Free Tennessee LLC Operating Agreement Template (Word)

Businesses of any size use Tennessee LLC operating agreement template to dictate explicitly how their business should operate. The operating agreement is a necessity from member listings to company policies when opening an LLC. The operating agreement content can protect you and/or your partners from personal liability whether its sole ownership or with multiple partners.

Table of Contents

Why operating agreement in Tennessee?

When starting your business, drafting an operating agreement along with your Articles of Organization makes all the difference. If you are in the state, getting a Tennessee LLC operating agreement is highly recommended. Here are the reasons that why you should make an operating agreement in Tennessee;

Assign ownership

The operating agreement highlights the ownership of the proposed company. The partners and staff have to follow this information. For the new company owner, there are also provisions if the previous owner leaves the business. You may also like Colorado LLC Operating Agreement Template.

Protect liability status

This agreement makes sure that from LLC the personal assets of the members of the company are separated. Most business owners and partners face this significant problem. The reason behind is that there’s no distinction among their assets and those of the business under state law.

Avoid default rules

You can set specific regulations guiding the operations of your business is another benefit to the operating agreement. Your rules never contradict the ones in Tennessee as each state has unique rules for LLCs.

Banking and investors

Before approving a loan or signing you up, financial institutions would need your business to have an operating agreement. It is the similar thing with investors. In a business, they don’t invest their money and they don’t perceive as legitimate. So, when applying for a loan or attracting juicy investors, having an operating agreement provides you a competitive advantage.

Verbal agreements

In the course of running a business, misunderstandings and disagreements are almost bound to occur. But, for clarification and direction, you can revert to the operating agreement.

State recommendation

By making an operating agreement, business owners and members may regulate their internal affairs.

Conflict prevention

There is a clash of interests in multi-member LLCs. The operating agreement is a comprehensive document. It will give business objectives, vision, and expectations. Whether single or multi-membered, operating agreements are important in running a business smoothly.

How do you write a Tennessee LLC operating agreement?

Here are the steps to follow while writing a Tennessee multi-member operating agreement;

Member information

After downloading the agreement, you have to write the document’s effective date and the members’ full names.

Information in sections

The members of LLC will decide on the following;

The distribution of profit and losses
Contributions
Their powers and duties
Employee payroll
Payment of expenses
Tax returns
Transfer of membership
Dissolutions

General provisions

Reviewing and updating the amendments, governing law, attorney fees, captions, notices, severability, and other effects are also expected from members. You may also see Virginia LLC Operating Agreement Template.

Member’s signature

All members have to submit their full names and attach their signatures to the document for the operating agreement to take full effect.

Notarization

Here, the notary public has to complete the remaining part of the document. They have to attach their signature, seal, and return it to the members. For record and reference purposes, every member must have a copy of the operating agreement. You should also check Georgia LLC operating Agreement Templates.