§ 48-61-117 — Approval of conversion of a domestic nonprofit corporation to a domestic or foreign for-profit corporation

In the case of a conversion of a domestic nonprofit corporation to a domestic or foreign for-profit corporation: (1) The plan of for-profit conversion must be adopted by the board of directors; (2) After adopting the plan of nonprofit conversion, the board of directors must submit the plan to the members for their approval if there are members entitled to vote on the plan. The board of directors must also transmit to the members a recommendation that the members approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to the members the basis for that determination; (3) The board of directors may condition its submission of the plan of for-profit conversion to the members on any basis; (4) If the approval of the members is to be given at a meeting, the corporation must notify each member of the meeting of members at which the plan of for-profit conversion is to be submitted for approval. The notice must state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the charter as it will be in effect immediately after the for-profit conversion and full text copy of the bylaws and other organic documents as they will be in effect immediately after the for-profit conversion; (5) Unless chapters 51-68 of this title, the charter, or the board of directors acting pursuant to subdivision (3) requires a greater vote or a vote by voting groups, the plan of for-profit conversion to be authorized must be approved by each voting group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on the plan by that voting group; and (6) If any provision of the charter, bylaws, or an agreement to which any of the directors or members are parties, adopted or entered into before January 1, 2015, applies to a merger of the corporation and the document does not refer to a for-profit conversion of the corporation, the provision shall be deemed to apply to a for-profit conversion of the corporation until such time as the provision is amended on or subsequent to January 1, 2015.

Legislative History

Added by 2014 Tenn. Acts, ch. 899, s 72, eff. 1/1/2015.