Registering an Out-of-State LLC in Tennessee: When a Certificate of Authority Is Required

An LLC formed in another state does not have to register in Tennessee just because it has a customer, a bank account, or a piece of property here. It has to register when it is transacting business in Tennessee. The statute answers part of that question with a list of activities that do not count, and the rest depends on the facts. Franchise and excise tax runs on its own test, so the registration answer and the tax answer can differ.

The basic rule

Tennessee's Revised Limited Liability Company Act calls an LLC formed under another jurisdiction's law a foreign LLC (Tenn. Code Ann. § 48-249-102(12)). Before transacting business in Tennessee, a foreign LLC must obtain a certificate of authority from the Secretary of State (§ 48-249-904(a)).

Registering does not make the LLC a Tennessee company. Its home state's law still governs its formation, internal affairs, dissolution, and its members' liability (§ 48-249-901(1)).

What does not count as transacting business

Activities the statute says do not constitute transacting business include (§ 48-249-902(a)):

• Maintaining, defending, or settling a lawsuit, claim, or dispute.
• Holding meetings and other internal-affairs activity.
• Maintaining bank accounts.
• Selling through independent contractors.
• Soliciting or obtaining orders that require acceptance outside Tennessee before they become contracts.
• Creating or acquiring debt, deeds of trust, mortgages, and security interests, and securing or collecting debts or enforcing those security interests.
• Owning, without more, real or personal property.
• Conducting an isolated transaction that is completed within one month and is not one of repeated transactions of a like nature.
• Transacting business in interstate commerce.

An out-of-state entity is also not transacting business solely because it is a member or manager of a domestic or foreign LLC, which matters when an out-of-state LLC owns a Tennessee LLC (§ 48-249-902(b)).

The list is not exhaustive, and it decides only whether a certificate of authority is required, not whether the LLC can be served with process, taxed, or regulated here under other laws (§ 48-249-902(c)).

The isolated-transaction exception is narrower than it sounds

The exception has two conditions: the transaction must be completed within one month, and it must not be one of repeated transactions of a like nature (§ 48-249-902(a)(10)). A single sale that closes in three weeks may fit. A four-month construction job, or the second deal of the same kind, likely does not. The exception is easy to outgrow without noticing.

Owning real estate

Owning property, without more, is on the list (§ 48-249-902(a)(9)). The same provision adds that, for a reasonable time, managing and renting property acquired by enforcing a mortgage or deed of trust is also excluded, if the owner is trying to liquidate and keeps no office or agency here other than an independent agency.

The statute does not say what more turns ownership into transacting business. I am not aware of a Tennessee appellate decision deciding whether an out-of-state LLC that holds and rents out a Tennessee property is transacting business under the LLC Act. The facts likely to matter include who manages the property, whether the LLC has an office or employees here, and how much property it holds.

How the courts have described the line

Most of the case law involves foreign corporations. Older Tennessee Supreme Court decisions, decided under earlier statutes, described a corporation as doing business in a state when it transacts some substantial portion of its ordinary business there, continuous in character as distinguished from merely casual or occasional transactions (Lloyd Thomas Co. v. Grosvenor, 144 Tenn. 347 (1920)), and said the answer is in a large measure found in the facts (United Artists Corp. v. Board of Censors, 189 Tenn. 397 (1949)). In a 2018 opinion on licensed nonresident alcohol sellers and direct shippers, the Attorney General relied on both cases and applied the same analysis to foreign corporations and LLCs (Tenn. Op. Att'y Gen. No. 18-28 (July 6, 2018)). Attorney General opinions are not binding on Tennessee courts.

Under the current corporation statute, the Court of Appeals held that a Florida-based corporation that sold through an independent contractor in Tennessee was not barred from enforcing an arbitration award here for lack of a certificate of authority (Alison Group, Inc. v. Ericson, 181 S.W.3d 670 (Tenn. Ct. App. 2005)). I am not aware of a Tennessee appellate decision interpreting the LLC Act's list in § 48-249-902 itself.

If the LLC should have registered and did not

• Lawsuits: the LLC, its successors, and transferees of its claims may not maintain a proceeding in a Tennessee court until it obtains a certificate of authority. The court may stay the case to decide whether a certificate is required and then until one is obtained (§ 48-249-913(a)-(c)).
• Curing during the case: under the parallel corporation statute, the Court of Appeals held that a foreign corporation that sued without a certificate may obtain one while the case is pending and then prosecute the action (Sharper Impressions Painting Co. v. Yoder, No. M2015-00841-COA-R9-CV (Tenn. Ct. App. Sept. 19, 2016)). The LLC statute uses the same may-not-maintain-until language, but I am not aware of a Tennessee appellate decision applying that holding to foreign LLCs.
• Defending: the LLC can still defend a lawsuit (§ 48-249-913(f)(3)). Under the prior LLC Act, the Court of Appeals allowed an unregistered foreign LLC to assert a counterclaim as a defense to a suit filed against it (Battery Alliance, Inc. v. Allegiant Power, LLC, No. W2015-02389-COA-R3-CV (Tenn. Ct. App. Jan. 30, 2017)).
• Fines: the LLC owes three times the otherwise required filing fee for each year or part of a year it lacked a certificate, and the Secretary of State will not file its application until those amounts are paid (§ 48-249-913(d), (e)). If it has been transacting business without a certificate for a year or more, the application also waits for a confirmation of good standing from the Commissioner of Revenue (§§ 48-249-905(c), -102(5)).
• Contracts and members: the failure does not impair the validity of the LLC's contracts or acts or the other party's right to sue on a contract, and members and representatives are not liable for the LLC's debts solely because it lacked a certificate (§ 48-249-913(f), (g)).
• Injunction: the Attorney General may sue to stop an LLC from transacting business in Tennessee without a certificate (§ 48-249-914).

Applying: contents, name, and registered agent

The application states the LLC's name; its home jurisdiction and date of formation; the street address of its Tennessee registered office and the name of its registered agent; the street address of its principal executive office; the number of members, if more than six; and any other information the Secretary of State requires (§ 48-249-904(a)). A certificate of existence from the home state must accompany it, dated no more than two months before the filing (§ 48-249-904(b)). The certificate of authority is effective on the date the application is filed (§ 48-249-905(b)).

If the LLC's governing documents provide for series, the application must say so. That disclosure is covered in the article on series LLCs in Tennessee (§§ 48-249-904(a)(5), -309(i)).

As of October 27, 2026, the Secretary of State's Business Forms and Fees page (which shows no revision date) lists the LLC application as form SS-4233, at $300 with a note that additional fees may apply. The statute sets the initial fee, and the annual fee after that, at $50 per member, with a minimum of $300 and a maximum of $3,000 (§ 48-249-1007(d)).

• Name: the name used in Tennessee must meet the same requirements as a Tennessee LLC's name, though a foreign LLC may use the designations its home state allows. It cannot contain corporation or incorporated, and it must be distinguishable on the Secretary of State's records from other filed names (§§ 48-249-903(a), -106(a), (b)).
• If the name is taken: the Act allows use of an indistinguishable name with the other holder's written consent and undertaking, a court judgment, or consent plus a shared registered agent (§ 48-249-106(c)). A foreign LLC may also adopt an assumed name, which is good for five years and can be renewed (§§ 48-249-903(c), -106(d)).
• Registered agent: the LLC must continuously maintain a Tennessee registered office and a registered agent at that address. The agent may be a Tennessee resident or a Tennessee or authorized foreign corporation, LLC, or partnership (§ 48-249-109(a)).

After registration: amendments, annual reports, revocation, and withdrawal

• Amendments: if a statement in the application was false or has changed, the LLC must promptly file an amendment. Changes to the registered office or agent go through a statement of change instead (§§ 48-249-906, -110).
• Annual report: each registered foreign LLC files an annual report with the Secretary of State (§ 48-249-1017(a)).
• Revocation: grounds include an annual report more than two months late and two months without a registered agent or office (§ 48-249-908). The LLC generally gets notice and two months to cure (§ 48-249-909(a), (b)), and a reinstatement relates back to the revocation date (§ 48-249-910(c)).
• Withdrawal: the LLC withdraws by filing a certificate of cancellation of its certificate of authority with a tax clearance, and it either keeps its registered agent or appoints the Secretary of State for service on claims from the period it was authorized (§ 48-249-907). A revoked LLC can withdraw without first reinstating (§ 48-249-912). The Secretary of State's forms page lists SS-4241 ($20) for withdrawal and SS-4254 ($100) for cancellation following administrative revocation.

Franchise and excise tax

The Department of Revenue's Franchise and Excise Tax Manual (June 2026) says all for-profit foreign and domestic entities formed or qualified with the Secretary of State must file a franchise and excise tax return and pay at least the minimum tax, which it describes as $100. Registering brings a filing obligation of its own.

The reverse is also true: a taxpayer doing business in Tennessee must file whether or not it is registered, and an entity that never registers is liable from the date it begins operations with substantial nexus. Doing business for tax purposes is defined, in part, as activity purposefully engaged in within Tennessee for gain, benefit, or advantage. Substantial nexus includes owning or using capital in Tennessee and bright-line thresholds for in-state receipts, property, and payroll.

The manual also says to register with the Department within 15 days of becoming subject to the tax (there is no registration fee), and that the entity stays subject to the tax until it legally withdraws, which requires a tax clearance. How this applies to a particular LLC is a question for your CPA.

Foreign corporations, briefly

The Business Corporation Act follows the same structure: a foreign corporation needs a certificate of authority before transacting business in Tennessee, and its list of activities that do not count is substantially the same (Tenn. Code Ann. § 48-25-101). The main differences:

• The penalty for operating without authority is broader: the corporation is liable for three times all fees, penalties, and taxes, plus interest, that would have been imposed had it registered (§ 48-25-102(d)).
• The application includes the names and business addresses of current directors and officers, and a home-state certificate of existence no more than two months old (§ 48-25-103).
• A corporation may qualify under its own name, an assumed corporate name, or its name with corporation, incorporated, or company added (§ 48-25-106(a)).
• The Secretary of State's forms page lists form SS-4431, Application for Certificate of Authority for a For-Profit Corporation, at $600.

Whether an out-of-state LLC needs to register depends on what it does here, how often, and through whom. If your LLC is starting work in Tennessee, or has been operating here without registering, my office can review the activity and handle the certificate of authority.

Educational disclaimer: This article provides general Tennessee educational information only and is not legal or tax advice for any specific company or transaction.