Tennessee § 43-38-502 - Termination of membership.

§ 43-38-502. Termination of membership.

A member always has the power to terminate membership by withdrawing at any time. Unless otherwise provided in this chapter, the articles or the bylaws, any other withdrawal or termination shall be deemed wrongful. Unless otherwise provided in the articles, a member may not be expelled. If, for any reason, the continued membership of a member is terminated: If the existence and business of the cooperative is continued, then the member whose membership has terminated loses all governance rights and will be considered merely an assignee of the financial rights, owned before the termination of membership; or Unless the articles or bylaws provide otherwise, if the existence and business of the cooperative is not continued, the member whose continued membership has terminated, except through wrongful withdrawal or wrongful termination, retains all governance rights owned before the termination of the membership and may exercise those rights through the winding up and termination of the cooperative. If a member withdraws in contravention of the articles or bylaws, then: The member who has wrongfully withdrawn forfeits governance rights in the winding up and termination process or in the continued business; and The member who has wrongfully withdrawn is liable to all the other members and to the cooperative to the extent damaged, including the loss of foregone profits, by the wrongful withdrawal. These damages may be offset against any amount to be paid to the wrongfully withdrawing or terminating by the cooperative. If the business and existence of the cooperative are continued, any withdrawing or terminating member, whether the withdrawal or termination was wrongful or otherwise, is entitled to receive, subject to subsection (d), the lesser of the fair market value of the withdrawing or terminating member's interest determined on a going concern basis or the fair market value of the withdrawing member's interest determined on a liquidated basis. Except as provided in subsection (d), if the business and existence of the cooperative are not continued, then any withdrawing or terminating member, whether the withdrawal or termination was wrongful or otherwise, is entitled to receive that member's distribution under § 43-38-1009. Except as provided in the articles or bylaws, any amount to which a withdrawing or terminating member is entitled under subsection (e) or (f) shall be paid to the withdrawing or terminating member within six (6) months of the determination of the amount. Notwithstanding other provisions in this section, the articles or bylaws may establish the amount to be paid a withdrawing or terminating member or a method for establishing the amount and may also establish the terms of payment of the amount. The established amount, or the method of determining the amount, and the established terms of payment shall control. Acts 2004, ch. 534, § 15.