Tennessee § 48-52-106 - Bylaws — Limitations on liability.

§ 48-52-106. Bylaws — Limitations on liability.

The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation. The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the charter. The bylaws may contain a provision permitting or requiring indemnification of a director for liability to any person for any action taken, or any failure to take any action, as a director, except liability for: Receipt of a financial benefit to which the director is not entitled; An intentional infliction of harm; A violation of § 48-58-302 (unlawful distribution); or An intentional violation of criminal law; and For purposes of this subsection (c): “Liability” means the obligation to pay a judgment, settlement, penalty, fine, including excise tax assessed with respect to an employee benefit plan, as reasonable expenses incurred with respect to a proceeding; and “Proceeding” includes a threatened, pending or completed proceeding. The liability of a director of a nonprofit corporation that is not a public benefit corporation may be eliminated or limited by a provision of the bylaws that a director shall not be liable to the corporation or its members for money damages for any action taken, or any failure to take any action, as a director, except liability for: The amount of a financial benefit received by the director to which the director is not entitled; An intentional infliction of harm; A violation of § 48-58-302; or An intentional violation of criminal law. Acts 1987, ch. 242, § 2.06; 2014, ch. 899, § 20. Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 5-1502, 5-1503, 5-1602, 5-1603. Tennessee Jurisprudence, 7 Tenn. Juris., Corporations, § 17.