Complete Guide to Operating Agreements and Corporate Bylaws in Forest Hills
Operating agreements and corporate bylaws set the foundation for how a business is run, who manages it, and how decisions are made. For Forest Hills business owners, clear governing documents help prevent disputes, streamline operations, and provide a record of agreed responsibilities. This page explains the role of these documents, how they differ for LLCs and corporations, and why having written, tailored provisions matters. Whether forming a new entity or updating existing documents, understanding these basics helps owners protect their interests and keep their business running smoothly in Tennessee.
Well-drafted governance documents support long-term planning by defining ownership rights, voting procedures, and transfer restrictions. In Forest Hills and greater Tennessee, operating agreements and bylaws also help preserve liability protections by showing that the business operates as a distinct entity. Clear provisions for decision making, dispute resolution, capital contributions, and management succession reduce the risk of costly conflicts. This guide gives practical information about what to include, common pitfalls to avoid, and how to approach revisions when ownership or business needs change over time.
Why Strong Operating Agreements and Bylaws Matter for Your Business
A carefully composed operating agreement or set of bylaws provides structure and predictability for owners and managers. These documents clarify rights and responsibilities, address how disputes are handled, and set rules for admitting or removing members and shareholders. For Tennessee companies, having explicit rules reduces ambiguity that can otherwise lead to litigation or business interruption. Clear governance documents also support investor confidence and can be essential during financing, sale, or succession planning. Investing time to draft tailored provisions often prevents costly disagreements down the road and helps preserve business continuity.
Jay Johnson Law Firm: Practical Business Law Support in Tennessee
Jay Johnson Law Firm provides business and corporate services to clients across Tennessee, including Forest Hills and Davidson County. The firm assists owners with creating, reviewing, and updating operating agreements and corporate bylaws so governance matches practical needs. Work includes tailoring provisions for management structure, capital contributions, voting and consent procedures, and member or shareholder transfers. The firm emphasizes clear drafting that anticipates common disputes and supports orderly transitions without overcomplicating routine operations. Clients receive focused guidance on how documents interact with state law and business realities.
Understanding Operating Agreements and Bylaws
Operating agreements and bylaws perform a similar role for different entity types by defining internal governance, decision pathways, and the allocation of rights and obligations among owners. An operating agreement typically governs an LLC and addresses issues like member voting, profit distributions, and management duties. Bylaws govern corporations and set out procedures for board meetings, shareholder rights, and officer roles. Both documents work alongside formation filings and state law to shape how the business functions in practice. Knowing which provisions need to be explicit and which follow default statutory rules is an important first step.
When creating governance documents, owners should evaluate how their business operates day to day and where conflicts could arise. Sample provisions cover capital contributions, allocation of profits and losses, decision thresholds, transfer restrictions, buyout mechanisms, and dispute resolution procedures. Tailored provisions can address management transitions, investor protections, and confidentiality concerns. Reviewing these documents after major business events such as new investment, changes in ownership, or a planned sale ensures the governance structure remains aligned with current objectives and reduces the risk of unintended consequences under Tennessee law.
Definitions: What Operating Agreements and Bylaws Cover
An operating agreement is a written contract among LLC members that explains ownership percentages, management arrangements, capital obligations, and distribution formulas. Bylaws are the internal rules a corporation uses to organize its board structure, meeting procedures, officer duties, and shareholder voting. Both documents may include provisions for indemnification, transfer restrictions, succession planning, and dispute resolution. While some small entities rely heavily on default state rules, having written provisions tailored to the business provides clarity and helps align expectations among owners and managers in both routine situations and exceptional events.
Key Elements and Processes in Governance Documents
Important components of operating agreements and bylaws include ownership structure, management authority, decision-making thresholds, contribution and distribution rules, and exit mechanisms. Additional provisions often cover procedures for admitting new owners, handling deadlocked votes, setting meeting notice and quorum rules, and resolving disputes through mediation or arbitration. Drafting should consider how documents interact with financing arrangements and transfer restrictions to avoid unintended conflicts. Clear processes for amendments and recordkeeping support compliance and help the business react predictably as circumstances change.
Key Terms and Glossary for Governance Documents
Understanding common governance terms helps owners navigate operating agreements and bylaws. This glossary defines frequently used terms such as member, shareholder, manager, board, quorum, majority vote, supermajority, transfer restrictions, buy-sell provisions, and distributions. Each term affects how decisions are made and how value flows between the business and its owners. Clarifying terminology reduces ambiguity and ensures that all parties interpret the document consistently, supporting smoother operations and fewer disputes when issues arise in the life of the company.
Member
Member refers to an owner of a limited liability company who may hold voting rights, financial interests, and management responsibilities as specified in the operating agreement. Member rights can vary significantly depending on whether the LLC is member-managed or manager-managed, and the agreement can allocate differing levels of control and economic interest to various members. Documented definitions of member roles clarify who can take actions on behalf of the company, who contributes capital, and how distributions are calculated, which helps prevent conflicts among owners.
Quorum
Quorum specifies the minimum number of members, shareholders, or directors that must be present at a meeting for decisions to be valid. Setting a quorum helps balance the need for legitimate decision-making with flexibility so routine business can proceed without undue delay. Operating agreements and bylaws commonly define quorum as a percentage of ownership interest or a fixed number of board members, and they may include special rules for extraordinary decisions. A clear quorum rule prevents challenges to actions taken at meetings and supports orderly governance.
Transfer Restrictions
Transfer restrictions are provisions that limit or condition the sale, assignment, or pledge of ownership interests, often to preserve control or protect remaining owners from unwanted third parties. Common mechanisms include right of first refusal, buy-sell provisions, consent requirements, and lock-up periods. These provisions define acceptable transfers, valuation methods for buyouts, and procedures for voluntary or involuntary transfers, providing predictability during ownership changes and helping to maintain the intended business structure and relationships among owners.
Buy-Sell Provision
A buy-sell provision sets terms for the purchase or sale of an ownership interest when certain events occur, such as death, disability, termination of employment, or voluntary departure. This clause typically establishes triggering events, valuation methods, and procedures for completing the transaction. Well-drafted buy-sell terms reduce uncertainty during ownership transitions and help ensure fair treatment of departing and remaining owners. Including a clear buy-sell framework in governance documents fosters a smoother transfer process and reduces the likelihood of contestable outcomes.
Comparing Limited and Comprehensive Governance Approaches
Business owners can choose between limited governance documents that cover basic defaults and more comprehensive agreements that address a wide range of contingencies. Limited approaches are often faster and less costly initially, but they may leave gaps that produce disputes later. Comprehensive documents require more upfront attention and drafting but frequently save time and money by clarifying expectations around ownership changes, capital needs, and decision-making. Evaluating current and foreseeable business needs helps determine whether a basic framework suffices or if tailored, robust provisions are more appropriate for long-term stability.
When a Simple Governance Document May Be Appropriate:
Single-Owner or Close-Knit Ownership Groups
A limited approach can be sensible when a single owner operates the business or when a very small group of owners who trust one another control the company and have aligned objectives. In those settings, the likelihood of internal disputes is relatively low and the administrative burden of a comprehensive document may not be justified. Even in these cases, having a basic written agreement that addresses ownership, management authority, and succession ensures clarity and preserves liability protections under Tennessee law while keeping compliance and recordkeeping straightforward.
Low-Risk Operations with Stable Ownership
Businesses with stable ownership, predictable cash flows, and limited external financing may find a concise operating agreement or bylaws adequate. When ownership changes are unlikely and the owners prefer informal governance, a shorter document that records the essential arrangements and legal requirements can be cost-effective. It is still important to cover distribution rules, management authority, and basic transfer restrictions, because even low-risk ventures benefit from written clarity that reduces chances for confusion or disagreements in the future.
When a Comprehensive Governance Framework Is Advisable:
Multiple Owners, Investors, or Planned Growth
A comprehensive governance approach tends to be necessary when there are multiple owners with differing interests, outside investors, or plans for significant growth. Detailed provisions can address investor protections, dilution, decision-making thresholds, and exit strategies. Clear rules for capital calls, profit allocations, and dispute resolution help manage complex relationships and future capital events. Owners who anticipate fundraising, partnerships, or eventual sale benefit from thorough drafting that anticipates likely scenarios and provides a solid roadmap for implementing strategic decisions.
Complex Ownership Structures and Succession Planning
When ownership includes family members, multiple classes of equity, or plans for succession and estate transition, a comprehensive set of governing rules helps avoid disputes and ensure smooth transitions. Provisions for valuation, buyouts, voting rights by class, and mechanisms to handle incapacity or death are vital to preserving business continuity. Detailed governance documents also align incentives among stakeholders and set clear expectations for roles and compensation, which benefits long-term stability and reduces the likelihood of contested outcomes during critical transitions.
Benefits of a Comprehensive Governance Approach
A comprehensive operating agreement or bylaws package promotes predictability by addressing likely and unlikely situations, reducing ambiguity and the need for court intervention. Detailed provisions concerning decision-making thresholds, buy-sell terms, transfer restrictions, and dispute resolution provide owners with a roadmap for action when disagreements arise. This clarity preserves relationships, protects business value, and supports smoother transactions such as sales or investments. Comprehensive documents also document the owners intentions, which can be important evidence if the company’s separate status is ever questioned.
Comprehensive governance supports long-term planning by aligning legal structure with business strategy. It protects minority and majority interests through agreed procedures and valuation methods. Well-documented rules for meetings, fiduciary duties, and officer responsibilities enhance operational efficiency and governance transparency. Investors and lenders often expect clear governance documentation, which can facilitate financing or sale negotiations. By anticipating future events and setting mechanisms to address them, comprehensive agreements reduce the likelihood of disruptive disputes and help preserve the enterprise value for all stakeholders.
Reduced Risk of Disputes and Litigation
Comprehensive documents reduce ambiguity by clearly allocating authority and setting procedures for common conflicts, which typically lowers the probability of disputes escalating to litigation. By including structured methods for resolving disagreements and specifying valuation and buyout mechanics, parties can address disputes without prolonged court involvement. When owners know the procedure to follow, they are more likely to comply with established processes, enabling quicker resolution and minimizing business disruption. This predictability can preserve working relationships and reduce legal costs over time.
Stronger Position for Financing and Transactions
Entities with comprehensive governance documents present a more reliable picture to investors, lenders, and buyers, because detailed provisions outline how decisions are made and how ownership changes will be handled. Clear rules for capital contributions, dilution, and exit mechanics reduce uncertainty for third parties assessing the business. Well-documented governance can streamline due diligence and increase confidence in transaction outcomes. For owners planning to seek outside capital or to position the business for sale, complete governing documents are often a practical asset.
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Practical Tips for Drafting Governance Documents
Start with business goals in mind
Begin document drafting by identifying your short- and long-term business goals, because governance provisions should align with practical objectives. Consider ownership structure, plans for capital raising, and succession expectations. Clarify who makes day-to-day decisions and who approves strategic or extraordinary actions. Anticipating likely business events and the owners intentions helps shape provisions that are both workable and protective. Taking time to map out priorities before drafting reduces the need for frequent amendments and provides a clearer framework for operations and growth.
Be specific about transfer and buyout procedures
Regularly review and update documents
Governance documents should be revisited after major business events such as new investments, ownership changes, or shifts in strategy. Periodic reviews ensure provisions remain aligned with operational realities and legal changes, and help address emerging risks before they become problems. A scheduled check of the operating agreement or bylaws gives owners a chance to revise distribution rules, management structures, or dispute resolution methods based on experience. Keeping documents current reduces ambiguity and makes transitions smoother when changes occur.
Reasons to Create or Update Operating Agreements and Bylaws
Owners should consider drafting or updating governance documents when adding owners, accepting outside investment, preparing for sale, or planning for succession. Changes in business size, operations, or leadership may create circumstances where default statutory rules do not reflect the owners intentions. Written agreements provide clarity on distributions, authority, and transfer restrictions that default state provisions may not address. Investing in clear, tailored governance documents at these milestones can reduce future disputes and support smoother transactions and leadership transitions.
Updating governing documents is also prudent when business relationships change or new risks emerge, such as an influx of capital, entrance into new markets, or altered tax considerations. Revising an operating agreement or bylaws to match the business reality helps maintain liability protections and ensures decision-making processes reflect current needs. Thoughtful updates address evolving responsibilities, refine dispute resolution procedures, and preserve value for all owners by creating a clear, shared framework for how the business operates.
Common Situations That Trigger Governance Document Work
Typical circumstances prompting governance document drafting or revision include admitting new members or shareholders, preparing for outside investment, changing management structure, handling owner departures, and planning for succession. Other triggers are disputes among owners, significant changes in business operations, or preparing for sale or refinancing. Addressing these situations proactively with clear written provisions reduces uncertainty and helps avoid contentious, last-minute negotiations that can damage relationships and business value.
Admitting New Owners or Investors
Bringing in new owners or investors changes ownership percentages and can affect voting, dilution, and profit sharing. An updated operating agreement or bylaws should define the rights of incoming parties, any preferential terms, and mechanisms to protect existing owners. Provisions for capital contributions, valuation, and transfer restrictions help manage the financial and control implications of new stakeholders, limiting the potential for unexpected shifts in power and ensuring that all parties understand their role and obligations.
Owner Disputes or Deadlocks
When owners disagree or a deadlock occurs, having pre-agreed dispute resolution and deadlock-breaking mechanisms can prevent business paralysis. Governance documents can set out mediation, arbitration, buyout procedures, or escalation paths for resolving disputes. Clear rules for calling special meetings, exercising voting rights, and handling contested decisions reduce the likelihood that routine disagreements become prolonged conflicts. Preparing these procedures in advance preserves operational stability and helps maintain focus on running the business.
Succession and Estate Planning Needs
Succession planning often necessitates revising governance documents to address death, disability, or retirement of an owner. Operating agreements and bylaws can define how interests are transferred, how successors are selected, and valuation processes for buyouts. Aligning governance with estate planning objectives reduces uncertainty for heirs and remaining owners, and supports continuity. Including clear procedures for transfers and leadership changes mitigates disruption and helps the business remain functional through owner transitions.
Forest Hills Attorney for Operating Agreements and Bylaws
If you operate a business in Forest Hills or elsewhere in Tennessee and need guidance on operating agreements or bylaws, help is available to draft, review, and update governance documents. The practice assists with tailoring provisions to your companys structure and goals, aligning documents with state law, and anticipating common disputes. Whether forming a new entity or revising existing rules, the goal is to produce clear, practical documents that work day-to-day and stand up to legal scrutiny when necessary.
Why Work with Jay Johnson Law Firm for Governance Documents
Jay Johnson Law Firm focuses on practical business law support for Tennessee owners, including drafting and revising operating agreements and bylaws. The firm guides clients through decisions about management structure, transfer restrictions, and dispute mechanisms to ensure governing documents reflect operational realities and owner intentions. This approach emphasizes clarity and enforceability while balancing business needs and statutory defaults, helping owners maintain control over important governance matters and avoiding ambiguity that can lead to disputes.
The firm assists clients at formation and at key milestones, such as investment events, succession planning, or owner transitions. Services include reviewing existing documents for consistency, proposing practical amendments, and drafting new agreements that document agreed procedures for meetings, voting, distributions, and transfers. By aligning legal documents with business plans, clients gain a clear framework that supports transactions and day-to-day management while reducing the risk of future disagreements that could harm the company.
Clients appreciate a focused approach that balances legal protections with operational practicality, keeping governance documents readable and enforceable. The firm provides guidance on how documents interact with Tennessee law and with financing or sale processes. Whether you are organizing a startup, preparing for outside funding, or planning owner succession, a clear set of governance rules helps preserve business continuity and value while reducing friction among owners and stakeholders.
Get Help Drafting or Updating Your Operating Agreement or Bylaws
Our Process for Drafting and Updating Governance Documents
The process begins with an initial consultation to understand ownership structure, business goals, and any immediate concerns. Next comes a review of existing documents and relevant agreements, followed by drafting tailored provisions and discussing practical implications. After revisions and client approval, finalized documents are delivered with guidance on implementation and recordkeeping. Periodic reviews can be scheduled to ensure documents continue to meet changing needs and to support transactions such as investments or ownership transfers.
Step 1: Initial Consultation and Document Review
The first stage focuses on gathering information about the companies structure, current agreements, and the owners priorities. This includes identifying key decision-makers, capital arrangements, and any existing disputes or planned transactions. A review of current filings and documents identifies gaps between practice and written terms. Understanding these factors allows drafting to be targeted and relevant to the businesss operational and strategic needs.
Gathering Ownership and Operational Details
Collecting background details includes documenting ownership percentages, management roles, capital contribution history, and any outstanding obligations. It also covers understanding how routine decisions are made and how major strategic choices have been handled historically. This information helps tailor governance provisions so they reflect actual practice while resolving areas of uncertainty. Clear factual background reduces the risk of drafting provisions that conflict with established practices or statutory requirements.
Identifying Prior Agreements and Third-Party Obligations
Reviewing preexisting agreements such as investor documents, loan covenants, or employment contracts is essential to ensure governance provisions align with outside obligations. Conflicts between documents can create legal and operational problems, so early identification allows drafting to harmonize terms and prevent unintended consequences. Considering third-party obligations at the outset helps avoid revisions later and supports a governance package that works within the broader contractual framework of the business.
Step 2: Drafting and Negotiation
Drafting converts the agreed structure and terms into clear, durable provisions. During this stage, owners review proposed language and negotiate any disputed points. The drafting process focuses on clarity, enforceability, and practical application to everyday business operations. Revisions continue until the owners are comfortable that the document reflects their intentions, addresses foreseeable events, and integrates with other company agreements and obligations.
Proposing Tailored Governance Provisions
Proposed provisions cover management authority, voting thresholds, capital contributions, distributions, transfer restrictions, buy-sell mechanics, and dispute resolution procedures. Each clause is designed to balance owner protection with flexibility for business needs. The proposal explains practical effects of key provisions and provides alternatives when differing owner preferences arise. Clear explanations help owners understand potential outcomes and make informed choices about which provisions to include.
Negotiating Terms Among Owners
Negotiation focuses on reconciling differing owner priorities and finding workable compromises. This may include adjusting voting thresholds, setting valuation formulas, or defining management roles. Open discussion and clear drafting reduce ambiguity and help the parties reach agreements they can live with long term. The negotiation process also identifies areas where additional protections or flexibility are required, leading to a stronger, more durable governance framework.
Step 3: Finalization and Implementation
After revisions and approval, finalized documents are adopted by the owners and implemented with appropriate corporate records and filings as needed. Adoption typically involves signatures, board or member approvals consistent with state law, and updating minute books or corporate records. The firm provides guidance on recordkeeping, steps to effectuate transfers or amendments, and recommendations for periodic review to ensure the documents continue to serve the business effectively.
Adoption, Signing, and Recordkeeping
Finalizing governance documents requires formal adoption consistent with state requirements, signatures from authorized parties, and careful recordkeeping. Maintaining a completed agreement in the companys records, updating meeting minutes, and noting any related filings helps preserve the companies legal posture and demonstrate that the business observes its internal procedures. Proper documentation is important for maintaining liability protections and for future transactions that may review governance history.
Ongoing Review and Amendment Procedures
Governance documents should include clear amendment procedures and a plan for periodic review so the agreement reflects the companys evolving needs. Regularly revisiting provisions after major events or annually ensures that rules for voting, transfers, and management remain practical and effective. Including amendment mechanics in the document simplifies future updates and ensures owners know how to make changes consensually without disrupting daily operations or creating legal uncertainty.
Frequently Asked Questions About Operating Agreements and Bylaws
What is the difference between an operating agreement and bylaws?
An operating agreement governs a limited liability company and outlines member rights, management structure, and financial arrangements, while bylaws govern a corporation, setting rules for the board, officers, and shareholder meetings. Both serve to document how the entity will be run and provide clarity about responsibilities, voting, and procedures. Drafting clear documents reduces reliance on statutory defaults and helps align daily operations with owner intentions.Choosing the correct provisions depends on entity type and business needs. Important elements include voting thresholds, meeting procedures, transfer restrictions, and dispute resolution rules. Tailoring these provisions helps ensure the document functions practically and protects the owners interests in both routine and extraordinary circumstances.
Do I need an operating agreement or bylaws in Tennessee?
Tennessee does not always require a written operating agreement or bylaws for formation, but having them provides legal and practical benefits. A written agreement documents owners intentions, clarifies authority, and supports liability protections by showing the business observes internal governance and separate operations. Without clear documents, default state rules apply, which may not match the owners objectives.Drafting governance documents is particularly important when there are multiple owners, outside investors, or plans for growth. Written rules reduce uncertainty, aid in dispute resolution, and provide a more organized framework for financing, sale, or succession planning, making them a prudent step for many businesses.
Can operating agreements or bylaws be changed later?
Yes, operating agreements and bylaws can generally be amended if the document includes procedures for doing so and the required owners or board approval is obtained. Amendment provisions typically specify voting thresholds or consent requirements and any formalities such as written approvals or recorded minutes. Following those procedures ensures amendments are valid and enforceable under Tennessee law.It is also wise to review and update governance documents after significant business events such as new investments, ownership changes, or strategic shifts. Periodic review helps maintain alignment between written provisions and day-to-day operations, reducing the chance of conflicts and ensuring the documents remain practical and effective.
What should a buy-sell provision include?
A buy-sell provision should outline triggering events that require or allow a purchase of an ownership interest, such as death, disability, divorce, bankruptcy, or voluntary departure. It should set a valuation method for determining the purchase price, specify timing and payment terms, and address any financing or installment options. Rights of first refusal or call/put options are common features to control how interests transfer.Clear buy-sell mechanics reduce uncertainty and protect both departing and remaining owners by providing an agreed path for transition. Including dispute resolution methods and procedures for valuation disagreements can prevent protracted contests and preserve business continuity during ownership changes.
How do transfer restrictions protect owners?
Transfer restrictions limit how and to whom ownership interests can be sold or assigned, protecting the company from unwanted third parties and preserving control among existing owners. Mechanisms include consent requirements, rights of first refusal, and approval thresholds for admitted transferees. These tools balance owner mobility with the desire to maintain a stable ownership base and consistent management.By specifying procedures for transfers and any required approvals, the governance document reduces the risk of surprise ownership changes that could disrupt operations or dilute value. Clear transfer rules provide predictability for owners and potential investors by making the process transparent and enforceable.
When should I update my governance documents?
Governance documents should be reviewed after major business events such as admitting new owners, securing outside investment, making significant capital calls, or changing management structure. Reviews are also recommended when tax considerations change or when the company plans an eventual sale or succession transition. Regular reviews ensure the documents remain aligned with operational needs and legal requirements.Periodic check-ins, such as annual reviews or milestone-triggered updates, help identify provisions that require revision and prevent small discrepancies from becoming larger disputes. Proactive maintenance of governance documents supports smoother decision-making during times of change and growth.
How do governance documents affect disputes?
Well-drafted governance documents reduce the likelihood of disputes by clarifying authorities, responsibilities, and procedures for decision-making. Clear rules for voting, meetings, transfers, and buyouts give owners a roadmap to follow when disagreements arise and can often resolve conflicts without resorting to litigation. Provisions for mediation or arbitration further support private dispute resolution and preserve business relationships.When disputes do reach courts or arbitrators, having written documents that reflect owner intent and consistent practice strengthens the companys position. Clear records and signed governance agreements make it easier to demonstrate agreed processes and expectations, which helps achieve predictable outcomes.
Can bylaws control officer compensation and duties?
Bylaws often set out officer roles, responsibilities, and procedures for appointment and removal. They can also authorize the board to set or approve officer compensation, subject to any restrictions agreed by shareholders. Including these provisions provides clarity on who has the authority to make personnel and compensation decisions and how those actions are documented.For significant compensation decisions or plans that affect ownership or control, bylaws can be coordinated with shareholder agreements or board resolutions. Clear documentation of authority and approval processes reduces uncertainty and supports transparent governance around officer roles and pay.
What role do governance documents play in financing?
Governance documents play an important role in financing by clarifying decision authority, transfer restrictions, and rights related to new capital. Investors and lenders review operating agreements and bylaws to understand voting thresholds, dilution protections, and exit mechanics. Clear provisions can facilitate due diligence, speed negotiations, and reduce the risk of surprises that could derail financing.Including investor protections, such as information rights or preemptive rights, and clear procedures for issuing new equity helps align expectations and provides a framework for capital raises. Well-documented governance can therefore improve the businesss attractiveness and credibility to prospective funders.
How do I begin drafting or revising my documents?
Begin drafting or revising governance documents by gathering key facts about ownership, management, and any existing agreements that affect the company. Identify priorities such as investor protections, transfer restrictions, or succession plans, and outline how business decisions are currently made versus how owners want them to be made going forward. This preparation allows drafting to be practical and aligned with business goals.Consulting with legal counsel to translate those priorities into clear, enforceable provisions helps avoid unintended consequences and ensures compliance with Tennessee law. Counsel can also assist with negotiation among owners and with formal adoption and recordkeeping once the documents are complete.