Tennessee Certificate of Authority / The fine
What happens if you operate in Tennessee without a certificate
A foreign LLC that has been transacting business in Tennessee without a certificate owes a fine before the state will file its application: 3 times the otherwise required fee for each year or part-year. At the $300 floor that is $900 a year.
The fine at different fees
| Fee that would have been due | One year or part | Two years |
|---|---|---|
| $300 (up to 6 members) | $900 | $1,800 |
| $350 (seven members) | $1,050 | Twice that |
Three years at the minimum come to $2,700, before the application fee itself.
The text of the statute
T.C.A. 48-249-913(d) provides that an LLC formed abroad and transacting business here with no certificate "shall be fined and shall pay to the secretary of state" three times the filing fee for each year or part of a year. Under subsection (e) the application is held until that sum is paid.
The other effects
| Effect | What the Act provides |
|---|---|
| Courts | No Tennessee court will hear a proceeding from the LLC until it has a certificate |
| Successors | The bar extends to successors and to anyone taking over a cause of action |
| Stays | A court can pause a case the LLC starts, pending a ruling on whether a certificate was needed |
| Contracts | Contracts and acts stay valid, the counterparty keeps its right to sue, and the LLC can defend |
| Owners | Members and representatives are not made liable for company debts merely on this ground |
| Injunction | The state's attorney general may go to court to halt the LLC's business |
Counting the years
The fine runs on each year or part of a year in which the LLC lacked a certificate. A Tennessee business lawyer can fix when business began and therefore how many years apply. The form asks for the start date; we enter whichever you settle on.
Why a larger LLC pays more
Because the fine multiplies the filing fee, it follows headcount: $1,050 a year at seven members against $900 at the floor.
The attorney general
Suit lies in the Davidson County chancery court, or one where the LLC does or did business. There the attorney general may seek to halt an LLC that has no certificate or got one through false or misleading statements, and the state can recover its fees and expenses.
A worked situation
Say a supplier ships goods to a Nashville customer who never pays. If the supplier is an unregistered foreign LLC trading here, no suit to recover the money can start until a certificate is held, and the fine must be paid first. The debt survives, since contracts stay valid.
The role of the filing date
The certificate takes effect when the application is filed, not when the fine was incurred, so the fine and the certificate are separate matters on the same timeline.
Fine arithmetic, year by year
Held to the minimum fee, one year or part of one brings $900 in fines, two bring $1,800 and three bring $2,700. With seven members the fee would be $350, so a first year's fine reaches $1,050.
A court may pause the case
A court that receives a proceeding from an unauthorized LLC may stay it until the court decides whether a certificate was needed and, if one was, until the LLC obtains it.
What happens to the other side
Contracts and acts remain valid, the counterparty can still sue over the contract, and the LLC itself may still answer a claim against it. Members and representatives do not become liable for the LLC's debts only for want of a certificate.
Ending the exposure
File the application. Once the fine is paid and the state files, the certificate takes effect from the filing date. The SS-4233 page and the full guide show how.
A different problem: losing a certificate you had
Losing a certificate you once held leads to revocation, not the fine. A written determination is served first; 2 months are allowed to correct, and revocation may follow. Getting the certificate back costs $70 on Form SS-9410.
Fine questions
How much is the fine?
At least $900 for each year or part-year, being 3 times the filing fee.
Can we file first and pay the fine later?
No. The state files only after the fine is paid.
Does headcount change it?
Yes, because it multiplies the filing fee.
Do our contracts survive?
Yes.
Pricing
Get your Tennessee certificate
$199
+ from $300 state filing fee
$300 is the LLC floor on a $50-a-member scale; other entity types pay their own state fee, shown on the fees page. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
- An application written for your entity type from your replies
- The home certificate, requested to land inside the window
- A Tennessee agent for service from us, or one you choose
- The endorsed application returned to you as your certificate
- Renewal: after the first year, the agent service renews at $149 a year
Sources
- Tennessee Secretary of State, business forms and fees
- Tennessee Code Annotated 48-249-1007, LLC filing fees (General Assembly bill text restating the section)
- Tennessee Secretary of State, business FAQs
- Form SS-4431, application for certificate of authority, foreign for-profit corporation
- Tennessee Revised Limited Liability Company Act, foreign LLC provisions (Public Chapter 286)
- Form SS-4233, application for certificate of authority, foreign limited liability company
Ready for your Tennessee certificate?
Name the entity type and headcount; we write the matching application.