How To Start An LLC In Tennessee In Easy Steps. Form An LLC In Tennessee

To start an LLC in Tennessee, follow these steps: choose a unique business name, appoint a registered agent, file articles of organization with the Tennessee Secretary of State, create an operating agreement, obtain an EIN from the IRS, and fulfill any additional state-specific requirements and permits.

Introduction to Start An LLC In Tennessee: If you’re looking to start a new business venture in the vibrant state of Tennessee, understanding how to Start an LLC (Limited Liability Company) is a crucial first step. In this guide, we’ll walk you through the straightforward and easy steps to start an LLC in Tennessee, ensuring that you’re well-prepared to establish your business presence in this dynamic and growing market.

Whether you’re a seasoned entrepreneur or a first-time business owner, our comprehensive instructions will help you navigate the process of forming your LLC in Tennessee with confidence. Let’s get started on your journey to establishing your business and achieving your entrepreneurial dreams.

Most Popular
1
ZenBusiness Logo

ZenBusiness

All-in-one platform with worry-free services
A variety of additional services is available
Fast & Simple Business Formation Guaranteed
Affordable formation packages for small business
Cheapest LLC & Registered Agent Service
Responsive customer support
Best Free LLC Formation
2
Incfile logo

Incfile

LLC formation service providers with low prices
A wide variety of other services is available
Worry-free compliance & quick order turnaround
No hidden fees or automatic service renewals
Good Registered Agent Service
Outstanding customer feedback
Online Access to Incorporation Documents
Best Customer Support
3
Northwest Registered Agent logo

Northwest Registered Agent

Hassle-free business formation service
Lifetime customer support from local experts
Includes registered agent service
Offers Mail Forwarding services
Best For Incorporation
4
FirstBase logo

Firstbase.io

Best for LLC or C-Corp formation
Registration in Wyoming or Delaware
Tax ID (EIN) setup with the Internal Revenue Service
Helps your US business bank account setup
Physical address in the US
Over $150,000 in exclusive deals & perks
Free 1:1 calls with tax & legal experts
Provides Registered agent service
Provides Lifetime expert support
Includes post-incorporation documents
5
Inc Authority logo

Inc Authority

Free LLC service in addition to paid packages
Simple-to-use checkout process
Basic company registration is completely free
Great range of extra services
Includes registered agent & tax consultant
6
Doola LLC

Doola

100% Accurate Formation & Refund Guarantee
Employer Identification Number
US Bank Account + Payment Processor
US Mailing Address
US State + IRS Tax Filings
Stress-Free Annual Compliance Reminders
Digital Document Access
7
StartGlobal

StartGlobal

Name Check and Clearance
Get A Registered Agent
US Phone Number
Formation And EIN
US Address with Mail Forwarding
US Business Bank Account With Debit card
Ongoing Business Support

Starting an LLC in Tennessee can be a transformative step toward realizing your entrepreneurial aspirations. To ensure a smooth and hassle-free launch, it’s essential to tap into the right services and resources that can guide you through the intricacies of the process.

In this guide, we will highlight the recommended services and essential steps you need to take to start an LLC in Tennessee successfully. From legal assistance to online filing platforms and more, we’ll help you navigate the terrain with confidence, so you can concentrate on turning your business vision into a thriving reality.

What Is A Limited Liability Company (LLC)?

A Limited Liability Company (LLC) is a popular and flexible business structure that combines elements of a corporation and a partnership.

In simple terms, an LLC provides its owners, known as members, with limited liability protection. This means that the personal assets of the members, like their homes or savings, are generally protected in case the business faces debts or lawsuits.

The Limited Liability Company (LLC) business structure was introduced in the state of Tennessee on January 1, 1994, following the enactment of the Tennessee Limited Liability Company Act.

This legal framework provided business owners in Tennessee with a flexible and advantageous option for structuring their companies, offering limited liability protection and simplified management.

Many companies can benefit from an LLC as a corporate structure. Members of a limited liability company (LLC) might be a single person or a group of people.

Learn more about limited liability companies:

What Are The Benefits Of An LLC In Tennessee?

Start An LLC In Tennessee

A Limited Liability Company, or LLC, is a hybrid company form that combines the features of a corporation with those of a partnership or sole proprietorship. It protects your personal assets from your business assets, allowing you to protect your personal assets.

LLCs are the most prevalent structure for small businesses in Tennessee. This is due to the simplicity with which a limited liability corporation (LLC) can be formed and operated and the numerous benefits it offers. Depending on the type of business structure you choose, a unique feature may be a benefit or a negative. The following are some of the advantages of how to start a business in Tennessee. Let’s have a look at some of the benefits of LLC in Tennessee:

1. Pass-through taxation

If you form a new company as an S corporation in Tennessee, the company or firm will not have to pay any taxes. Instead, the corporation’s profit or loss will be distributed to its stockholders. Earnings are taxed before being dispersed to owners, and profits are taxed again when owners declare their part of the profits on their personal tax returns.

2. Limited Liability Protection

“Personal liability protection” is one of the most significant benefits of forming a Tennessee LLC. As the proprietor of an LLC, you will not be held personally liable for any of the company’s debts. Your personal assets, such as your automobile, property, and bank accounts, will be protected from LLC creditors.

3. Independent life

When you set up a new business as a Corporation in Tennessee, it will be self-contained. This means that a stockholder’s incapacity or death would not have a serious effect on the company’s activities.

4. Flexible Taxation

A limited liability business (LLC) can pay income tax in one of three ways. Being taxed as an S company is one alternative. An S corporation is a tax structure, not a specific sort of corporate entity.

5. Increased Credibility

Incorporating a limited liability company (LLC) gives your company more legitimacy. A limited liability company (LLC) is considered a more corporate management structure than a sole privately owned company. Customers and partners will recognize you as a respectable company if you include LLCs in your company.

6. Ownership Flexibility

There are limited constraints on how you can arrange the management and ownership of an LLC in Tennessee:

  • You can form a single-member LLC or a multi-member LLC.
  • Members can control a Multi-Member LLC, which is referred to as member-managed.
  • Manager-managed LLCs are those that are controlled by a manager who is appointed by the members.

7. Perpetual Existence

A new company incorporated as a Corporation in Tennessee will have perpetual succession. This means that a stockholder’s incapacity or death would not have a serious effect on the company’s activities.

8. Simplicity

Limited liability businesses in Tennessee are simple to start and maintain, requiring minimal paperwork and cost. LLCs, unlike C companies, are not obliged to designate formal officer responsibilities, have annual meetings, adopt bylaws, or keep track of business records and decisions.

Disadvantages Of Forming An LLC In Tennessee

There are various disadvantages to forming an LLC In Tennessee, which include the following:

  • Since LLCs, like sole proprietorships, are pass-through businesses, LLC owners must pay taxes on their portion of the LLC’s net income, whether or not they get a payout.
  • High registration cost compared to sole proprietorships and general partnerships 
  • An LLC, unlike a corporation, cannot raise funds by issuing stock
  • Members of an LLC found it more difficult to obtain loans compared to a corporation

Ready to Start Your LLC with Ease? Let ZenBusiness Be Your Guide!

Steps For How To Start An LLC In Tennessee

In Tennessee, forming an LLC is not exceptionally difficult or expensive, but it is a multi-step procedure that necessitates the use of certain specialized forms. If you make a mistake or don’t meet all of the conditions, you’ll have to start the procedure all over again, which will cost you time and money. To ensure that you’ve done everything correctly, you need to follow some specific steps. This procedure will be assisted by the following step-by-step instructions. Let’s get started with how to register an LLC in Tennessee.

Here are the steps you need to take to form an LLC in Tennessee which will get you started today:

1. Choose A Name For Your Tennessee LLC

The first step in forming an LLC in Tennessee is deciding on a name. You won’t be able to proceed without a name because it will appear on all of your formal formation documentation. Every LLC operating in Indiana is required to have a distinctive name. For branding considerations, your business name should be distinctive, as well as legal. The name of your LLC must be distinct from the names of other businesses registered with the Tennessee Secretary of State. For more information, check the Tennessee Business Name Database.

If you search the company database and discover that a name is available, Tennessee allows you to reserve it for up to 120 days by submitting Form SS-9425. The filing fee is only $20. Filling out this form ensures that the name you want will be available when you complete the other processes of incorporating an LLC in Tennessee.

The following are the Tennessee LLC naming guidelines:

  • The phrase “limited liability corporation” or one of its derivatives must be in your name (LLC or L.L.C.)
  • Your LLC’s name cannot contain any words that could be mistaken for a government department (FBI, Treasury, State Department, etc.)
  • Restricted words (e.g., bank, attorney, university) may need additional paperwork and the inclusion of a licensed professional in your LLC, such as a doctor or lawyer
  • Your business name must be distinct from any other limited liability company, corporation, limited liability partnership, or limited partnership in Tennessee.

Additional Information:

  • Check Name Availability: Do a name search on the State of Tennessee website to be sure the name you choose isn’t already used. Check Tennessee Naming Guidelines.
  • Reserve Your LLC Name: It’s a great idea to reserve your LLC name with the Tennessee Secretary of State as it protects the name from being used by another company before your LLC is formally incorporated in the state.

Read our guide on Top Business Name Generators that will help you to name your business and create a free logo with the best logo makers.

2. Appoint A Registered Agent In Tennessee

Before you can legally file to form your Tennessee LLC, you’ll need to choose a registered agent in the state. Your LLC must maintain a Tennessee Registered Agent at all times in order to do business in the state. A Registered Agent in Tennessee is a person or business that receives legal mail and papers directed to your Tennessee LLC. You can act as your own registered agent or hire any professional registered agent service. Check our guide on the Cheapest Registered Agent Service

Legal documentation and tax notices will be accepted on your LLC’s behalf by your registered agent. When you submit your Certificate of Formation, you will identify your registered agent.

A Tennessee registered agent must meet the following criteria such as:

  • The Registered Agent for your Tennessee LLC must have a physical address in the state
  • If your LLC’s Registered Agent will be a single person, he or she must be at least 18 years old and a Tennessee resident
  • If a person or company is based outside of the Tennessee business office
  • A designated registered agent must provide an address of a registered office in Tennessee and must be found during normal business hours
  • In order to be eligible as a registered agent in Tennessee, the business must already be operating in the state when the LLC is formed.

3. File Your Tennessee LLC Articles Of Organization

In Tennessee, a limited liability company (LLC) is founded by filing Articles of Organization with the Secretary of State. The Certificate of Organization is the paperwork you’ll submit to the Department of State to formally register your LLC. When you’re ready, submit Articles of Organization to the Tennessee Secretary of State to formalize your LLC.

The articles can be filed either online or by mail. Each existing LLC member in Tennessee is charged $50, with a minimum price of $300 and a maximum fee of $3,000. For online filings, there is also a processing cost.

The following information must be included in the Articles of Organization:

  • Name of the LLC, address of the principal office, email address (optional), and phone number
  • Name and address of the registered agent
  • Articles that are out of date are no longer effective (if not immediate)
  • Names and addresses of the Articles’ signatories
  • A member’s, organizer’s, or their representative’s signature

4. Establish Company Records

Your LLC’s books and records must be accurate and comprehensive. The articles of organization you filed are the initial documents in your LLC’s file. Many more public documents will be created by your LLC, including:

  • Minutes of the meeting 
  • Operating Agreement
  • EIN Verification Letter
  • Throughout the LLC’s existence, amendments and other filings are made

5. Receive a Certificate From the State

Articles of Organization have often been approved quickly in Tennessee. Approval applications are only accepted online. After the LLC’s creation paperwork is filed and approved, the state will provide you with a certificate confirming the LLC’s formal existence. The materials for approval will be forwarded to your email address.

The LLC will be able to obtain an Employer Identification Number (EIN), business licenses, and a business bank account with the help of this certificate.

6. Obtain A Tennessee Business License

In order to operate in Tennessee, certain sectors will require a company registration. You may require one or more types of licenses, including:

  • Licenses issued by your city or county.
  • Certain skilled vocations require professional licenses.
  • Environmental permits.
  • Licenses for health and safety.
  • Permits are required by zoning.
  • Liquor licenses, for example, are regulatory permits.
  • Sales tax exemptions are available.

7. Prepare the Tennessee LLC Operating Agreement

Although preparing a detailed LLC operating agreement is not a legally required step for incorporating an LLC in Tennessee, it is strongly suggested for all emerging limited liability businesses. You should consider developing an operating agreement as part of your LLC strategy. The purpose of this paper is to establish how your firm will operate.

The operating agreement is the basic document that spells out the members’ rights, powers, responsibilities, debts, and obligations to one another and to the LLC. The agreement is strictly internal and has not been lodged with the Secretary of State.

If an LLC does not establish an operating agreement, the articles of organization, rules, and/or member control or limited liability company agreement will serve as the operating agreement.

The following should be included in the operating agreement:

  • Define the business structure of the LLC.
  • Determine each LLC member’s particular roles and obligations.
  • Describe how the LLC will be managed.

An LLC may suffer substantial legal and operational challenges if it does not have an operating agreement that spells out the precise responsibilities of its members.

8. Hold The Organizational Meeting

The organizational meeting is the LLC’s initial gathering of members. To hold this meeting, you’ll need your filed articles of incorporation and your operating agreement. This meeting’s minutes should be kept and filed in your company’s record book.

9. Get A Tennessee LLC EIN

In the United States, all newly created LLCs must get an Employer Identification Number (EIN) from the Internal Revenue Service. The nine-digit EIN is a company’s equivalent of a social security number, and it’s required to pay income taxes, submit tax returns, open corporate bank accounts, and do a variety of other activities. Your Tennessee LLC’s “social security number” is a Federal Tax ID Number. For taxation and reporting purposes, the IRS uses it to identify your LLC.

You can apply for EIN online, by fax, or by mail. Federal tax ID numbers are free and don’t charge anything.

You will need an EIN number for the following:

  • Open a business bank account
  • Register for business licenses and permits
  • Transact business with other companies
  • Taxes are filed and managed at the federal and state levels

10. Comply With Tennessee Employer Obligations

In addition to the steps outlined so far, Tennessee LLCs with employees must also comply with the following requirements:

  • Employers are required by state and federal law to report new employees to the Tennessee Department Of Employment Security within 20 days of their hire date.
  • Employers in Tennessee are required to withhold state and federal income taxes from their employee’s paychecks. Employers must remit withheld taxes to the state on a regular basis.
  • Employers are liable to compensate unemployment taxes in Tennessee. Every firm is allotted a tax rate depending on its age, industry, and history of unemployment insurance claims.
  • A small-business owner in Tennessee is required to acquire workers ’ compensation as soon as they recruit their first employee. Employers can self-insure or obtain workers’ compensation coverage from a private insurer or the state insurance fund.

11. Comply With Federal Requirements

In Tennessee, LLCs must follow both state and federal regulations. Most LLCs are treated as pass-through entities under federal law, just as they are in most states. On their personal income tax returns, LLC members disclose their portion of LLC income. The LLC does not have to pay federal income taxes.

An LLC’s members can choose to have it taxed as a C-corporation at the federal level, in which case the LLC will pay a flat federal corporate tax of 21%.

Best Services For Starting An LLC In Tennessee

Important Steps After Forming The Tennessee LLC?

After registering your Tennessee LLC, you need to follow some important responsibilities. Here are some important steps you need to consider, after forming an LLC in Tennessee:

  • Open a business bank account: A business bank account lets you keep personal and business costs separate, which is necessary to keep your LLC’s corporate entity intact. In the event that your LLC or business is sued, a corporate veil shields your personal assets from creditors. Also read, How To Open A US Bank Account As A Non-Resident?
  • Get a business credit card: A company credit card will help you separate personal and business costs while also creating a credit record for your firm.
  • Hire a business accountant: An accountant for your business can help you save money on taxes and prevent penalties and fines. Accounting and payroll are made easier with the help of an attorney.
  • Get Business Insurance For Tennessee LLC: Risk management is aided by business insurance. General liability, professional liability, and workers’ compensation are the most prevalent types of business insurance.

Keep Your Company Compliant

  • You need to research and get a Tennessee license and permits
  • File your Tennessee annual reports statement online with the Tennessee Department of State at the end of the month in which the LLC was formed
  • In the next step, you need to understand Tennessee sales tax requirements and seller’s permits
  • Understand the federal tax requirements to report income to the IRS each year using Form 1065 Partnership Return

Final Words

LLCs are easier to set up than other business structures. Small businesses, especially start-ups, can easily incorporate an LLC in Tennessee for a very low cost. LLCs have a tax advantage known as “pass-through taxation,” which allows them to avoid having to pay some taxes. To start a limited liability company, you’ll need considerably less paperwork and legal processes.

Forming an LLC in Tennessee takes time and effort, but once you have everything in place, you can rest comfortably so that your business is ready to thrive. Several ambitious entrepreneurs may have pondered how to form a limited liability business in Tennessee (LLC). You must go through a multi-step process that includes everything from naming your company to hiring a designated individual, as well as signing a multi-member operating agreement.

We strongly recommend Incfile, a popular business formation service that makes starting and operating your own private limited company simple. It’s completely free to form an LLC with Incfile, and it only costs $125 to file the formation and recruiting application. If you’re seeking a quick and easy LLC formation, ZenBusiness is the way to go.

Are you ready to start an LLC in Tennessee? If you have any questions just leave them in the comment section below! Our experts will reach you soon!

Frequently Asked Questions (FAQs)

1. How much does it cost to set up an LLC in Tennessee?

The Secretary of State of Tennessee charges $50 per LLC owner included in the filing, with a $300 minimum total fee. The filing fee for the Articles of Organization cannot surpass $3,000.

2. Do LLCs pay taxes in Tennessee?

LLCs do not pay income taxes by law; only their shareholders do. Most LLCs, however, are subject to a franchise and excise tax in Tennessee. This tax must be registered with the Department of Revenue (DOR). You can register by mail or in person at a Department of Revenue office.

3. Do I need a business license if I have an LLC?

Whereas most states do not require a business license to incorporate an LLC, you must follow your state’s processes. An LLC must register with the state and file the necessary paperwork. Even while you don’t need a business permit to incorporate an LLC, you’ll almost certainly need one to run it as a company.

4. Do I need an operating agreement for my Tennessee LLC?

Although operating agreements are not required in Tennessee, they are strongly recommended. An operating agreement will assist in protecting your limited liability status, eliminate financial and managerial misunderstandings, and ensure that you, not state law, choose the rules that govern your company.

5. How do I file an LLC in Tennessee?

Domestic LLCs must fill out Form SS-4270, whilst foreign businesses must fill out Form SS-4233. Forms can be mailed or filed electronically. For LLC formation or authorization to conduct business in Tennessee, you’ll spend a minimum of $300 and a maximum of $3,000.

6. How much does an EIN cost in Tennessee?

It is entirely free to apply for an EIN for your Tennessee LLC. The IRS does not charge a fee for obtaining an EIN.

7. Does Tennessee require a registered agent?

A registered agent is a person or business that agrees to receive legal mail on your behalf. All businesses excluding General Partnerships (GP) must have a registered entity in Tennessee under all circumstances.

8. Can I be my own registered agent in TN?

Yes, any business owner or employee who is over the age of 18 and has a Tennessee street address can serve as the company’s registered agent in Tennessee.

Start LLC In Any US States:

We will be happy to hear your thoughts

Leave a reply

RebelLink
Logo
Compare items
  • Total (0)
Compare
0