Find out how to qualify your LLC to conduct business in Tennessee.
If you own a company that was founded in a state other than Tennessee, you must qualify or register it in Tennessee in order to conduct business there. The requirements for qualifying your international (non-Tennessee) limited liability corporation (LLC) to conduct business in Tennessee are summarized below.
What exactly is a Foreign LLC?
If your LLC was founded in another state, it is referred to as a foreign LLC in Tennessee. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in North Dakota, for example, is a foreign LLC in South Dakota.
Doing Business in Tennessee
If you are “transacting business” in Tennessee, you must register your foreign company with the state, according to Tennessee’s LLC Act. What exactly does this mean? As with other states, Tennessee’s LLC Act does not define the word “transacting business” in connection to international registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Tennessee’s LLC Act, like other states’, outlines specific actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts
Check this Tennessee Secretary of State (SOS) FAQ page or Section 48-246-102 of the Tennessee Code for the exact legal explanation of each of these things. If your LLC’s only operation in Tennessee is one or more of the activities mentioned above, you should not be required to register with the state.
Authority Certificate
You must submit an Application for Certificate of Authority: Limited Liability Company with the SOS to register your overseas firm in Tennessee. The form may be downloaded on the SOS website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. However, since each state is unique, there may be materials that Tennessee requires that you did not need to submit when you initially formed your LLC. In particular, for a Tennessee Certificate of Authority, you must provide:
the name of your limited liability company (and, if different, the name under which you want to obtain your Certificate of Authority)
the name of the state in where your LLC is formed
the day you established your LLC
the date you began doing business in Tennessee any other name or designation for your LLC (such as an assumed or fictitious name)
the month in which your LLC’s fiscal year concludes the Certificate of Authority how your LLC is administered (member-managed, manager-managed, director-managed, etc.)
the number of LLC members on the filing date the term of your LLC (which may be perpetual)
the address of your LLC’s major office, which must be a street address; and, if different from the principal office location, the address of your LLC’s mailing address.
extra details if your LLC is a professional or non-profit entity
an indication of whether LLC members are to be held personally accountable for LLC debts, duties, and liabilities, and an approved signature.
The name of your LLC must be distinct from other business organizations currently established in Tennessee. The application may be sent or dropped off at the Secretary of State’s office. The filing cost is $50 per member, dependent on the number of members on the date of filing, with a $300 minimum and a $3,000 maximum.
What Happens If You Don’t Register?
If your LLC does business in Tennessee without a Certificate of Authority, it cannot file a lawsuit. Furthermore, if your LLC transacts or does business in Tennessee without authorization, it may be fined, and no Certificate of Authority will be recognized until the penalties are paid. However, the lack of a valid Certificate of Authority does not render any of your LLC’s contracts void or prevent your LLC from defending a case in the state.
Forming a Foreign Corporation
The regulations and standards for international qualifying in Tennessee are identical whether your company is structured as a corporation rather than an LLC. However, you must use a separate application form, Application for Certificate of Authority For-Profit Corporation (SS-4431). For paperwork, information, and filing requirements for registering a foreign company in Tennessee, see the Tennessee Secretary of State’s website.