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Tennessee LLC Governance Blueprint – Editable Agreement Template
The establishment of an LLC in Tennessee is a good idea for businessmen who are willing to organise their business. Once the Articles of Organisation are passed by the board, the next document your company will need is an LLC operating agreement, which will describe the way your company is going to be run, how the decision-making process will work, and how the financial interests will be distributed. This paper is transformed into a central point of reference for smooth operations and forward-reaching governance.
Internal Structure Under Tennessee’s LLC Framework
The state offers a loose legal framework that allows the members to develop their internal regulations. You may contract orally or by implication unless your articles demand to the contrary.
In the event of the absence of customised terms, the standard guide is Title 48, Chapter 249 of the Tennessee Revised LLC Act.
A written contract is helpful to offer some assurance, avoid confusion and avoid rules of one size fits all.
How Roles and Responsibilities Are Organised?
Telling how your team allocates responsibilities is described in an effective internal document. Standard components include:
Ownership percentages
Defined management roles
How profits and losses flow
Decision-making processes
How members and managers are appointed or removed
Dispute resolution or winding-up procedures.
Businesses in the state utilise these set guidelines to ensure that their operations remain steady.
Choosing the Right Management Model
Tennessee allows two distinct structures:
Member-Controlled Setup
Members participate in daily operations. Duties and decision-making power are shared equally. Routine matters are approved by a majority vote.
Manager-Controlled Setup
Managers handle daily tasks. Major decisions are reserved by the members. Manager activities should be within the standards of loyalty, care and good-faith.
In Tennessee, board-managed model LLCs must document management rules, therefore written agreement is necessary.
Key Areas Your LLC Agreement Should Address
To support smooth business operations, your internal agreement should cover:
Voting thresholds for regular and high-impact decisions
Financial contributions and distribution rules
Member withdrawal or admission procedures
Conflict-of-interest handling
Recordkeeping expectations
How amendments to the agreement will be adopted
Solving these areas aids in saving the business and the members involved from unnecessary disagreements.
Decision-Making Framework and Voting Rules
When your LLC agreement is silent, state defaults apply:
All members have equal voting power.
Majority approval resolves standard matters
Managers hold equal voting rights in a manager-managed structure.
Certain actions—such as amendments or major transactions—may require broader approval depending on your terms.
Defining clear voting pathways keeps your company structured and efficient.
Standards of Conduct for Members and Managers
Tennessee enforces baseline duties that cannot be fully waived:
Loyalty to the company
Caution, without gross negligence, wanton conduct, wilful misconduct, or awareness of lawbreaking.
Good faith and fair dealing in all matters
Conflict-of-interest transactions may still be approved if properly disclosed and cleaned under statutory procedures.
Recordkeeping and Access to Information
The company records are supposed to be reasonably accessible to the members, provided there are procedures as your operating agreement provided.
The recording of these rights keeps everyone informed, and also transparency is maintained.
When to Update Your LLC operating Agreement?
Review and revise your internal document when key aspects of the business change, such as:
Adding or removing members
Adjusting ownership percentages
Altering the management structure
Modifying distribution arrangements
Preparing for expansion or winding up the company
Keeping the terms current ensures they always reflect the real-world functioning of the LLC.
Why Every Tennessee LLC Should Maintain a Written Agreement?
Even though Tennessee does not insist on the existence of a written version of an LLC, having one enhances the level of clarity within the organisation, secures the interests of the members, and creates an impression of professionalism to financial institutions and partners.
This can be a good guide to any person who intends to come up with a limited liability company operating agreement form that is up to state standards.
Frequently Asked Questions
1. Does Tennessee require an LLC operating agreement?
No, except for board-managed LLCs, which must have one.
2. Is a written version necessary?
Some are necessary according to law, but it is highly advisable to avoid confusion and secure protection.
3. Do single-member LLCs need one?
Yes, they may adopt a single-member agreement to separate personal and business matters.
4. Is the agreement filed with the state?
No. It remains part of your internal records.
5. Can we revise it later?
Yes, as long as revisions follow the amendment rules stated in your agreement.
Download Your Tennessee LLC Agreement Template
This flexible Tennessee LLC form assists in shaping management policies, ownership and major processes that ensure your company operates within legal boundaries and is well structured.
You can have your version downloaded from this website, tweaked and finalised today in order to create a strong base for your business.