The Tennessee limited liability company (LLC) operating agreement is a legal document that outlines how the company will operate on a day-to-day basis and defines the status of each member within the company.
The LLC operating agreement, or business operating agreement, outlines the initial contribution of each member and their share in the company’s interests. If the members decide to manage the company personally, the document defines each member's managerial rights and duties.
Is an Operating Agreement Required in Tennessee?
No, an operating agreement is not required when forming an LLC in Tennessee.
However, many parties still choose to create an operating agreement when forming their LLC in order to optimize their business operations and minimize potential disputes between the company members.
4 Main Types of Operating Agreements
Before drafting the operating agreement, parties need to choose the type of document that suits their needs best:
Variety of Operating Agreements
Single-member LLC operating agreement: This type is used for companies with only one member. It has a simple form since it only provides how the company will be operated without regulating the relationships between members.
Multi-member LLC operating agreement: Here, the document regulates the operation of the company with two or more members. It also defines how the company will be operated.
Member-managed LLC operating agreement: Used in situations where members decide to manage their company personally.
Manager-managed LLC operating agreement: Here, the document provides the managerial rights and duties of a manager to whom the members have decided to delegate the day-to-day operation of the company.
Laws and Legal Requirements for LLC Operating Agreements in Tennessee
Title 48, Chapter 249 of the Tennessee Code, called the Tennessee Revised Limited Liability Company Act, regulates the status of LLCs in Tennessee.
Moreover, there are a few sections in the Tennessee Code that regulate the status of operating agreements in Tennessee:
Sections of Status Regulation
How to Form a Limited Liability Company (LLC) in Tennessee
Below, you can find the easiest way to form a limited liability company in Tennessee.
#1. Choose a Business Name For Your LLC
Before you submit the application to register your LLC in Tennessee, you should choose a business name for your company that is distinguishable from other business names registered in Tennessee.
The best way to make sure your business name is distinguishable is to visit the Secretary of State’s website and do a business name availability check.
#2. Choose the Type of LLC
In Tennessee, you can choose between two types of LLCs based on the place of their establishment:
Types of LLCs
Domestic LLCs: Used for companies that are both established and registered in Tennessee.
Foreign LLCs: Used for companies that are initially established outside Tennessee but are registered in Tennessee.
#3. Nominate an Agent
Here, you should appoint an agent who will receive official notices and documents on behalf of the company.
The registered agent must be:
An individual with a registered address in Tennessee.
An entity with the authority to operate in Tennessee.
#4. File the Registration Documents
Foreign LLCs should file the Certificate of Authority. This document can also be filed online or by filling out Form SS-4233. Foreign LLCs should also submit the Certificate of Existence issued by the state of the company’s initial jurisdiction, which is not older than two months.
#5. Pay the Required Fee
The filing fee is $50 per member of the company, with a minimum fee of $300 and a maximum fee of $3000.
If you are submitting your application online, the online system will guide you to the payment page, where you can pay using your credit card. If you are submitting your application via mail, you should write a check, attach it to your application, and send it to the following address:
Secretary of State, Snodgrass Tower, ATTN: Corporate Filing, 312 Rosa L. Parks AVE, Nashville, TN 37243
#6. Create your LLC Operating Agreement
After registering your company, you should create an operating agreement in which you will outline all the rules of operation for your company.