Incorporation Of LLC Tennessee

ORGANIZING AN LIMITED LIABILITY COMPANY IN TENNESSEE

One or more individuals may act as organizer(s) of an LLC by filing articles of organization with the Division of Business Services. Unless a delayed effective date is specified, the LLC is formed and its existence begins on the date that articles are filed with the Division of Business Services. The file date is the date the articles are received and officially date and time stamped by the Division of Business Services, regardless of the method of delivery.

An LLC engaging in a business that is subject to regulation under another Tennessee statute may organize under the provisions of the Tennessee Limited Liability Company Act only if permitted by, and subject to all limitations of the other statute.

LLC NAME

As part of the organization process, a name for the new LLC must be chosen first. An LLC name must contain the words "limited liability company" or the abbreviation "L.L.C.," or "LLC," or words or abbreviations of like import in another language (provided they are written in roman characters or letters). In the case of a foreign LLC, the name may contain instead the designations allowed by the jurisdiction in which the foreign LLC was formed or organized.

The name of an LLC or foreign LLC cannot contain the word "corporation" or "incorporated" or an abbreviation of either or both of these words.

An LLC's name must be distinguishable from any other name on file with the Division of Business Services. The name must be distinguishable from the names of other existing Tennessee limited liability companies, corporations, both for-profit and nonprofit, limited partnerships, limited liability partnerships, assumed names and any name that has been reserved or registered for use in this State.

The Division of Business Services reviews a proposed LLC name only to determine whether the name is distinguishable on its face from all other active, reserved and registered names on record in its corporate management database and satisfies the filing requirements under the Tennessee Limited Liability Company Act. The Division's action in determining name distinguishability is ministerial and does not serve to insure, regulate or license the use of such a name.

In general, a name is distinguishable from other names if it contains one or more different letters, and/or words, or it has a different sequence of letters and/or words, from all other active, reserved and registered names in the Division's corporate management system database. Differences between singular and plural forms of words are distinguishing.

A name is not distinguishable by using required ending words such as "incorporated," "corporation," "company," "limited," "limited liability company," "limited partnership," "limited liability partnership" or abbreviations of such words.

A name is not distinguishable by differences in punctuation or capitalization, or the presence or absence of articles, conjunctions or prepositions as symbols or words (including "the," "a," "and," "of," "in," "at" and "plus").

In determining whether a name is distinguishable on its face from other names, the Division of Business Services compares the proposed name to other names listed in its corporate management system database, and makes no review of other databases, such as state and federal trademarks.

In determining whether a name is distinguishable on its face from other names, and in determining whether an LLC name satisfies the filing requirements under the Tennessee Limited Liability Company Act, the Division of Business Services makes no determination as to whether the use of a name constitutes unfair competition, unfair trade practice, or name infringement with other businesses already in existence.

A preliminary check for name availability needs to be made by using the Business Name Availability. This preliminary check is not a statutory requirement, does not guarantee that the name will be deemed distinguishable at the time of filing, and does not convey any rights to the use of the name.

An applicant can request to use a name that is not distinguishable from the name used by an existing business under the following circumstances:

  1. By submitting an application to use an indistinguishable name, accompanied by payment of an additional $20 filing fee. The application must include a written consent that is executed by a person authorized to act for the existing business and indicates that the existing business
    1. consents to the use of the name by the applicant LLC and
    2. agrees to change its own name to a distinguishable name (or to terminate its existence/withdraw its certificate of authority) within 60 (sixty) days;
  2. By submitting a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant corporation's right to use the name applied for in Tennessee; or
  3. By submitting an application to use an indistinguishable name, accompanied by payment of an additional $20 filing fee. The application must include a written consent indicating that
    1. the existing business and the applicant are under common control,
    2. the existing business consents to the use of the name by the applicant and
    3. both the existing business and the applicant agree to use the same registered agent and registered office.
  4. An LLC's name cannot contain language stating or implying that:
    1. The LLC transacts or has power to transact any business for which authorization is required under Tennessee law, unless the appropriate commission or officer has granted such authorization and certifies that fact in writing; or
    2. The LLC is organized as, affiliated with, or sponsored by any fraternal, veterans, service, religious, charitable or professional organization, unless that fact is certified in writing by the organization with which affiliation or sponsorship is claimed; or
    3. The LLC is an agency or instrumentality of, affiliated with or sponsored by the United States or the State of Tennessee or a subdivision or agency thereof, unless such fact is certified in writing by the appropriate official of the governmental entity; or
    4. The LLC is organized for a purpose other than that permitted by the code and the articles of organization.
  5. If the LLC's name contains the word "mortgage," "bank," "banks," "banking," "credit union," or "trust," written approval must be first obtained from the Tennessee Department of Financial Institutions before documents can be accepted for filing with the Division of Business Services.
  6. The use of the word 'cemetery' in a company name must be approved in writing and in advance by the Tennessee Department of Commerce & Insurance if the business relates to a cemetery for humans.
  7. A name may be reserved prior to organization by filing an application for reservation of LLC name with the Division of Business Services.

RESERVED NAME

If the proposed LLC name meets the name requirements as per the Code and is available, the name is reserved for the applicant's exclusive use for a period of four calendar months. At the end of four months, the same party or any other party may apply to reserve the same name.

The Division of Business Services provides form #SS-4228 for an application for reservation of name. The filing fee for reserving, transferring or canceling a name is $20.00.

ARTICLES OF ORGANIZATION

The articles of organization are sometimes referred to as "articles" and set forth following items for an individual or a group of individuals to form an LLC:

  1. An LLC name that satisfies the name requirements;
  2. The street address and zip code of the LLC's initial registered office located in Tennessee, the county in which the office is located, and the name of its initial registered agent at that office;
  3. The name, street address and zip code of each organizer;
  4. If one or more members will be personally liable for all of the debts, obligations and liabilities of the LLC, information setting forth the specific names of such members (the specifically identified members must also sign the articles);
  5. A statement as to whether the LLC will be board-managed or member-managed;
  6. The number of members at the date of the filing of the articles;
  7. If the LLC is board-managed, and dissolution events may be triggered by an action approved by the governors or a subset of the governors, such a provision must be set forth or the articles must contain a statement that the operating agreement may so provide;
  8. If the LLC is board-managed, and transfers of governance rights may be permitted only by consent of the governors or a subset of the governors, such a provision must be set forth or the articles must contain a statement that the operating agreement may so provide;
  9. If the existence of the LLC is to begin upon a future date or the happening of a specific event, a statement regarding the future date or description of the happening of the specific event (In no event can the future date or the actual occurrence of the specific event be more than ninety days from the filing of the articles of organization);
  10. The street address and zip code of the principal executive office of the LLC and the county in which the office is located;
  11. If the LLC has the power to expel a member, a statement that such power exists;
  12. If the duration of the LLC is to be limited to a specific period of time or term of years, a statement indicating such limitation and the future date on which dissolution is to occur or the term of years;
  13. If the members or parties (other than the LLC) to a contribution allowance agreement have preemptive rights, a statement that such rights exist; and
  14. If the LLC, while being formed under Tennessee law, is not to engage in business in Tennessee, a statement that the LLC is prohibited from engaging in business in Tennessee.

The articles of organization may set forth other items such as

  1. the names of LLC members,
  2. the purpose of the LLC,
  3. the names of LLC management, and
  4. provisions regulating the affairs of the LLC.

The articles need not set forth any of the general LLC powers provided in the Tennessee Limited Liability Company Act.

If the effective date of formation of the LLC is later than the date of filing of the initial articles of organization, the organizers or any member may, within thirty days after the date of actual formation, file with the Division of Business Services a certificate of formation that states that the LLC was formed and the date of formation.

If a certificate of formation is not filed within one hundred twenty days from the date of initial filing of the articles, the presumed effective date of the formation is the ninetieth day following the date of filing of the articles.

As a general rule, the filing of the articles of organization (and the filing of a

certificate of formation, if applicable) with the Division of Business Services is conclusive proof that the organizers satisfied all conditions precedent to formation, except in a proceeding by the State to cancel or revoke the formation or existence of the LLC or to dissolve the LLC involuntarily.

The Division of Business Services provides form #SS-4449 for filing articles of organization, and form #SS-4232 for filing a certificate of formation.

Filing Fee

  1. The filing fee for articles of organization is $50.00 per member in existence on the date of the filing, with a minimum fee of $300.00 and a maximum fee of $3,000.00. If its articles of organization prohibit the LLC from doing business in Tennessee, the filing fee is $300.00, regardless of the number of members in existence on the date of the filing. The filing fee for a certificate of formation is $20.00.