Tennessee § 43-38-904 - Liability for unlawful distribution.
Full text of Tennessee Tennessee Code Annotated § 43-38-904 — Liability for unlawful distribution., with citation guidance and answers to common questions.
§ 43-38-904. Liability for unlawful distribution.
Unless the member or director complies with the applicable standards of conduct set forth in § 43-38-616, a member or director who votes for or assents to a distribution made in violation of § 43-38-903 or the articles or bylaws is personally liable to the cooperative for the amount of the distribution that exceeds what could have been distributed without violating § 43-38-903 or the articles or bylaws. A director or member held liable for an unlawful distribution under subsection (a) is entitled to contribution: From every other director and member who voted for or assented to the distribution; and From each member for the amount the member accepted, knowing the distribution was made in violation of § 43-38-903 or the articles or bylaws. Subject to subsection (d), this section shall not affect any obligation or liability of a director or member under the articles or bylaws or other applicable law for the amount of a distribution. Unless otherwise agreed, a member who receives a distribution from a cooperative or an officer or director who votes for or assents to the distribution shall have no liability under this section or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution. Acts 2004, ch. 534, § 29.
Source: official Tennessee text · Last verified 2026-08-27
Frequently Asked Questions About Tennessee § 43-38-904
What does Tennessee Code Annotated § 43-38-904 cover?
Section 43-38-904 ("Liability for unlawful distribution.") is part of the Tennessee Code Annotated, the codified statutory law of Tennessee. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Tennessee § 43-38-904?
A common citation format is "Tennessee Code Annotated § 43-38-904" (Tennessee). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Tennessee law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Tennessee official source linked on this page or consult a licensed Tennessee attorney.
How does Tennessee § 43-38-904 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Tennessee can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Tennessee.