Business

What You Must Know Before Relocating Your Limited Liability Company to Tennessee

May 18, 2022 | by Cole Law Group, PC

The number of new Tennessee businesses has grown year-over-year every quarter for ten (10) Years.^[i] Tennessee remains an attractive location for business owners. I often consult with clients about moving their businesses from Florida, California, or other states to Tennessee. Unfortunately, this is not a simple process and business owners should carefully consider their options before making this important decision. Generally, the business owner moving a limited liability company to Tennessee has two (2) options.

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.

“Working from Home” the Nashville Way

March 21, 2022 | by Cole Law Group, PC

Is Operating a Business Out of Your Home Illegal in Nashville?

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.

TENNESSEE’S NEW COVID-19 LAW AND ITS IMPACT ON ENFORCEMENT OF MANDATES

March 14, 2022 | by Andy Goldstein

On November 12, 2021, Tennessee Governor Bill Lee signed a new law addressing several issues related to the response to the 2019 Novel Coronavirus, SARS-CoV-2, coronavirus disease (COVID-19), and COVID-19 vaccinations. The new law became effective immediately upon being signed by Gov. Lee on November 12, 2021. Among other things, the new law significantly curtails the government’s ability to impose mask mandates and prohibits the government and most private businesses from compelling individuals from providing proof of vaccination if the person objects to receiving a COVID-19 vaccine for any reason. This article discusses some of the important changes the new law brings to public policy surrounding the response to the COVID-19 pandemic throughout Tennessee.

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

We’ve Got a Contract! (Sort of)

September 13, 2019 | by Todd G. Cole

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.”

Is Your Tennessee Business Subject to HIPAA Regulations?

February 1, 2019 | by Cole Law Group, PC

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