Tennessee Foreign Registration › Doing business
Doing business in Tennessee: when a foreign LLC has to register
Until it holds a certificate of authority, which costs from $300, a foreign LLC cannot transact business in Tennessee. The Act never defines transacting business outright. It carves out 11 named activities, among others, and the Attorney General has put the underlying test as whether the company's business in the state is merely casual or occasional, or some substantial portion of its ordinary business.
How Tennessee frames the question
The duty comes from T.C.A. 48-249-904(a). The exceptions in section 48-249-902 work as a safe list, and the Attorney General reads them together with the corporation list in 48-25-101(b), concluding that an entity that conducts only the listed activities need not obtain a certificate. Anything off the list falls to the general test of casual and occasional business against a substantial portion of ordinary business.
What the Act sets aside
The Act sets aside defending, settling or maintaining a proceeding, claim or dispute; meetings of members or representatives and other internal affairs; bank accounts; offices or agencies for the company's own securities; selling through independent contractors; soliciting or obtaining orders that need acceptance outside Tennessee to become contracts; creating or acquiring debt, deeds of trust, mortgages and security interests; securing or collecting debts and enforcing security interests; owning real or personal property without more; one transaction completed within a month and not part of repeated transactions of a like nature; and business in interstate commerce.
The rental-property proviso
The property item has a rider. For a reasonable time, managing and renting real estate acquired in enforcing a mortgage or deed of trust is also not transacting business, if the owner is trying to liquidate the investment and keeps no office or agency here other than an independent one. The rider is narrow; an LLC that buys a building to rent out is not described by it.
The exceptions, grouped
| Group | What does not count |
|---|---|
| Disputes and internal affairs | Handling a lawsuit, claim or dispute; gatherings of members or representatives and similar internal matters |
| Money | Bank accounts; offices handling the company's own securities; borrowing against real or personal property; collecting what is owed and enforcing the security taken for it |
| Selling | Sales made by independent contractors; orders that only become contracts on acceptance outside Tennessee |
| Property and one-offs | Owning property with nothing more; a stand-alone deal finished inside one month and not one of a run of look-alike deals; interstate commerce |
A member or manager that is itself an entity formed elsewhere is not transacting business in Tennessee solely because it holds that role in an LLC.
Applying the general test
For activity that is off the list, the Attorney General asks whether the company's business in the state is merely casual or occasional, or some substantial portion of its ordinary business. That test comes from a 1921 decision, Lloyd Thomas Co. v. Grosvenor, and the Attorney General applies it to foreign corporations and LLCs alike.
The list does not decide other laws
The Act describes its own list as open-ended and good only for deciding whether a certificate is needed. It says nothing about which contacts expose an LLC or its members to Tennessee process, tax or other regulation.
Scenarios against the list
The questions below test common situations against the text. The Act decides the exception cases, and the general test governs everything off the list. A Tennessee business lawyer can apply either test to your facts.
Scenarios
Our only Tennessee contact is a bank account.
Bank accounts are one of the named exceptions.
Our Tennessee sales go through independent contractors.
That is another listed activity.
Customers in Tennessee send orders that we accept at home.
Orders that become contracts only on acceptance outside the state are on the list.
We did one job here and finished within a month.
A single deal wrapped up within one month, and not part of repeated deals of the same kind, is on the list.
We own a building in Tennessee and rent it out.
Bare ownership of property is an exception. Whether renting it out goes further turns on your facts.
We hold a membership interest in a Tennessee LLC.
An entity formed elsewhere is not transacting business solely because it is a member or manager of an LLC.
An employee works from home in Tennessee.
Employees are not on the list, so the general test applies.
Does the list also protect us from Tennessee tax?
No. The list answers only whether a certificate is needed; process, tax and other rules are separate questions.
We store goods in a Tennessee warehouse.
Storage is not on the list, and the general test looks at how large a part of the business it is.
Why the safe list matters
A company whose only Tennessee activity sits on the list does not need a certificate, so the fine and the lawsuit bar, which both attach to transacting business without one, do not come into play. The Attorney General's opinion treats the corporation list and the LLC list as one test.
What waiting costs
A company that transacts business without a certificate cannot bring a proceeding in any Tennessee court, and it owes a fine of 3 times the filing fee for each year or part of a year. The late fine page runs the numbers.
Corporations
A foreign corporation reads T.C.A. 48-25-101 instead, whose list the Attorney General treats alongside the LLC list. The corporation page covers its filing.
If the company is over the line
File. The registration guide walks through SS-4233, and the application page covers each item.
What you pay
Register in Tennessee
- SS-4233, completed from your answers
- A home certificate requested to fit the two-month window
- A Tennessee registered agent, either from us or of your choosing
- The filed application, returned to you as your certificate
- Renewal: after the first year, the agent service renews at $149 a year
$199
+ from $300 Tennessee fee
The Tennessee fee for an LLC starts at $300 and rises with the member count; checkout prices your count on its own line. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Sources
- Tennessee Secretary of State, business forms and fees
- Tennessee Code Annotated 48-249-1007, LLC filing fees (General Assembly bill text restating the section)
- Tennessee Revised Limited Liability Company Act, foreign LLC provisions (Public Chapter 286)
- Tennessee Secretary of State, business FAQs
- Tennessee Secretary of State, business services
- Form SS-4233, application for certificate of authority, foreign limited liability company
- Form SS-4431, application for certificate of authority, foreign for-profit corporation
- Tennessee Attorney General opinion 18-28, certificates of authority
Doing business in Tennessee?
Order now and we prepare and file before another year of fine builds up.