Tennessee § 48-241-111 - Standard of conduct.

§ 48-241-111. Standard of conduct.

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. 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: 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 Legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence. 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. 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. 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. Acts 1994, ch. 868, § 1; 1995, ch. 403, § 65. Law Reviews. Delaware LLCs for Tennessee Lawyers? (Richard Spore), 35 Tenn. B.J. 27 (1999).