Articles of organization
In any Tennessee LLC formation process, articles of organization must be signed and delivered to the Secretary of State. State law requires that certain information be included in your articles of organization during the Tennessee LLC formation process. This information must include:
- The company name
- The street address, zip code and county of the registered office and the name of registered agent at that office;
- The name and address of each organizer
- A statement as to whether one or more members are personally liable for the debts of the LLC
- A statement as to whether the LLC will be board-managed or member-managed
- The number of members at the date of the filing of the articles
- 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 and/or that transfers of governance rights may be permitted only by consent of the governors or a subset of the governors, either of such provision(s) must be set forth in the articles or the articles must contain a statement that the operating agreement may so provide
- If the LLC’s existence is to begin at a future date or because of a specific event, the articles must state the future date or describe the happening of the specific event neither of which can be more than 90 days from filing
- The street address, zip code, and county of the principal executive office of the LLC
- If the LLC has the power to expel a member, a statement that such power exists
- The period of the LLC’s duration (this period may be perpetual or for a set amount of time)
- A statement that members or parties have pre-emptive rights
- If the LLC, although under Tennessee law, is not to engage in business in Tennessee, a statement prohibiting the LLC from engaging in business in Tennessee
- May contain a grant of authority to one (1) or more members, managers or governors to execute instruments for the transfer of real property, and any restrictions and conditions with respect to such authority
Your LLC is considered organized once the original articles of organization and one duplicate or conformed copy is delivered to the Secretary of State by one or more persons. The document must contain a statement which makes it clear that it is being filed pursuant to the Tennessee Limited Liability Company Act.
A filed document must be executed by an organizer if the LLC has not yet been formed or the directors or board have not been selected or by a fiduciary if the LLC is the hands of a receiver, trustee or other court appointed fiduciary. If the LLC has been formed or the directors or board has been selected, a filed document must be executed by the chair of the board of directors, by its president or other authorized manager if an LLC action is taken, by a general partner if partnership action is taken or by equivalent person of another business entity.
The filed document must include a signature by a member, manager, organizer or fiduciary (if the LLC is the hands of a receiver, trustee or other court-appointed fiduciary) and indicate the name and the title (capacity) of the person signing the document.
The document may contain:
- An attestation by the secretary or an assistant secretary;
- An acknowledgment, verification, or proof; or
- The date the document is signed, except that such date shall be required for the annual report for the secretary of state
Additionally, the Tennessee LLC formation procedure generally requires inclusion and/or consideration of the following:
Although not required, LLC members may adopt an operating agreement to regulate the internal affairs of the company, which may be amended or repealed as allowed by the agreement or applicable law.
A limited liability company must have one or more members. Requirements:
- Minimum Number of Members: One or more
- Eligibility Requirements: Natural person or Entity
- Procedure for Membership: A member may acquire an interest in the LLC upon the approval of all members or board of governors (as determined by the LLC) as to the new person or entity, the interest and the contribution and in accordance with the operating agreement or articles of organization
Resignation of Membership
Certain prohibitions exist surrounding the ability of a member to resign from the company.
- For LLCs formed prior to July 1, 1999, if the member events are eliminated as cause for dissolution in the operating agreement or articles, a withdrawal or termination shall be deemed wrongful
- If a member resigns or withdraws wrongfully:
- The member forfeits governance rights in the winding up, termination process or continued business
- The member is only entitled to receive the lesser of the fair market value of the member’s interest but if the LLC terminates, the member is entitled to receive the member’s distribution
- The member is entitled to his distribution or interest within 6 months of withdrawal
- The member is liable to all other members and the LLC for damages caused by the wrongful withdrawal
The contribution of a member to a limited liability company may be in cash, property, or services rendered or a promissory note.