Establishing secure connection…Loading editor…Preparing document…

Tennessee LLC Sample Operating Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

LLC Sample Operating Agreement

TN-00LLC-1

Read carefully and make appropriate changes to suit your individual needs and purposes.

SPECIAL NOTE

This agreement is a sample operating agreement and should be modified to meet your needs. In Tennessee you have a choice of managing your LLC - either by Member management, Manager management, or Board of Directors management. You may want to seek professional advice before deciding how the LLC will be managed, especially if you want to use a type of management other than Member management, which is the simplest form.

See: Tennessee Code, Title 48, Chapter 249 for specific statutes which control operations.

OPERATING AGREEMENT

OF

A TENNESSEE LIMITED LIABILITY COMPANY

THIS OPERATING AGREEMENT ("Agreement") is entered into the day of , 20 , by and between the following persons:

1.

2.

3.

4.

hereinafter, ("Members" or “Parties”).

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the Parties covenant, contract and agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

1. Formation of LLC. The Parties have formed a limited liability company named ("LLC").

2. Articles or Organization. The Members acting through one of its Members, , filed Articles of Organization, ("Articles") for record in the office of the Tennessee Secretary of State on , thereby creating the LLC.

3. Business. The LLC's activities shall be conducted in compliance with all applicable provisions of the TENNESSEE CODE as well as any various regulations, restrictions, and rules, current and future, of any authority having legal jurisdiction.

4. Registered Office and Registered Agent. The registered office and place of business of the LLC shall be and the registered agent at such office shall be .

5. Duration. The LLC will commence business as of the date of filing and will continue in perpetuity.

6. Fiscal Year. The LLC's fiscal and tax year shall end December 31.

ARTICLE II

MEMBERS

7. Initial Members. The initial members of the LLC, their initial capital contributions, and their percentage interest in the LLC are:

Initial Members Percentage Interest in LLC Capital Contribution

8. Additional Members. New members may be admitted only upon the consent of a majority of the Members and upon compliance with the provisions of this agreement.

ARTICLE III

MANAGEMENT

9. Management. The Members have elected to manage the LLC as follows (check as appropriate):

The management of the LLC shall be vested in the Members without an appointed manager.

The Members hereby delegate the management of the LLC to a Manager.

The Members hereby delegate the management of the LLC to a Board of Directors.

10. Officers and Relating Provisions. In the event the Members elect to manage the LLC, rather than appointing a Board of Directors, the Members shall appoint officers for the LLC and the following provisions shall apply:

Officers. The officers of the LLC shall consist of a president, a treasurer and a secretary, or other officers or agents as may be elected and appointed by the Members.

11. Member Only Powers. Notwithstanding any other provision of this Agreement, only a majority of the Members may: (a) sell or encumber any real estate owned by the LLC, or (b) incur debt, expend funds, or otherwise obligate the LLC if the debt, expenditure, or other obligation exceeds .

ARTICLE IV

CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

12. Interest of Members. Each Member shall own a percentage interest in the LLC.

13. Contributions. The initial contributions and initial percentage interest of the Members are as set out in this Agreement.

14. Additional Contributions. Only a majority of the Members of the LLC may call on the Members to make additional cash contributions as may be necessary to carry on the LLC's business.

15. Record of Contributions/Percentage Interests. This Agreement, any amendment(s) to this Agreement, and all Resolutions of the Members of the LLC shall constitute the record of the Members of the LLC and of their respective interest therein.

16. Profits and Losses. The profits and losses and all other tax attributes of the LLC shall be allocated among the Members on the basis of the Members' percentage interests in the LLC.

17. Distributions. Distributions of cash or other assets of the LLC shall be made in the total amounts and at the times as determined by a majority of the Members.

18. Change in Interests. If during any year there is a change in a Member's percentage interest, the Member's share of profits and losses and distributions in that year shall be determined under a method which takes into account the varying interests during the year.

ARTICLE V

VOTING; CONSENT TO ACTION

19. Voting by Members. Members shall be entitled to vote on all matters which provide for a vote of the Members in accordance with each Member’s percentage interest.

20. Majority Required. Except as otherwise provided and delegated to the Officers or Managers, a majority of the Members, based upon their percentage ownership, is required for any action.

21. Meetings - Written Consent. Action of the Members or Officers may be accomplished with or without a meeting.

22. Meetings. Meetings of the Members may be called by any Member owning 10% or more of the LLC.

23. Majority Defined. As used throughout this agreement the term “Majority” of the Members shall mean a majority of the ownership interest of the LLC as determined by the records of the LLC on the date of the action.

ARTICLE VI

DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS, AND PERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION

24. Duties of Members: Limitation of Liability. The Members, Board members, Managers and officers shall perform their duties in good faith.

25. Members Have No Exclusive Duty to LLC. The Members shall not be required to participate in the LLC as their sole and exclusive business.

26. Protection of Members and Officers.

(a) Protected Party refers to the Members and officers of the Company.

(b) Good faith reliance may include the provisions of this Agreement, the records of the LLC, and other professional information.

(c) The provisions of this Agreement replace other duties and liabilities to the extent permitted by law.

27. Indemnification and Insurance.

(a) Right to Indemnification.

(i) Civil actions may be indemnified if acted in good faith.

(ii) Criminal actions may be indemnified if acted in good faith and with reasonable cause.

(b) Advancement of Expenses. Expenses incurred may be paid in advance of the proceedings conclusion.

(c) Non-Exclusivity of Rights. The right to indemnification and payment of fees and expenses conferred in this section shall not be exclusive.

(d) Insurance. The Members may cause the LLC to purchase and maintain insurance for the LLC, its Members and officers.

(e) Effect of Amendment. No amendment, repeal or modification shall adversely affect any rights hereunder with respect to prior actions or omissions.

ARTICLE VII

MEMBERS INTEREST TERMINATED

28. Termination of Membership. A Member's interest in the LLC shall cease upon specified events.

29. Effect of Dissociation. A dissociated Member shall not be entitled to receive the fair value of his LLC interest solely by virtue of dissociation.

ARTICLE VIII

RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST; SET PRICE FOR LLC INTEREST

30. LLC Interest. The LLC interest is personal property.

31. Encumbrance. A Member can encumber his LLC interest only with the consent of a majority of the other Members.

32. Sale of Interest. A Member can sell his LLC interest only as follows:

(a) If a Member desires to sell his/her interest, he/she shall give written notice to the LLC and first offer the interest to the LLC.

(b) If the LLC does not buy the interest, the other Members shall have the option to buy on a pro rata basis.

(c) If the LLC or Members do not buy the offered interest, the selling Member can then assign the interest to a non-member.

(d) The selling Member must close on the assignment within ninety (90) days.

(e) A non-member purchaser cannot exercise any rights of a Member unless a majority consent is given.

33. Set Price. The Set Price for purposes of this Agreement shall be the price fixed by consent of a majority of the Members.

ARTICLE IX

OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER

34. Dissociation. Upon the occurrence of a dissociation event with respect to a Member, the LLC and the remaining Members shall have the option to purchase the dissociated Member's interest at the Set Price.

ARTICLE X

DISSOLUTION

35. Termination of LLC. The LLC will be dissolved and its affairs must be wound up only upon the written consent of a majority of the Members.

36. Final Distributions. Upon the winding up of the LLC, the assets must be distributed as provided in the Agreement.

ARTICLE XI

TAX MATTERS

37. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue Code § 704 and the regulations thereunder.

38. Partnership Election. The Members elect that the LLC be taxed as a partnership and not as an association taxable as a corporation.

ARTICLE XII

RECORDS AND INFORMATION

39. Records and Inspection. The LLC shall maintain at its place of business the Articles of Organization, any amendments thereto, this Agreement, and all other LLC records required to be kept by the Act.

40. Obtaining Additional Information. Each Member may obtain information regarding the business and financial condition of the LLC.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

41. Amendment. Any amendment to this Agreement may be proposed by a Member and approved in writing by a majority of the Members.

42. Applicable Law. To the extent permitted by law, this Agreement shall be construed in accordance with and governed by the laws of the State of Tennessee.

43. Pronouns, Etc. References to a Member or Board member or Manager shall be deemed to include all applicable forms.

44. Counterparts. This instrument may be executed in any number of counterparts.

45. Specific Performance. The nonbreaching Members shall be entitled to injunctive relief to prevent breaches of this Agreement.

46. Further Action. Each Member agrees to perform all further acts and execute documents necessary to carry out this Agreement.

47. Method of Notices. All written notices required or permitted by this Agreement shall be hand delivered or sent by registered or certified mail.

48. Facsimiles. Copies, facsimiles, telecommunication or other reliable reproductions may be used in lieu of originals.

49. Computation of Time. The day of the act, event or default shall not be included in computing any period of time.

WHEREFORE, the Parties have executed this Agreement on the dates stated below their signatures on the attached signature page for each individual Party.

NOTICE: EACH MEMBER HEREBY CERTIFIES THAT HE OR SHE HAS RECEIVED A COPY OF THIS OPERATING AGREEMENT AND FORMATION DOCUMENT OF

, A TENNESSEE LIMITED LIABILITY COMPANY.

EACH MEMBER REALIZES THAT AN INVESTMENT IN THIS COMPANY IS SPECULATIVE AND INVOLVES SUBSTANTIAL RISK.

Members:

Name:

Address:

City, State, Zip:

Phone:

Name:

Address:

City, State, Zip:

Phone:

Name:

Address:

City, State, Zip:

Phone:

Name:

Address:

City, State, Zip:

Phone:

Additional Member/Signature Notes:

Signature:

Date:

Signature:

Date:

Signature:

Date:

Signature:

Date:

Enter text✕
Prepare your document for signing right on this page
  • 01 Edit the text and complete the fields
  • 02 Click Sign Now and on the next screen add recipients and signature fields in SignNow
  • 03 Start your free trial to sign and send your doc
Sign Now

What the Tennessee LLC Sample Operating Agreement Is

A Tennessee LLC Sample Operating Agreement is a written contract among an LLC's members that sets out ownership percentages, capital contributions, management structure, voting rights, allocations of profit and loss, and procedures for transfers, admissions, and dissolution. It records the parties' expectations, fills gaps where state default rules apply, and provides a clear framework for decision-making and dispute resolution among members.

Why a Written Operating Agreement Matters

A tailored operating agreement clarifies member duties, preserves limited liability protections, and lets members opt out of Tennessee default provisions; it also documents financial and governance arrangements useful in tax, banking, and investor contexts.

Why a Written Operating Agreement Matters

Who Typically Uses This Sample Operating Agreement

The Tennessee LLC Sample Operating Agreement suits single-member and multi-member LLCs, new business founders, and existing members updating governance terms.

  • Founders and entrepreneurs establishing an LLC and defining ownership and management.
  • Investors and capital contributors documenting rights, distributions, and transfer restrictions.
  • Managers and officers clarifying authority, meeting rules, and decision thresholds.

Use the template as a starting point; customize terms to match the LLC's ownership structure, tax treatment, and any industry-specific obligations.

Core Sections to Include in a Professional Agreement

A comprehensive Tennessee LLC Sample Operating Agreement should combine governance, financial, transfer, and dispute-resolution provisions so members understand rights and obligations from day one.

Identification

LLC name, formation date, and principal office address; confirms the entity tied to state formation records and bank accounts.

Members and Ownership

List each member, capital contributions, and percentage interests; explains dilution mechanics and what constitutes additional capital calls.

Management

Specify member-managed or manager-managed structure, manager powers, delegation limits, and voting thresholds for routine and major actions.

Allocations and Distributions

Detail how profits, losses, and distributions are allocated; include tax allocations and timing for distributions to members.

Transfers

Restrict transfers, right of first refusal, and procedures for admitting new members, buyouts, and valuation methods on departure.

Dissolution & Dispute

Describe winding up, distribution waterfall, and dispute resolution (mediation/arbitration) to limit litigation and govern final accounting.

Step-by-Step: Filling Out the Tennessee LLC Operating Agreement

Follow a clear sequence to minimize omissions and ensure all parties understand financial and governance terms before signing.

  • 01
    Prepare: Gather formation documents and member information.
  • 02
    Draft: Enter economic and governance terms tailored to the LLC.
  • 03
    Review: Have members and counsel review for tax and liability effects.
  • 04
    Execute: Sign, date, and distribute final copies to members.

How to Customize and Complete the Agreement Online

Set up a digital workflow to collect signatures, route copies, and preserve an audit trail for future reference.

Field Configuration
Signer Order Sequential or parallel routing based on member roles
Authentication Email link, SMS code, or stronger methods for high-value agreements
Conditional Fields Show or hide provisions based on member count or management choice
Certificate Attach completion audit trail and signed PDF for records

Where to File, Send, or Submit the Agreement

Operating agreements are internal documents and are usually kept with company records; routing copies to key stakeholders completes the record.

  • Company Records: Store the signed original in the LLC's corporate records book.
  • Registered Agent: Provide copies to the registered agent for service-of-process context.
  • Banks & Lenders: Send certified copies when opening accounts or securing financing.
  • Members: Distribute final signed PDFs to all members for inspection.

Digital Signing and eSubmission: Technical Considerations

Choose an eSignature platform that supports required authentication, audit trails, and file formats to preserve evidentiary value.

  • File Formats: PDF and DOCX preserve layout and are widely accepted.
  • Authentication: Use email, SMS, or advanced methods for higher assurance.
  • Integrations: Connectors for Google Workspace and NetSuite ease distribution.

Ensure the provider supports ESIGN/UETA compliance, audit logs, and exportable signed records to meet legal and administrative needs.

eSignature Provider Comparison for Operating Agreements

Compare key pricing and feature differences across providers to choose a compliant eSignature workflow; signNow is listed first per vendor comparison format.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Consequences of an Incorrect or Missing Operating Agreement

Member Disputes: Unclear duties increase litigation risk
Default Statute: State law controls absent agreement
Liability Risk: Poor documentation can jeopardize limited liability
Tax Issues: Ambiguous allocations may trigger IRS scrutiny
Banking Delays: Banks often require signed agreement copies
Valuation Gaps: No buyout formula complicates transfers

Common Mistakes to Avoid When Preparing the Agreement

  • Leaving economic terms vague, such as undefined 'reasonable' distributions, which creates disputes and hinders financial planning.
  • Failing to document capital call mechanics and consequences for missed contributions, which can lead to unexpected dilution or insolvency issues.
  • Omitting a clear method to value member interests on withdrawal or death, forcing courts or accountants to set ad hoc prices.
  • Neglecting to specify governing law and venue, which increases litigation complexity and can raise jurisdictional defenses.

Practical Tips for Drafting a Clear Operating Agreement

Adopt straightforward language, define key terms, and document decision thresholds so the agreement works as an operational manual as well as a legal contract.

Define Key Terms Clearly
Create a definitions section for terms like 'Major Action', 'Capital Contribution', and 'Distribution' to avoid differing interpretations among members.
Use Concrete Numbers
Specify percentages, notice periods, and valuation formulas rather than subjective phrases; this reduces ambiguity during disputes or transfers.
Address Tax Treatment
State whether the LLC elects partnership or corporation tax status and describe K-1 timelines and responsibility for tax elections and filings.
Plan for Deadlocks
Include deadlock-break mechanisms such as mediation, buy-sell triggers, or third-party appraisal to resolve persistent management impasses.

How Other Companies Use an Operating Agreement

Real-world examples show how a clear operating agreement reduces friction in financing, property management, and daily operations.

Optica Ventures LLC

Optica used a standardized operating agreement to streamline investor onboarding and clarity on profit sharing.

  • The agreement simplified K-1 preparation.
  • As COO Brian Fitzgibbons noted, having a clear document reduced administrative questions and accelerated capital deployment while making banking and tax reporting straightforward for a growing investment portfolio.

Martin Properties

A property management LLC layered lease and maintenance exhibits into its operating agreement to protect investors.

  • This reduced tenant-dispute escalations.
  • Founder Tim Martin found that integrating operational schedules and decision rules in the agreement helped on-site managers act with authority and kept investor distributions consistent during rapid portfolio growth.

Frequently Asked Questions About Tennessee LLC Operating Agreements

Answers to common questions about enforceability, signing options, notarization, amendments, and record storage for operating agreements.


Need help? Contact support

Explore Templates

Certification of Compliance with Fair Credit Reporting Act Pre-Employment Background Check Notice Fitness for Duty Certification Family and Medical Leave Request Form FMLA Tracker Form
be ready to get more
Join over 28 million airSlate SignNow users
Sign Now
Company
Forms
Pricing
Resources
Knowledge base
Other Products
© 2026 airSlate Inc. All rights reserved.