• Domesticate your business within the State of Tennessee. This process occurs when an out of state limited liability company registers as a ”foreign” business entity within the State of Tennessee. This can be a relatively simple process that only requires business owners to obtain a Certificate of Good Standing from their current state and subsequently file a registration form in Tennessee. Oftentimes, business owners do not prefer this option because it means that the limited liability company remains a company of the former state. For example, a California Limited Liability Company would remain a California Limited Liability company, only it would then be properly registered to conduct business in Tennessee. However, registering as a foreign business entity within the State of Tennessee means the company can still be subjected to administrative fees associated with business entities, taxation,^[ii] and potential litigation in its former state.
• Register a new limited liability company in Tennessee. Business owners can easily incorporate a new Tennessee limited liability company and either keep their previous limited liability company active in their former state or choose to dissolve it.  Clients are often able to keep their same business name and dissolve their business operations in one state and resume their operations in Tennessee. Business owners tend to prefer this method because it allows them to formally become a Tennessee Limited liability company and not just an out of state company registered to conduct business in Tennessee. Once a party has decided to dissolve their former company and reincorporate a new LLC, they should also make sure that all previous assets, such as real estate, intellectual property, and bank accounts are properly updated to reflect the new business entity.

Who handles business filings in Tennessee?

The Tennessee Secretary of State’s Business Services Division is responsible for managing the filings and records of all businesses within the State of Tennessee. Most filings can be submitted online at the Tennessee Secretary of State’s website or in person at their location in downtown Nashville. Business owners should also know that relocating your business to Tennessee and failing to properly register your business as a foreign business entity may result in fines and penalties assessed by the Secretary of State’s office.

There are pros and cons that every business owner should consider discussing with a lawyer and/or tax professional when relocating a business to the State of Tennessee. Relocating business operations is an important issue for small and large business owners alike, and it is essential that they properly assess their options.

If you are interested in relocating your business to the State of Tennessee, one of Cole Law Group’s business attorneys would be happy to assist you. Just give us a call at 615-490-6020 or send a contact message via our website. Our office is centrally located at 1648 Westgate Circle, Suite 301, in Brentwood.

_____________________________

¹ https://sos.tn.gov/press-releases/tennessee-marks-10-years-of-new-business-growth

² This is not tax advice. Please contact a tax professional for any advice related to tax.

With over 1,600 home-based businesses operating in the city of Nashville, Tennessee, could it be true that many of them are illegal?¹ Section 17.16.250 of Title 17 of the Metropolitan Code of Laws that governs residential zoning ordinances contains a provision regarding “home occupations”.² The term home occupations refers to the practice of individuals operating small businesses from their residential homes. The provision prohibits the home occupations, or home businesses, from performing services for customers on their residential property. For many home businesses, customers and customer interaction are the sole source of profit. In “Music City,” a community full of artists, musicians, and other creative professionals, this ordinance presents several problems for those wanting to teach music and art or even to create music and art with other professionals in the industry.  

This exact zoning ordinance presented an issue for a local Nashville music producer, Lij Shaw. Since 2015, Mr. Shaw has been in a battle with the City of Nashville to shut down the prosperous music studio located in his residential home. Mr. Shaw first received a letter from the city demanding his home music studio be closed and no longer open for business. Two years later, Mr. Shaw partnered with Pat Raynor, an individual running a hair salon out of her home and protested the residential zoning ordinance in court. The legal battle between Mr. Shaw and the City of Nashville was recently heard by the Supreme Court of Tennessee. The decision of the Supreme Court of Tennessee will not be released for several months.  

Can Owners Conduct Business From Their Home During Covid-19?  

As the COVID-19 pandemic persisted, the Nashville Metropolitan community was afforded the opportunity to operate small businesses from their residential homes, with a newly added benefit. On July 7, 2020, Nashville Metro Council approved the Home Occupation Modernization Bill (bl2019-48) in order to allow small business owners to continue to profit from their businesses in the safety and security of their own homes. This ordinance additionally allows business owners in Davidson County, for the very first time in the county’s history, to engage with customers in the business owner’s home legally. However, the Bill contains several restrictions as follows: a restriction that no more than five employees may reside within the dwelling at a home occupation location;  a restriction that no more than one part-time or full-time employee not living within the dwelling may work at the home business; that there can be a maximum of six visits by customers per day; and no more than three customer trips per hour are allowed at the site of the home business.  

Why Should Nashville Small Business Owners Care? 

In the current COVID-19 landscape, the opportunity to run a business out of your home and be able to serve customers at that business is highly valuable. Businesses based in a residential home afford individuals with an easily attainable avenue to entrepreneurship. It also presents small business owners with a much more cost-effective way to conduct business, avoiding the expenditure of renting or purchasing a commercial space. Reducing the cost to start up a business can be a great asset to the longevity of the business and help reduce the risks associated with starting a business.  

The Home Occupation Modernization Bill is set to expire in January of 2023. Upon expiration, it will again be illegal for home businesses to serve customers on site in a residential home. However, with the help of Mr. Shaw, Mrs. Raynor, and other like-minded individuals, the residential zoning ordinance prohibiting customers to enter and to be served by home businesses may no longer exist.  

If you are thinking about starting a business, we can help. Just call an Entrepreneurial Business Attorney at Cole Law Group in Brentwood (615-490-6020) and we will be happy to speak with you about your new business venture.  

____________________________ 

1 https://ij.org/report/finding-american-dream-home; see also http://www.tnledger.com/editorial/article.aspx?id=52959. 

2 Metro. Code § 17.16.250(D)(1).

At the outset, some of the most significant changes brought about by the new law concern restrictions on the ability of government and private businesses to require individuals to provide proof of having received a COVID-19 vaccination. Specifically, the new law states that “[a] private business, governmental entity, school, or local education agency shall not compel or otherwise take an adverse action against a person to compel the person to provide proof of vaccination if the person objects to receiving a COVID-19 vaccine for any reason.”¹ Importantly, the new law contains a broad definition of “private business,” and includes individuals, sole proprietorships, corporations, limited liability companies, partnerships, trusts, associations, and non-profit entities.² In addition, the new law contains a broad definition of “adverse action,” and includes discrimination “against a person by denying the person employment, privileges, credit, insurance, access, products, services, or other benefits.”³ As a result, under the new law, most private businesses and governmental entities in Tennessee are prohibited from requiring any individual from providing proof of vaccination in the event the person objects to receiving a COVID-19 vaccine for any reason, and this prohibition is applicable to employees, customers, or just about any individual who accesses products or services of a private business or covered governmental entity. 

Nevertheless, the new law does contain several important exceptions to the general prohibition of requiring proof of having received a COVID-19 vaccination. The new law does not prevent the implementation of COVID-19 vaccine mandates for Medicare and Medicaid providers, or assisted-care living facilities, federal government contractors or subcontractors, schools, or employers that submit notice in writing to the comptroller of the treasury that compliance with the new law would result in a loss of federal funding.⁴ Moreover, the new law does not prohibit “a place of entertainment” in Tennessee from requiring proof of a negative COVID-19 test in order to gain admission, or to allow a person to voluntarily provide proof of vaccination or proof of COVID-19 antibodies in lieu of presenting a negative COVID-19 test in order to gain admission to a “place of entertainment.”⁵ 

The new law also addresses the implementation of mask mandates throughout much of Tennessee. Under the new law, with certain exceptions, governmental entities are no longer permitted to “require a person to wear a face covering as a condition to access the governmental entity’s premises or facilities, or to receive the benefits of the governmental entity’s products or services, unless severe conditions exist and the requirement is in effect for no more than fourteen (14) days.”⁶ The new law further defines “severe conditions” to mean that: (1) the Governor of Tennessee has declared a state of emergency for COVID-19; and (2) a county has an average rolling fourteen-day COVID-19 infection rate of at least 1,000 new known cases of COVID-19 for every 100,000 residents of the county based on the most recent data published by the department of health.⁷ When “severe conditions” do not exist, many governmental entities are also prohibited from requiring employees from wearing a face covering as a term or condition of employment, or from taking an adverse action against an employee for failing to wear a face covering.⁸ 

In order for a school to implement a mask mandate under the new law, “severe conditions” must exist, the school’s governing body must adopt a policy requiring all persons on school property to wear a face covering, and the school must provide face coverings meeting the U.S. National Institute for Occupational Safety and Health N95 classification of air filtration for persons 12 years of age and older.⁹ Even if these requirements are met, the new law does not permit schools to require a person to wear a face covering if the person provides documentation from the person’s healthcare provider that wearing a face covering is contraindicated for the person, or if the person objects to wearing a face covering because of the person’s sincerely held religious belief.¹⁰ As with the implementation of COVID-19 vaccine mandates under the new law, there are several exceptions to the prohibitions on the implementation of mask mandates set forth in this article, including for Medicare or Medicaid certified providers, entities operating on property owned, managed, or secured by the federal government, and healthcare providers.¹¹ Also, and very importantly, the new law does not prohibit private employers or businesses from requiring face coverings for employees, customers, or any other members of the public receiving services. 

Beyond significantly curtailing the ability of many government entities and private businesses from implementing COVID-19 vaccine and other similar mandates, the new law makes several other noteworthy changes to Tennessee law. The new law permits certain individuals to receive unemployment retroactively if they left employment because of a failure or refusal to receive a COVID-19 vaccine when it was previously required by their employer.¹² Furthermore, except in certain cases of minors subjected to abuse or dependent and neglected children, the law restricts the ability of healthcare providers to administer a COVID-19 vaccine to a minor without first obtaining written consent from the minor patient’s parent or legal guardian.¹³ Moreover, the law limits civil liability for deaths “arising from COVID-19, unless the claimant proves by clear and convincing evidence that the person proximately caused the loss, damage, injury, or death by an act or omission constituting gross negligence or willful misconduct.”¹⁴ 

Importantly, the new law also contains an enforcement mechanism in the event of violations. Specifically, the new law creates a private right of action for injunctive relief, compensatory damages, and reasonable attorneys’ fees for any aggrieved person against an alleged violator.¹⁵ By its own terms, the new law terminates on July 1, 2023.¹⁶ 

The precise contours or Tennessee’s new COVID-19 law have yet to be fully litigated in the courts, and there are still several areas of uncertainty regarding the new law’s enforceability and constitutionality. Nevertheless, there can be little doubt that Tennessee’s new COVID-19 law has already had a profound impact on Tennessee’s response to the COVID-19 pandemic, and the new law’s effects will likely continue to be felt by private businesses, employers, employees, government entities, and many more until at least July 1, 2023. 

If you think Tennessee’s new COVID-19 law may impact you or a loved one, you should seek the legal advice of a knowledgeable attorney immediately. During these uncertain times, it is extremely important to seek the assistance of a legal professional to learn your legal rights and obligations as Tennessee continues to navigate through the COVID-19 pandemic. Contact a Nashville attorney with Cole Law Group today at 615-490-6020 to schedule a consultation and learn about how Tennessee’s new COVID-19 law may impact you. 

ABOUT THE AUTHOR: Andy Goldstein 

Andy Goldstein is an Associate Attorney at Cole Law Group. He is a graduate of Belmont University College of Law and is admitted to practice in Tennessee state courts, the United States Court of Appeals for the Sixth Circuit, and the Immigration Courts of the Executive Office for Immigration Review (EOIR). Andy focuses his practice in the areas of Family Law, Defamation & Privacy, Probate, and Complex Civil Litigation. Cole Law Group clients benefit from Andy’s passion for the law and dedication to serving them well. 

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an experienced lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author. 

_________________________________

¹ Tenn. Code Ann. § 14-2-102(a).

² Tenn. Code Ann. § 14-1-101(15). Notably, the new law does not define a “private business” to include schools, Medicare or Medicaid certified providers, certain healthcare providers enrolled in Medicare or Medicaid, or certain assisted-care living facilities.

³ Tenn. Code Ann. § 14-1-101(1)(A). Moreover, the definition of “adverse action” in the new law also means to “discharge, threaten, or otherwise discriminate against an employee in any manner that affects the employee’s employment, including compensation, terms, conditions, locations, rights, immunities, promotions, or privileges.”

⁴ Tenn. Code Ann. § 14-6-102.

⁵ Tenn. Code Ann. § 14-2-102(b).

⁶ Tenn. Code Ann. § 14-2-103(a)(1).

⁷ Tenn. Code Ann. § 14-1-101(20).

⁸ Tenn. Code Ann. § 14-2-103(a)(2).

⁹ Tenn. Code Ann. § 14-2-104.

¹⁰ Tenn. Code Ann. § 14-2-104(c).

¹¹ Tenn. Code Ann. § 14-1-101(8).

¹² Tenn. Code Ann. § 14-3-101.

¹³ Tenn. Code Ann. § 14-4-103(a)-(b).

¹⁴ Tenn. Code Ann. § 14-5-101.

¹⁵ Tenn. Code Ann. § 14-6-103.

¹⁶ Tenn. Code Ann. § 14-6-104.

When my daughter was very young, she went through a phase where she would create “clubs” that she would then ask friends and family members to join. These clubs were usually fan related, e.g. the “Hannah Montana Fan Club”, or cause related, e.g. the “Save the Sea Lions Club.”  The process of joining the club was usually very simple; all you had to do was sign next to the “x” on her membership list and you were in.

Picture now a November night in 2004. I am in my home office reviewing documents while simultaneously trying to participate in a conference call when my daughter approaches with what I perceive to be her typical club application. As I struggle to manage documents while cradling the phone to my ear, she holds a paper up and whispers, “Daddy, sign here!”  As usual, I sign at the “x” and then quickly return to my call.

Shortly after the conference call is concluded, my daughter dances into the office singing, “I’m getting a puppy!  I’m getting a puppy!”  In an attempt to suppress her enthusiasm, I reply, “You know, your mother and I have had a discussion about this, and I am not sure we can get a puppy this year.” Whereupon, my daughter proclaims, “Yes, I am getting a puppy!  You signed a contract!” and held up the paper I had signed which, to my chagrin, clearly stated at the top of the page, “I Todd Cole hereby agree to give a puppy to my daughter for Christmas.”

So was my daughter correct?  Was I contractually obligated to buy her a puppy for Christmas? Before answering that question, a quick review of contract law is warranted.  To begin with, there are generally three types of contracts; a) express, b) implied in fact, and c) implied in law.

An express contract is an agreement, the terms of which have been explicitly spelled out. The agreement can either be written or oral. Common (and significant) contract terms are subject matter, price, quantity, type of work to be performed, date of delivery of goods or completion of services, and how payment is to be made.  In the case of my daughter’s Christmas wish, her contract was written and contained some of the above terms, as the subject matter was a puppy (quantity 1) to be delivered on Christmas morning (date of delivery of goods).  Her contract would, therefore, be considered an express contract.

However what if, instead of my daughter presenting me with a written contract to sign, we had instead made a deal over the dinner table that, in exchange for her making her bed every morning before Christmas, she would receive two dollars which she could then use to purchase her puppy.  Let’s say I started off keeping to the deal and paid my daughter $2 / day as she diligently made her bed every morning.  On December 1^st, however, I decide this deal isn’t really a good one for me and, after my daughter makes her bed that morning, I refuse to pay her another $2.  Here, there exists an unambiguous offer, an unambiguous acceptance, and a mutual intent to be bound.  A court could, therefore, find that a contract implied in fact had been formed and I was obligated to continue paying my daughter as long as she continued performing under our contract.

A contract implied in law is a legal fiction created to prevent injustice or to avoid unjust enrichment.  A contract implied in law operates as a valid contract for purposes of providing a remedy only; the general rules of contract do not apply.  As an example, let’s say that while eating at the dinner table, I begin to choke on a chicken bone.  My daughter, even at her young age, has learned about the Heimlich Maneuver and rushes to my aid.  After saving my life, my daughter sends me a bill for her services for $200, which coincidentally happens to be the price of a Christmas puppy. Under these circumstances, a court could find my daughter should be compensated for the very important service she rendered and provide her with an award equal to the value of that service.

Having completed this quick review, we now know that my daughter had me sign an express written agreement obligating me to provide her with a puppy on Christmas morning.  Did it matter that I did not realize what I was signing?  A mistake is an error in the meaning of words, laws, or facts which causes one or both parties to enter into a contract without fully understanding the outcomes or responsibilities implied by the contract. Here, only one party (me) made the mistake of believing the contract was to join a club and not for a puppy (my daughter was extremely clear on that point) and, therefore, a unilateral mistake occurred. 

A court usually has two remedies to correct a unilateral mistake.  First, if I could show that my daughter knew I was unaware that the document I signed was for a puppy (and that essentially she was tricking me), then the court might order rescission, which completely cancels the contract and restores both parties to their pre-contract positions.  Second, if the dispute between my daughter and me was not whether she would get a puppy, but whether that puppy would be a Great Dane or a Chihuahua, the court could order reformation or a modification of the contract to reflect our initial understanding of the breed she was to acquire. Neither of these outcomes would, however, be assured.

My last hope of avoiding a Christmas puppy lay with something called consideration. In contract law, consideration is broadly defined as a bargained for exchange of value between parties to a contract. Exchange of value does not always mean money; it can also be property, a promise, or doing or not doing something. Here, my daughter’s contract for a puppy runs into some trouble and would most likely be voidable as, under her contract, I promise to give her a puppy, but I receive nothing in exchange.  How much value is needed for the consideration requirement to be satisfied?  Over time, the amount of consideration necessary has dwindled, with most courts now finding a “peppercorn” of consideration enough.

So, you might ask, did I play the consideration card or was there a puppy under our Christmas tree that year?  The answer is that there was not only one puppy but two. My son, upon learning of my daughter’s contract, very quickly took the position that he was a third-party beneficiary and therefore was also entitled to a puppy (a topic beyond the scope of this discussion).

If you take anything away from this blog post, please remember — never sign anything without reading it first. If the document is extremely long, or technical, and your eyes are crossing after a few minutes, consider hiring an attorney to review it and to assist you in understanding what your rights and obligations may be before executing the agreement.

Cole Law Group would be happy to help.  Just call us at (615) 490-6020 to arrange a consultation. 

HIPAA is a complicated law with numerous provisions. HIPAA is the abbreviation of the 1996 Health Insurance Portability and Accountability Act, Public Law 104-191.¹ HIPAA included provisions in the law that authorized the U.S. Department of Health & Human Services (HHS) to adopt national standards to protect the privacy of personal health information. HIPAA mandated that HHS take action that ensures privacy protection for individually identifiable health information.² 

According to the official HHS website, HIPAA requirements include those found in Public Law 104-191, a final privacy rule adopted in December 2000, a final Security Rule adopted in February 2003, an Enforcement rule, and an Omnibus Rule.³ An unofficial version of all HIPAA regulations is found in a combined regulation text on the HHS website.⁴ This unofficial version of regulations is 115 pages long. You may read the full regulations for yourself if you want. However, the purpose of this article is to provide a snapshot into what HIPAA is and the basic requirements it imposes on businesses.

First, it is important to note, that HIPAA does not impose requirements on all businesses. Instead it only applies to the following entities: “(1) A health plan; (2) A health care clearinghouse; (3) A health care provider who transmits any health information in electronic form in connection with a transaction covered by this subchapter; or (4) an individual or “business associate” that provides certain services to a covered entity.”⁵

Thus, your business is only regulated by HIPAA to the extent that your business falls into one of the four above listed categories. The first three are fairly self-explanatory. Savvy business owners likely understand if their business falls within those categories. The more difficult determination is if your business is a “business associate” of one of the first three types of businesses. Business Associate is further defined in § 160.103 to include Health information organizations, someone that offers personal health records, and a subcontractor that “creates, receives, maintains, or transmits protected health information on behalf of the business associate.”⁶ § 160.103(4) carves out exceptions from the definition of business associates. These exceptions include: health care providers to the extent that they are disclosed information regarding treatment of the individual, plan sponsors when they disclose to a group health plan, a government agency, and other limited circumstances.⁷

Hypothetically, if your business contracts with a health care provider to provide database storage, would this use subject you to HIPAA requirements? Most likely, yes. Providing database storage may be determined to be a business associate, as your role would be to receive or maintain protected health information on behalf of your company’s client. Also, you should be able to determine who your customers are to determine if they are health care providers or other covered entities. What if your company provides generally applicable services, such as email available to the public, yet you do not contract directly with a heath care provider? Then the business owner would not have a contract that authorizes the business to create, receive, maintain, or transmit protected health information. Thus, that company should not be subject to HIPAA regulation.

Why Should My Company Pay Attention to HIPAA Compliance?

HHS takes their obligations to enforce HIPAA regulations seriously as evident by the large amount of HIPAA fines and settlements that have been handed out in recent years.⁸ There were 10 reported fines and settlements in 2018. Notably, Anthem, Inc. agreed to a $16,000,000 settlement for numerous HIPAA violations in October 2018. Anthem’s hefty fine was due to the extreme scale of a its 2015 data breach which affected around 78 million people being stolen by hackers.⁹

In many areas of the law, it is wiser to plan ahead and spend money on compliance than stick your head in the sand and risk an extreme penalty if you are caught. If you are unsure whether your business may have HIPAA compliance issues, you should read more on the subject and consider consulting with an attorney or hiring your own HIPAA compliance expert.

For much more detailed HIPAA information, I recommend reading the HIPAA Journal’s Compliance Checklist.¹⁰

_____________________________________

¹ See https://www.hhs.gov/hipaa/for-professionals/index.html

² See https://aspe.hhs.gov/report/health-insurance-portability-and-accountability-act-1996

³ See https://www.hhs.gov/hipaa/for-professionals/index.html

⁴ https://www.hhs.gov/sites/default/files/ocr/privacy/hipaa/administrative/combined/hipaa-simplification-201303.pdf?language=es

⁵ C.F.R. Part 160.102.

⁶ C.F.R. § 160.103.

⁷ C.F.R. § 160.103.

⁸ https://www.hipaajournal.com/summary-2018-hipaa-fines-and-settlements/

⁹ Id.

¹0 https://www.hipaajournal.com/hipaa-compliance-checklist/