Tennessee Limited Liability Company Law

Tennessee limited liability companies must register with the state.

Limited liability companies, typically referred to as LLCs, are specific kinds of legal entities that are recognized through state laws. Tennessee allows for limited liability companies and imposes specific restrictions on them as well as grants them specific protections and rights. The Tennessee LLC laws are complicated, and understanding them often requires the assistance of an experienced attorney.

Requirements

The Tennessee Secretary of State's office states that one or more people can form a Limited Liability Company by filing the appropriate articles of organization with the state's Department of Business Services. Any business that registers as a limited liability company must include those words in the company name, or the abbreviations "LLC," "L.L.C." or any similar abbreviations that let anyone reading the name know it is registered as an LLC.

Filing

A company must include in its application to become an LLC specific information as detailed in Tennessee Code Annotated section 48-249-202. The statute requires that an applicant include information such as the name of the business, the address of the principal office, whether the LLC will be managed by members, managers or directors and the number of members the LLC has if the organization has more than six members.

Operating Agreement

Tennessee Code Annotated section 48-249-203 states that the members of an LLC, unless otherwise prohibited by state law, can enter into a membership or operating agreement. This is an optional provision, and LLCs do not have to have such operating agreements to be formed or operate. The LLC and its members can adopt an operating agreement at any time before or after filing articles of organization. These agreements do not need to be in writing.

Liability

A benefits of forming an LLC in Tennessee is the added liability protection the business structure provides. Tennessee Code Annotated section 48-249-114 states that the debts and obligations incurred by the LLC are solely those of the business, meaning the owners or managers of the LLC are not personally liable for such debts. This is significantly different from, for example, a general partnership where the owners are personally liable for such debts.

References

• Tennessee Society of Certified Public Accountants: A Primer on The Tennessee Revised Limited Liability Company Act: A Primer on the Tennessee Revised
• Tennessee Secretary of State: Filing Guide for Limited Liability Companies
• Justia: Tennessee Code Annotated Section 48-249-202; Articles of Organization
• Justia: Tennessee Code Annotated Section 48-249-203; Operating Agreement
• Justia: Tennessee Code Annotated Section 48-249-114; Personal Liability