Operating Agreement Template Tennessee

INSTITUTIONAL-GRADE LIMITED LIABILITY COMPANY OPERATING AGREEMENT

Document ID: OA-TN-2026-V1
Effective Date: [Effective Date]
Governing Jurisdiction: State of Tennessee (Tennessee Revised Limited Liability Company Act, Tenn. Code Ann. § 48-249-101 et seq.)
Version: 1.0 (Exhaustive Enterprise Form)

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1. STATUTORY & LEGAL COMPLIANCE NOTICE

This Limited Liability Company Operating Agreement (the "Agreement") is drafted to conform strictly with the requirements of the Tennessee Revised Limited Liability Company Act, Tenn. Code Ann. § 48-249-101 et seq. (the "Act"). This document is an institutional-grade legal instrument. Execution of this Agreement creates significant legal, operational, and tax obligations. The Members acknowledge that they have been advised to retain independent legal counsel and certified public accountants to review this document prior to execution. Neither the drafter nor any publisher of this template provides legal or tax advice, and no warranties, express or implied, are made regarding the tax consequences or specific enforceability of this instrument in any unique factual context.

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2. PARTIES & RECITALS

This Operating Agreement is entered into and made effective as of [Effective Date], by and among [Company Full Legal Name], a Tennessee limited liability company (the "Company"), and the persons executing this Agreement as Members and listed on Schedule A attached hereto (each a "Member" and collectively, the "Members").

RECITALS:

WHEREAS, the Company was formed as a limited liability company on [Formation Date] by the filing of Articles of Organization with the Secretary of State of the State of Tennessee;

WHEREAS, the parties desire to set forth their respective rights, duties, obligations, and liabilities regarding the management, operation, finances, and governance of the Company, and the relationship among the Members, pursuant to the provisions of the Act;

NOW, THEREFORE, in consideration of the mutual covenants, promises, and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

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3. EXHAUSTIVE OPERATIVE CLAUSES & LEGAL TERMS

ARTICLE I: COMPANY FORMATION, NAME, AND PRINCIPAL PLACE OF BUSINESS

1.1 Formation. The Company has been organized as a Tennessee limited liability company by the filing of its Articles of Organization with the Secretary of State of the State of Tennessee pursuant to and in accordance with the Act. The rights and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent this Agreement is inconsistent with any non-mandatory provision of the Act, this Agreement shall govern and control to the maximum extent permitted by law.

1.2 Name. The name of the Company is [Company Full Legal Name], LLC. The business of the Company may be conducted under that name or, upon compliance with applicable laws, any other name designated by the Board of Managers or the Members.

1.3 Principal Place of Business. The principal office and place of business of the Company shall be located at [Principal Address], or such other place within or outside the State of Tennessee as the Members or Managers may determine from time to time upon written notice to all Members.

1.4 Registered Agent and Office. The name and address of the registered agent for service of process on the Company in the State of Tennessee shall be [Registered Agent Name], located at [Registered Agent Address]. The registered agent and office may be changed from time to time by filing the appropriate statutory notice with the Tennessee Secretary of State.

1.5 Term. The term of the Company commenced upon the filing of its Articles of Organization with the Secretary of State of the State of Tennessee and shall continue indefinitely in perpetual existence, unless and until dissolved in accordance with the provisions of this Agreement or the applicable provisions of the Act.

ARTICLE II: BUSINESS PURPOSE AND POWERS

2.1 Purpose. The purpose of the Company is to engage in any and all lawful acts or activities for which limited liability companies may be formed under the Act, including, without limitation, [Specific Business Purpose, e.g., software development, asset management, consulting]. The Company shall have all the powers necessary or convenient to carry out any and all business purposes for which the Company is organized.

2.2 Powers. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with all powers incidental thereto or necessary, convenient, or advisable to the conduct, promotion, or attainment of the business purposes of the Company.

ARTICLE III: CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

3.1 Initial Capital Contributions. Concurrently with the execution of this Agreement, each Member has contributed to the capital of the Company cash, property, or services in the amounts and of the value set forth opposite such Member’s name on Schedule A attached hereto. In exchange for such contributions, each Member is issued the Percentage Interests and/or Units set forth on Schedule A.

3.2 Additional Capital Contributions. No Member shall be required to make any additional capital contributions to the Company beyond those set forth on Schedule A, except as unanimously agreed in writing by the Members. If the Board of Managers or the Members determine that additional capital is required to conduct the Company’s business, the Company may issue a capital call notice to all Members. If any Member declines to make its proportionate additional capital contribution, the contributing Members may elect to fund the shortfall, and the non-contributing Member's Percentage Interest shall be proportionately diluted in accordance with a valuation formula determined in good faith by the Board of Managers.

3.3 Capital Accounts. A separate Capital Account shall be maintained for each Member in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Each Member’s Capital Account shall be: (a) increased by the amount of cash and the fair market value of any property contributed by such Member to the Company (net of liabilities secured by such property that the Company assumes or takes subject to), and the amount of Company net income and gains allocated to such Member; and (b) decreased by the amount of cash and the fair market value of any property distributed to such Member by the Company (net of liabilities secured by such property that such Member assumes or takes subject to), and the amount of Company net losses and deductions allocated to such Member.

3.4 No Interest on Capital Contributions. No Member shall be entitled to demand or receive any interest on its capital contributions or Capital Account balance from the Company.

3.5 Return of Capital. No Member has the right to receive any return of any capital contribution, except as expressly provided in this Agreement. Under no circumstances shall a Member be required to restore a negative balance in its Capital Account.

ARTICLE IV: PROFITS, LOSSES, AND DISTRIBUTIONS

4.1 Allocation of Profits and Losses. For each fiscal year of the Company, net profits and net losses of the Company shall be allocated among the Members in proportion to their respective Percentage Interests as set forth on Schedule A, as amended from time to time.

4.2 Regulatory Allocations. Notwithstanding Section 4.1, items of income, gain, loss, and deduction shall be allocated in accordance with the "qualified income offset," "minimum gain chargeback," and other regulatory allocation requirements under Section 704 of the Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations promulgated thereunder, which provisions are incorporated herein by reference.

4.3 Distributions of Cash Flow. Except as otherwise provided herein or required by the Act, available cash flow (defined as gross cash receipts of the Company less operating expenses, debt service, and reasonable reserves established by the Board of Managers) shall be distributed to the Members at such times and in such amounts as determined by the Board of Managers, pro rata in proportion to their respective Percentage Interests.

4.4 Tax Distributions. To the extent permitted by law and available cash, the Company shall make mandatory annual tax distributions to each Member in an amount equal to the product of (a) the net taxable income of the Company allocated to such Member for such fiscal year, and (b) the highest combined federal, state, and local marginal individual or corporate income tax rate applicable to any Member resident in Tennessee for such fiscal year. Tax distributions shall be treated as advances against subsequent distributions under Section 4.3.

4.5 Withholding. The Company is authorized to withhold from any distribution or allocation to any Member any amounts required by federal, state, or local tax law to be withheld, and any such withheld amounts shall be treated for all purposes of this Agreement as having been distributed to such Member.

ARTICLE V: MANAGEMENT AND GOVERNANCE

5.1 Management Structure. The business and affairs of the Company shall be managed by or under the direction of a Board of Managers (the "Board"). Except as otherwise expressly provided in this Agreement or required by mandatory provisions of the Act, the Board shall have full, exclusive, and complete authority, power, and discretion to manage and control the business, affairs, and properties of the Company, to make all decisions regarding those matters, and to bind the Company.

5.2 Appointment and Number of Managers. The Board shall consist of [Number, e.g., three (3)] Managers. The initial Managers of the Company shall be [Names of Initial Managers]. Each Manager shall hold office until such Manager’s successor is elected and qualified, or until such Manager’s earlier death, resignation, incapacity, or removal.

5.3 Removal and Replacement of Managers. Any Manager may be removed at any time, with or without cause, by the affirmative vote or written consent of the Member(s) who appointed such Manager. In the event of a vacancy on the Board due to death, resignation, incapacity, or removal, the vacancy shall be filled exclusively by the Member(s) entitled to appoint such Manager under this Agreement.

5.4 Officer Designation. The Board may, from time to time, designate officers of the Company, such as a Chief Executive Officer, President, Chief Financial Officer, or Secretary, who shall have such titles, powers, and duties as delegated by the Board. Officers serve at the pleasure of the Board.

5.5 Member Voting Rights. Except as otherwise expressly provided herein or by the mandatory provisions of the Act, actions requiring Member approval shall be decided by the affirmative vote of Members holding a majority of the aggregate Percentage Interests. Each Member shall have voting power equal to their Percentage Interest set forth on Schedule A.

5.6 Meetings of the Board and Members. Meetings of the Board or Members may be called by any Manager or by Members holding at least twenty percent (20%) of the Percentage Interests. Meetings may be held in person, by telephone conference, or via video conferencing platforms, provided all participants can simultaneously hear and communicate with one another. Written notice of any meeting shall be delivered to all participants at least forty-eight (48) hours prior to the meeting, which notice requirement may be waived in writing.

ARTICLE VI: TRANSFERS OF INTERESTS AND RESTRICTIONS

6.1 General Restriction on Transfers. No Member may directly or indirectly sell, assign, transfer, pledge, encumber, hypothecate, or otherwise dispose of ("Transfer") all or any part of its Limited Liability Company Interest (including economic and voting rights), whether voluntarily, involuntarily, by operation of law, or otherwise, except in strict compliance with this Article VI. Any purported Transfer in violation of this Agreement shall be null and void ab initio, and the Company shall not recognize the purported transferee for any purpose.

6.2 Right of First Refusal. If any Member (a "Selling Member") receives a bona fide, written, arm's-length offer from a third party to purchase all or any portion of its Interest, the Selling Member shall first offer such Interest to the Company, and then to the remaining Members, on the same terms and conditions as the third-party offer, pursuant to the detailed notice and procedural mechanics set forth in this Section 6.2. The Company and non-selling Members shall have thirty (30) days to exercise their option to purchase.

6.3 Permitted Transfers. A Member may Transfer all or part of its Interest without the consent of the Board or other Members to: (a) a revocable living trust established for the primary benefit of the transferring Member; (b) an entity wholly owned and controlled by the transferring Member; or (c) an immediate family member (spouse, child, or sibling); provided that the transferee executes a joinder agreement agreeing to be bound by all terms of this Operating Agreement.

6.4 Admission of Substitute Members. No transferee of a Member’s Interest shall become a substituted Member of the Company unless: (a) the Transfer is permitted under Section 6.3 or approved by the unanimous written consent of the non-transferring Members; (b) the transferee executes and delivers to the Company a written joinder agreeing to be bound by this Agreement; and (c) the transferee pays all reasonable legal and administrative fees incurred by the Company in connection with such substitution.

ARTICLE VII: DISSOLUTION, LIQUIDATION, AND TERMINATION

7.1 Dissolution Events. The Company shall dissolve, and its affairs shall be wound up, only upon the first to occur of the following:

1. The written determination of the Board and the unanimous consent of all Members to dissolve the Company;
2. The entry of a judicial decree of dissolution under Tenn. Code Ann. § 48-249-603; or
3. The sale, exchange, or other disposition of all or substantially all of the property and assets of the Company.

7.2 Liquidation Process. Upon dissolution, the Company shall cease carrying on its business, except as necessary to wind up its affairs. A liquidating trustee (who may be a Manager or Member) shall oversee the liquidation. The assets of the Company shall be applied in the following order of priority:

1. To the payment and discharge of all claims and debts of the Company owed to third-party creditors;
2. To the setting up of any reasonable reserves for contingencies, liabilities, or obligations of the Company; and
3. The balance, if any, to the Members in proportion to their positive Capital Account balances, and thereafter pro rata in accordance with their Percentage Interests.

7.3 Articles of Dissolution. Upon completion of the winding up of the Company, the liquidating trustee or authorized representative shall promptly file Articles of Dissolution with the Secretary of State of the State of Tennessee in accordance with the Act.

ARTICLE VIII: BOOKS, RECORDS, TAX MATTERS, AND FISCAL YEAR

8.1 Books and Records. The Company shall maintain true and accurate books and records of account at its principal place of business, including a current list of the full name and last known business address of each Member, a copy of the Articles of Organization and this Agreement, and federal, state, and local tax returns for the three most recent years. Each Member shall have the right to inspect and copy such records during normal business hours for any purpose reasonably related to such Member's interest as a Member.

8.2 Fiscal Year. The fiscal year of the Company shall commence on the 1st day of January and end on the 31st day of December of each calendar year.

8.3 Tax Matters Partner / Partnership Representative. [Name of Member or Manager] is hereby designated as the "Partnership Representative" of the Company pursuant to Section 6223 of the Code and any corresponding state tax laws, with full power and authority to act on behalf of the Company in all tax audits, proceedings, and administrative matters.

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4. EXECUTION & FORMAL SIGNATURE BLOCKS

IN WITNESS WHEREOF, the parties hereto have executed this Limited Liability Company Operating Agreement as of the Effective Date first written above.

FOR [COMPANY FULL LEGAL NAME], LLC:
Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role, e.g., Managing Member / CEO]
Company: [Company Full Legal Name]
Date: [Date]

FOR [MEMBER / COUNTERPARTY NAME]:
Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role]
Company: [Company Legal Name / Individual]
Date: [Date]

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5. SCHEDULE A: MEMBER CAPITAL CONTRIBUTIONS & PERCENTAGE INTERESTS

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6. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Placeholder Review & Data Population: Open this document in Microsoft Word or Google Docs. Locate every bracketed field formatted as [Bracketed Text] (e.g., [Company Full Legal Name], [Principal Address], [Effective Date]). Replace all bracketed items with the exact legal data corresponding to the transaction. Verify spelling against state registration filings.
2. Schedule A Verification: Ensure that the capital contributions listed in Schedule A mathematically reconcile with the company's bank accounts or contributed asset appraisals, and that the sum of all Percentage Interests totals precisely 100.00%.
3. Signatory Authority Verification: Confirm that each individual signing on behalf of a corporate entity or limited liability company possesses express, verified legal authority to bind that entity under its governing documents.
4. Digital Execution (DocuSign / Adobe Sign): Upload the finalized document into an enterprise-grade digital signature platform. Ensure audit-trail tracking (IP addresses, timestamps) is enabled for all executing parties.
5. Corporate Records Retention: Upon complete execution, store the fully signed PDF original in the Company's permanent corporate minute book and records repository. Provide executed copies to all participating Members. Maintain a copy at the Tennessee principal place of business for inspection compliance under Tenn. Code Ann. § 48-249-408.