary in this section, the articles or operating agreement may define the standard of conduct of the managers in a manner to reflect the understanding of the parties;  provided, that such definition is not manifestly unreasonable under the circumstances.

(b) RELIANCE PERMITTED.  In discharging such duties, a manager is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(1) One (1) or more managers or employees of the LLC whom the member reasonably believes to be reliable and competent in the matters presented;  or

(2) Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence.

(c) WHERE RELIANCE NOT PERMITTED.  A manager is not acting in good faith who has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted.

(d) LIMITATION ON LIABILITY.  A manager is not liable for any action taken as a manager, or any failure to take any action, if the manager performed the duties of the office in compliance with this section.

(e) EFFECT OF DELEGATION.  A person exercising the principal functions of an office or to whom some or all of the duties and powers of an office are delegated pursuant to § 48-241-110 is considered a manager for purposes of this section.

Cite this article: - Tennessee Code Title 48. Corporations and Associations § 48-241-111 - last updated January 01, 2020 |

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