2010 Tennessee Code
Title 62 - Professions, Businesses and Trades
Chapter 43 - Tennessee Employee Leasing Act
62-43-108 - Application for license Minimum standard Applicants for licenses by reciprocity Restricted licenses.

62-43-108. Application for license Minimum standard Applicants for licenses by reciprocity Restricted licenses.

(a)  Every applicant for an initial staff leasing company license shall file with the commissioner a completed application on a form prescribed and furnished by the commissioner, together with forms, materials, and information that is necessary to enable the commissioner to ascertain if the applicant meets the requirements of this chapter and accompanied by a nonrefundable application fee. As a condition of licensure under this chapter, any applicant that is not a resident of or is domiciled outside of this state must first be licensed as a staff leasing company or as a staff leasing group in the state in which it is a resident or is domiciled if licensing is required by that state.

(b)  (1)  Applicants for licensing as a staff leasing company or staff leasing group shall meet the following minimum standards:

          (A)  If an individual, the applicant shall have reached the age of majority;

          (B)  If a partnership, the applicant shall state the names and home addresses of all partners and indicate whether each partner is a general or a limited partner. The applicant shall include a copy of the partnership agreement or an affidavit signed by all partners to the effect that no written partnership agreement exists;

          (C)  If a corporation, the applicant shall state the names and home addresses of all officers, directors and shareholders who own a five percent (5%) or greater interest in the corporation and a list of shareholders who formerly owned a five percent (5%) or greater interest in the corporation or its predecessors in the preceding five (5) years. The applicant shall include a certificate of good standing from the secretary of state evidencing its qualification to do business in this state;

          (D)  If a group, the parent entity or other entity authorized to act on behalf of the group shall be the applicant. The applicant shall include for each staff leasing company within the group the information required in subdivisions (b)(1)(B) or (C). The applicant shall also include a guarantee, on a form approved by the commissioner, executed by each staff leasing company within the group guaranteeing payment of all financial obligations with respect to wages, employment taxes, insurance premiums and employee benefits of each other member within the group. A staff leasing group may satisfy the reporting and financial requirements of this chapter on a consolidated basis;

          (E)  The applicant shall provide the trade name or names under which the applicant conducts business, its taxpayer or employer identification number, the address of its principal place of business in this state and the address of any other office within this state through which the applicant intends to conduct business as a staff leasing company or staff leasing group. If the applicant's principal place of business is located in another state, that address shall be provided;

          (F)  The applicant shall provide a list by jurisdiction of each name under which the applicant has operated in the preceding five (5) years, including any alternative names, names of predecessors and names of related business entities with common majority ownership. The applicant shall also provide detailed information on the background of each controlling person to the extent deemed necessary by the commissioner;

          (G)  The applicant shall provide other information that the commissioner deems necessary to show that the applicant and each controlling person is of good moral character, business integrity and financial responsibility.

     (2)  The commissioner may deny an application for licensure or renewal citing lack of good moral character. Conviction of a crime within the last seven (7) years shall not automatically bar any applicant or licensee from obtaining a license or continuing as a licensee. The commissioner shall consider the type of the crime committed, the crime's relevancy to the staff leasing industry, the length of time since the conviction and any other factors deemed relevant by the commissioner.

     (3)  (A)  The applicant shall demonstrate for the commissioner and maintain an accounting net worth of no less than the greater of:

                (i)  Twenty-five thousand dollars ($25,000); or

                (ii)  Twenty dollars ($20.00) per leased employee not to exceed in total fifty thousand dollars ($50,000).

          (B)  For the purposes of this subdivision (b)(3), “leased employees” means those employees of the licensee or applicant who are leased or assigned to clients, whether located within or without this state, at the time of computation. The net worth shall be demonstrated by providing a financial statement prepared in accordance with generally accepted accounting principles, consistently applied, and accompanied by at least a compilation report by an independent certified public accountant. At the applicant's option, application may be made contingent on showing required net worth prior to the issuance of the license but subsequent to the conditional approval of the license. Documents submitted to establish net worth shall reflect net worth as of a date no more than six (6) months prior to the date on which the application is submitted. All financial statements submitted shall be attested by the president, chief financial officer and at least one (1) control person of the staff leasing company or staff leasing group. In meeting the specified net worth requirement, the applicant may provide to the commissioner a surety bond, letter of credit or marketable securities acceptable to the commissioner. A surety will not be acceptable to satisfy this requirement unless the applicant submits sufficient evidence to satisfy the commissioner that the surety has adequate resources to satisfy the obligations of the surety, which shall be subject to audit or verification by the commissioner or the commissioner's agents.

(c)  Upon payment of all requisite fees, the commissioner shall license by reciprocity a nonresident applicant that is licensed as a staff leasing company or staff leasing group and in good standing in the applicant's state of domicile or residence under the following conditions:

     (1)  The requirements to obtain a license in the applicant's state of domicile or residence are the same or substantially similar to the requirements to obtain a license in this state;

     (2)  The applicant's state of domicile or residence grants the same or similar reciprocity privileges to staff leasing companies and groups that reside in or are domiciled in and licensed by this state; and

     (3)  The applicant demonstrates that it meets all requirements to obtain a license in this state with the exception of subdivision (b)(3).

(d)  A nonresident applicant for a license by reciprocity shall be exempt from demonstrating that it meets the requirements of subdivision (b)(3) if the applicant is licensed and in good standing in its state of domicile. The applicant shall be required to demonstrate that it meets all other licensure requirements.

(e)  The commissioner may issue a restricted license to a staff leasing company or staff leasing group resident or domiciled in another state for limited operation within this state under the following conditions:

     (1)  If the applicant's state of domicile or residence provides for licensing of staff leasing companies, the applicant is licensed and in good standing in its state of domicile or residence, which state grants a similar privilege for restricted licensing to staff leasing companies or staff leasing groups resident or domiciled and licensed in this state under this chapter.

     (2)  The applicant does not maintain an office in this state and does not maintain a sales force or have a sales representative in this state; and

     (3)  The applicant shall not have more than one hundred (100) leased employees working in this state.

(f)  An applicant to be granted a restricted license shall be exempt from the requirements of subdivision (b)(3) if the applicant is licensed and in good standing in its state of domicile.

(g)  An applicant for nonresident or restricted license shall file, on a form provided, an appointment of a recognized and approved entity as its attorney to receive service of legal process issued against it in this state.

(h)  Any license issued shall remain the property of the commissioner, and a licensee shall immediately return the license to the commissioner upon demand by the commissioner.

[Acts 1994, ch. 950, § 9; 1996, ch. 887, §§ 5-8.]