Business - Name Change vs. Transfer of Ownership

BUSINESS - NAME CHANGE VS. TRANSFER OF OWNERSHIP

A name change occurs when the name on the registration or title changes but the owner is the same legal entity before and after the name change. This can happen when a company converts from one type of entity to another by filing conversion documents with the Tennessee Secretary of State. For example, a corporation can convert to become a limited liability company (LLC); an LLC can convert to become a corporation; a limited partnership can convert to become an LLC; and so on. Under Tennessee law, the company is the same legal entity before and after the conversion.

A transfer of ownership occurs when the name on the registration or title changes and the first owner is a different legal entity from the second owner. This can happen when a company sells the vehicle to another company; an entity distributes a vehicle to a shareholder, member, or partner; one company merges into another company; and so on.

Name Change

The following table gives examples of common scenarios where a company converts from one entity type to another but remains the same legal entity. These scenarios should be treated as a name change on the title and registration. Please note that these are general scenarios and your customer may have different facts or present different documentation; you can call the county clerk support line for assistance with those customers.

TITLE OR REGISTRATION IS IN NAME OF	NEW TITLE OR REGISTRATION IS IN NAME OF	SAME LEGAL ENTITY	REQ. DOC	TYPE OF TRANSACTION	NEW PLATE ISSUED	SALES TAX DUE
Corporation, Limited Partnership, or General Partnership	LLC	Yes	Certificate of Conversion	Name Change	No	No
Limited Partnership or General Partnership	LLP	Yes	Conversion of a Limited Liability Partnership	Name Change	No	No
Limited Partnership or General Partnership	Corporation	Yes	Articles of Entity Conversion or Certificate of Conversion	Name Change	No	No
LLC	Corporation, Limited Partnership	Yes	Certificate of Conversion	Name Change	No	No
Individual	Sole Prop. of that individual	Yes	Affidavit	Name Change	No	No
Sole Prop.	Individual that owns the Sole Prop.	Yes	Affidavit	Name Change	No	No

Transfer of Ownership

The clerk should treat other transactions as a change of ownership. The type of documentation required will depend on the transaction; common examples of acceptable documentation are a bill of sale, an affidavit, or a legal document authorizing the transfer of the vehicle. Here are some common examples of a change in ownership:

TITLE OR REGISTRATION IS IN NAME OF	NEW TITLE OR REGISTRATION IS IN NAME OF	SAME LEGAL ENTITY	REQ. DOC	TYPE OF TRANSACTION	NEW PLATE ISSUED	SALES TAX DUE
Shareholder	Corporation	No	n/a	Change of Ownership	Yes	Yes
Corporation	Shareholder	No	n/a	Change of Ownership	Yes	Yes
Corporation, LLC, Limited Partnership, Individual	Corporation, LLC, Limited Partnership, Individual	No	n/a	Change of Ownership	Yes	Yes
SMLLC	SMLLC with the same sole member (if both SMLLC's are disregarded for federal income tax purposes)	No	affidavit	Change of Ownership	Yes	No
Limited Partnership, LLP, or General Partnership	Partner	No	n/a	Change of Ownership	Yes	Yes
Partner	Limited Partnership, LLP, or General Partnership	No	n/a	Change of Ownership	Yes	Yes
SMLLC	Single member of the SMLLC	No	Certificate of Existence and member ID	Change of Ownership	Yes	No
Member of LLC	SMLLC when single member is LLC member	No	Certificate of Existence and member ID	Change of Ownership	Yes	No
Multi-member LLC	Member of the LLC	No	n/a	Change of Ownership	Yes	Yes
Member of the LLC	Multi-member LLC	No	n/a	Change of Ownership	Yes	Yes
Trust	Individual/entity IF there is consideration (selling price greater than $0)	No	n/a	Change of Ownership	Yes	Yes
Trust	Beneficiary and NO consideration (sales price is $0)	No	Deed of Trust and beneficiary ID	Change of Ownership	Yes	No

 Link to Sales Tax Guide