Basic Facts About Incorporating in Tennessee

Posted over 1 year ago. Applies to Tennessee, 1 helpful vote



Overview of Incorporating

Despite the fact that corporations in the media are often large, multinational entities, the fact remains that the vast majority of corporations are small business that incorporate to protect the individual assets of the persons operating the company. Though the press is filled with references to Federal Government agencies like the Securities and Exchange Commission and Federal Trade Commission; for the vast majority of corporations that are and remain private, corporations are all-but-exclusively a local, State-governed matter. In Tennessee, TCA Title 48, Chapter 52 governs the rules for incorporating one's business into a separate legal entity. Essentially, there are five different aspects to a successful incorporation in Tennessee: 1) The Incorporators 2) The Corporation's Charter 3) The Corporation's Organization 4) The Means of Actual Corporation 5) The Establishment of the Corporation's Bylaws The following sections will give a more detailed overview of each.


The Incorporators

Tennessee Law requires at least one "natural" person to act as the incorporator. The Corporation's incorporator or incorporators have the duty to delivering the corporation's new charter and other documents through the life of the corporation to the Secretary of State for filing. In the event the incorporator(s) are unable to act, their agent or representative can operate on the incorporators' behalf. Essentially, the general requirements for serving as an incorporator are: 1) 18 or over 2) Able to understand the duties and other obligations of serving as an incorporator, in other words, you must have the mental ability to understand that you are filing these papers with the State and what that means.


The Charter, Pt.1

When developing the corporation's charter, it is important to distinguish between what is REQUIRED and what is OPTIONAL. Required information is fairly basic and straightforward: 1) The name of the corporation, the name must satisfy certain aspects of Tennessee statute 2) Whether the corporation is for public or mutual benefit 3) IF the corporation is a religious one, then a designation to that effect (if not, then there is no need) 4) The address, including the county of the corporation's original registered agent and office 5) Name and address of each incorporator and address of initial principal office 6) A statement as to whether the corporation is not-for-profit 7) Wether or not the corporation will have members 8) Statement regarding the distribution of assets upon dissolution of the corporation These components of the charter or mandatory and must be included in your charter.


The Charter, Pt. 2

On the other hand, the charter MAY state the following: 1) The names of individuals who will serve as the original officers of the corporation 2) Purposes of the organization of the corporation 3) Any information regarding the management of the corporation and duties of the officers 4) Information limiting the liability of specific directors and officers Be aware that all these provisions must not be inconsistent with law.


The Incorporation

Incorporation is simple, essentially, as soon as the Secretary of State's Office files the Charter, that filing signifies that the incorporators have complied fully with the law and that the corporation is officially formed in Tennessee. The only exception to this is when the Charter designates a delayed effective date of the corporation, in which case, the corporation begins its existence at that designated date.


Organization of the Corporation

After the corporation is formed, the Charter is filed and the next step is to hold an organizational meeting. If the Charter designated directors, those directors must hold an organizational meeting. If the Charter did NOT designate directors, then the incorporators must hold an organizational meeting. In either case, a majority of the directors/incorporator must be present. The purpose of the meeting is largely two-fold. First, to elect officers, or a Board of Directors to elect officers. Second, to draft and enact bylaws for the corporation. One person can hold every position in a corporation; or a person can hold multiple positions, such as incorporator, director and one or more officer positions. Under the law, Tennessee requires only a Secretary position to be held. Not the administrative assistant sort, rather, a person who can keep records of minutes of subsequent meetings. Other positions, such as president, treasurer, etc. are optional.


The Bylaws

If the Charter of the Corporation is the frame of the house, the Bylaws are the rest of the facets of the home. The bylaws are limited in scope only by the law and the language of the charter. The Bylaws generally address the day-to-day functions of the corporation and its function.



Forming a corporation is an excellent legal tool to protect yourself and your family's assets as well as allow your business to grow further and possibly faster than it might without incorporation. Incorporating isn't terribly difficult, but you should contact a competent business law attorney to assist you in forming your corporation. Attention to detail in the formation can mean easy and painless evolution throughout the life of your corporation, while failing to plan ahead in the formative stage of incorporation can mean problems down the road. As a general rule, I always advise clients and small business owners considering incorporating to obtain the services of an attorney for this process.

Additional Resources

Some useful sites might be: Rogers Law Group: TN Secretary of State: National Small Business Association-

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