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The Tennessee LLC operating agreement is a legal document that is recommended for Tennessee LLCs. This document allows the member(s) and/or owner(s) to distinguish and agree to responsibilities, financial benefits or obligations, and voting rights for both single and multi-member LLCs.

From TN Code § 48-202-101 (2019):

(30) “Operating agreement” means a written agreement described in § 48-206-101 among the members concerning the LLC;

Tennessee Operating Agreement Law

Per § 48-206-101 of the Tennessee Code:

(a) Generally. Each board-managed LLC shall have an operating agreement. A member-managed LLC may, but need not, have an operating agreement. If an LLC has an operating agreement, the operating agreement must be in writing. Except for those matters required to be provided for in the articles under chapters 201-248 of this title, an operating agreement may contain any rules, regulations, or provisions regarding the management of the business of the LLC, the regulation of the affairs of the LLC, the governance of the LLC, the conduct of its business, and the rights and privileges of members (financial rights, governance rights and membership rights of members), to the extent that such provisions are not inconsistent with the laws of this state or the articles. The operating agreement shall contain a statement of all membership interests in the LLC, which shall include, but not be limited to, the following:
(1) The identity of all of the members and their membership interests and the identity of all persons or entities bound by a contribution agreement or the owner of a contribution allowance agreement and the membership interest that will be acquired upon the satisfaction of the terms of such agreement;
(2) The amount of cash and a description and statement of the agreed value of any other property or services contributed for each membership interest;
(3) The amount and value of any contributions which any member or potential member has agreed pursuant to a contribution agreement to contribute and the time or times at which or events on the happening of which any additional contributions agreed to be made by any member are to be made;
(4) The amount and value of any contributions which any member or potential member has the right pursuant to a contribution allowance agreement to contribute and the time or times at which or events on the happening of which such contribution must be made or the right lapses;
(5) Any right of a member to receive, or of the LLC to make, distributions to a member;
(6) The time or times at which or events on the happening of which the LLC shall be dissolved, to the extent that any such matters are not set forth in the articles and are not identical to the statutory events of § 48-245-101;
(7) Any other provisions that are required by the terms of chapters 201-248 of this title to be included in an operating agreement and any provisions which the members wish to state in the operating agreement.
(b) Writing Constituting Operating Agreement. The operating agreement may consist of one (1) or more written agreements or counterparts that are, by express statements, intended to constitute and be a part of the operating agreement.
(c) Binding Effect. Unless otherwise provided in the articles or in an operating agreement adopted or agreed to by all members and holders of binding contribution agreements, an operating agreement that has been adopted or agreed to by the required vote of the members and person or entity bound by a contribution agreement shall be binding on the LLC and its members, and any person or entity becoming a member or entering into a contribution agreement or a contribution allowance agreement and such person shall be deemed to have adopted and agreed to it.

Forming an LLC in Tennessee

  1. Conduct a name search
  2. Choose a registered agent
  3. File formation articles
  4. Draft an operating agreement

To qualify as an LLC, all Tennessee LLCs need a legally registered business name, which must include a variation of:

  • LLC
  • L.L.C.
  • LC
  • L.C.
  • Limited Liability Company
  • Std. Liability Co.

The LLC name may include restricted words that relate to the business type or profession (university, attorney, bank) of the company, as long as a licensed practitioner is part of the LLC.

The name cannot include government agencies such as CIA, FBI, NSA, etc.

To conduct the name search, use the Tennessee Secretary of State Business Entity Search website.

Step 2: Choose Your Registered Agent

Every Tennessee LLC must appoint a registered agent for the company. The registered agent is responsible for accepting legal documentation on behalf of the company.

The agent must:

  • Be 18 years or older
  • Be available during business hours (9am – 5pm local time)
  • Be a resident of the state
  • Have a physical (not a P.O. Box) address in Tennessee

When using a registered agent service, the agent must be authorized to do business in Tennessee.

Step 3: File Your Formation Articles

In order to legally establish an LLC, you must file articles of formation. They can be filed through the mail or online, but online submissions can be processed more quickly.

The type of application you will file depends on whether you’re filing a new Tennessee LLC (domestic) or an existing business (foreign).

Domestic filers will complete Articles of Organization.

Online Filing (Domestic):

  • $50 fee per member (minimum $300 – maximum $3,000) plus online convenience fee of 2.29% when using a debit or credit card or $0.95 for an eCheck
  • Turnaround time: Within 1 business day
  • Submit online

Mailed Filing (Domestic):

  • $50 fee per member (minimum $300 – maximum $3,000)
  • Turnaround time: 3-5 business days upon receipt
  • Fill out the form online or after printing and mail to:

Secretary of State
Attn: Corporate Filing
6th Floor – Snodgrass Tower
312 Rosa L. Parks Avenue
Nashville, TN 37243

In-Person Filing (Domestic):

  • $50 fee per member (minimum $300 – maximum $3,000)
  • Turnaround time: 3-5 business days
  • Fill out the form online or after printing and deliver to:

Secretary of State
Attn: Corporate Filing
6th Floor – Snodgrass Tower
312 Rosa L. Parks Avenue
Nashville, TN 37243

Foreign formations must include a Certificate of Existence or Certificate of Good Standing dated within 2 months of the Certificate of Authority application.

Online Filing (Foreign):

  • $50 fee per member (minimum $300 – maximum $3,000) plus online convenience fee of 2.29% when using a debit or credit card or $0.95 for an eCheck.
  • Turnaround time: Within 1 business day
  • Submit online

Mailed Filing (Foreign):

  • $50 fee per member (minimum $300 – maximum $3,000)
  • Turnaround time: 3-5 business days upon receipt
  • Fill out the form online or after printing and mail to:

Secretary of State
Attn: Corporate Filing
6th Floor – Snodgrass Tower
312 Rosa L. Parks Avenue
Nashville, TN 37243

In-Person Filing (Foreign):

  • $50 fee per member (minimum $300 – maximum $3,000)
  • Turnaround time: 3-5 business days
  • Fill out the form online or after printing and deliver to:

Secretary of State
Attn: Corporate Filing
6th Floor – Snodgrass Tower
312 Rosa L. Parks Avenue
Nashville, TN 37243

Step 4: Draft a Tennessee Operating Agreement

While not required in Tennessee, it is highly recommended to create an operating agreement for LLCs. If it is drafted, it does not need to be filed with the state.

This legal documentation is recommended to document capital contributions, organization, voting rights, ownership percentage, responsibilities, profit and loss distribution, and more.

It can settle disputes between multiple directors or act as proof in court when signed and acknowledged by all parties involved, as all directors are required to sign off on provisions. It is recommended that all directors each keep a copy, and that a copy is held with the other business records until needed.