The first step in filling out the Tennessee Operating Agreement is to pick a business name.

There are a few requirements when choosing a Tennessee LLC name.

1. An LLC name should be different from other existing business names. If the name of your LLC is being used and the current name registrant provides written consent for you to use that name, you would still be able to use it. You can verify name availability by doing a Tennessee LLC name search with the Tennessee Secretary of State to be sure the LLC name is available.

2. The name of the LLC must include one of the following entity identifiers at the end of the business name:
– Limited Liability Company
– L.L.C.
– LLC

Enter the LLC name, including the identifier, to continue.

There are a few other questions to answer in this section.

In Formation Locale, you can choose from a Domestic Tennessee Business or a Foreign Business. If you are starting your first LLC, you would choose Domestic. The Foreign LLC selection is for someone who has an LLC in another state but wants to begin physically operating in Tennessee.

Then you have choices under “Additional Designation.” This is not a common section to fill out for many LLCs, but this section would be used if the LLC has any additional designations, such as:

– Bank
– Captive Insurance Company
– Insurance Company
– Litigation Financier
– Non-profit Limited Liability Company
– Professional Limited Liability Company (PLLC)
– Trust Company

The most common selection may be the Professional LLC, which is a business that requires occupational licensing in Tennessee, such as an accountant, architect, veterinarian, etc.

If the name of the LLC contains the word “bank”, “banks”, “banking”, “credit union” or “trust”, written approval must first be obtained from the Tennessee Department of Financial Institutions.

If the LLC’s name contains the phrase “insurance company,” written approval must first be obtained from the Tennessee Department of Commerce & Insurance.

The Tennessee Articles of Organization is the official document filed with the Tennessee Secretary of State, Business Services Division to establish an LLC. After the filing is approved by the state, the business can officially begin operating and register for the necessary business licenses and permits.
 
To file the Tennessee Articles of Organization, you will need to submit the completed SS-4270 LLC Articles of Organization form to the Tennessee Secretary of State. The form can be completed and sent by mail or filed online.
 
Last is the checkbox to form a Series LLC. A Series LLC provides liability protection across multiple asset groups or businesses, each of which would be protected from liabilities from the other series. The Series LLC is not a common choice and is more commonly used with real estate investment companies where they register for one LLC, but put each property in its own “series.” If a tenant sues the LLC, only the affected property is at risk, rather than all of the properties.

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In the next step, we will fill out information related to the LLC.

Period of Duration

To start with, we have business entity properties. The first one asks for the period of duration. The Period of Duration refers to the length of time the LLC is to exist.

Most LLCs will be perpetual as most people don’t have a set date to close the business. However, if there is a predetermined date, the LLC will close, check the box, and enter the date. This is more common for investment-related entities.  

Fiscal Year Close

Next is the fiscal year close. This section asks what month the LLC will use for its ending tax month.  Most LLCs will use December.

If you aren’t sure, be sure to work with your accountant or entity formation service.

Effective Date

Then, there is an option to choose an effective start day up to 90 days in the future.

Some will delay the effective date (starting date) of the LLC if they aren’t ready to start the business, but want the filing out of the way or if they are close to the end of a calendar year and won’t begin any activities until the following year.

By default, the effective date is the day the Secretary of State files the formation paperwork. Otherwise, enter a different start date.

LLC Management
The next field provides information regarding whether the LLC is Manager-Managed, Member-Managed, or Director-Managed.

A Member-Managed LLC means the Members are involved with the day-to-day operations of the business. Many LLCs are operated and run by the owner, in which case would be Member-Managed.
A Manager-Managed LLC refers to a Limited Liability Company that hires a manager to run the business, similar to hiring a CEO of a corporation.
If the LLC will be Manager-Managed, check the box and enter the Manager’s name and address.
A Director-Managed LLC has a board of directors that makes the decisions for the business entity. 

Obligated Member Entity
If the entity chooses Obligated Member Entity status, read the statement and check the box to certify.

An Obligated Member Entity provides its members unlimited liability protections.

If you aren’t sure how to answer this question, be sure to work with an attorney or entity formation company

The last section in step 2 is to address other provisions. This is an optional section should additional information regarding the operation or regulation of the LLC needs to be included.

Also, if this LLC is prohibited from engaging in business in Tennessee, the checkbox will need to be checked.

One requirement to have an LLC in Tennessee is to appoint a Tennessee registered agent. The registered agent is a party that is physically located in the state of Tennessee that will receive important notices and service of process (which means to accept papers that start a lawsuit) on behalf of the LLC.

Provided the LLC member lives in the state of Tennessee and is generally available during business hours, they may act as the registered agent. Additionally, any adult resident of the state, attorney or accountant in the state, or a registered agent service can also act as the LLC’s agent.

Related: Should you be the registered agent?

The address of the Principal Office may be, but is not required to be, the actual place of the business. It can also be the main location where the business records are kept.

A physical address in the state of Tennessee must be used for the Principal Office as P.O. Boxes are not acceptable.

An email address is also required. Be sure to use an email that you check frequently, as the state will send reminders, such as the Tennessee LLC annual report, to this address.

A separate mailing address from the Principal Executive Office can optionally be included for the LLC. This is the address the Secretary of State could use to send correspondence.

A PO Box can be used for the mailing address and can be an out-of-state address.

Review the information that was submitted in the Articles of Organization to be sure everything is correct. If so, click Continue.

Last, an authorized LLC Member will sign the Articles of Organization to ensure they are correct, sign the document, and then submit payment.