Transaction of Business Without Certificate of Authority

  1. Law
  2. Tennessee Code
  3. Securities, Corporations and Associations
  4. Foreign Limited Liability Companies
  5. Consequences of Transacting Business Without Certificate of Authority
  6. Transaction of Business Without Certificate of Authority

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  1. A foreign LLC transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.
  2. The successor to a foreign LLC that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding on behalf of its predecessor based on an assigned cause of action in any court in this state until the foreign LLC or its successor obtains a certificate of authority.
  3. A court may stay a proceeding commenced by a foreign LLC, its successor or assignee, until it determines whether the foreign LLC or its successor requires a certificate of authority. If it so determines, the court may further stay the proceeding until the foreign LLC or its successor obtains the certificate.
  4. A foreign LLC doing business in this state without first having obtained a certificate of authority shall be fined and shall pay to the secretary of state three (3) times the otherwise required filing fee for each year or part thereof during which the foreign LLC failed to have such certificate of authority.
  5. An application for a certificate of authority by a foreign LLC which has transacted business in this state without a certificate of authority shall not be filed by the secretary of state until all amounts due under subsection (d) have been paid.
  6. Notwithstanding subsections (a) and (b), the failure of a foreign LLC to obtain a certificate of authority does not impair:
    1. The validity of any contract or act of the foreign LLC;
    2. The right of any other party to the contract to maintain any action, suit, or proceeding on the contract; or
    3. The foreign LLC from defending any action, suit, or proceeding in any court of the state of Tennessee.
  7. A member or representative of a foreign LLC is not liable for the debts and obligations of the foreign LLC solely by reason of the company's having transacted business in this state without a valid certificate of authority.


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