How to Create an LLC in Tennessee

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How to Form an LLC in Tennessee:
5 Simple Steps to Get Started
According to the IRS, each state may use different regulations around forming an LLC, and you should check with your state if you’re interested in starting a Limited Liability Company. To simplify the process of forming an LLC in the state of Tennessee, we’ve put together a step-by-step guide to detail each step of the process and answer any questions you may have.

Step 1
Name Your Tennessee LLC

Your first consideration when choosing a name for your LLC is that it be unique from any other business in the state of Tennessee. You can quickly and easily do a name check on the Tennessee Secretary of State website business name database to verify the business name you want is available. For a $20 fee, you can reserve a name for 120 days by filing an Application for Reservation of Limited Liability Company Name (Form ss-4228) by mail.

In order to comply with Tennessee state law, your company’s name must end with the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” You can also abbreviate “Limited” as “Ltd.” and “Company” as “Co.” You must avoid the words “Corporation” or “Incorporated” in your LLC’s name. If your LLC name contains the words “insurance company,” you’ll need to seek written approval from the Tennessee Department of Commerce & Insurance. By the same token, you’ll need written approval from the Tennessee Department of Financial Institutions before you can use the words “banking,” “bank,” “banks,” “credit union,” or “trust” in your company’s name.

Step 2
Appoint a Registered Agent in Tennessee

The state of Tennessee requires all LLCs to have a registered agent for service of process. This means your LLC must have an entity that agrees to physically accept any legal papers on the company’s behalf should it be sued. This entity does not have to be an individual person. The registered agent can be any resident of the state of Tennessee or a business entity authorized to do business in Tennessee so long as the agent has a physical street address within the state.

Step 3
File Tennessee Articles of Organization
To officially create your LLC in the state of Tennessee, you’ll need to complete the Articles of Organization (Form ss-4270) and file them with the Tennessee Secretary of State. For a $50 per member fee, this can be done either online or by mail. Note that a minimum of a $300 filing fee will apply and a maximum of $3,000. To complete this form you will need to know the following:
  1. The final name and address of your LLC
  2. The name and address of the company’s registered agent
  3. Whether the LLC will be member-managed or manager-managed
  4. Fiscal year close month
  5. If the document is not to be effective upon filing by the Secretary of State, when the delayed effective date and time is
  6. Number of members at the date of filing
  7. The duration of the LLC (if not perpetual)

Step 4
Create an Operating Agreement

You may want to consider preparing an operating agreement to outline the ownership and operating procedures for your LLC.

Though not required by the state, an operating agreement will set the guidelines for running your company. This does not need to be filed with the state, but it can go a long way toward ensuring your company’s success.

Step 5
Apply for an EIN and Review Tax Requirements

An IRS Employer Identification Number (EIN) is required of your LLC unless it is a single-member LLC with no employees. Obtaining an EIN is as easy as completing the application on the IRS website.

It’s possible your company will need to register with the Tennessee Department of Revenue. Whether or not your company needs to follow this step will depend on the exact types of taxes it will be collecting and/or has been collecting from the state. The Application for Registration can be filed online. It’s also possible that your LLC will have to register for Tennessee’s franchise tax, excise tax, and/or gross receipts tax. See the Tennessee Department of Revenue site for details.

If your LLC will be selling a physical product, you’ll need to register for a sellers permit through the Tennessee Department of Revenue website. This will allow you to collect sales tax on taxable sales. Additionally, if you have employees, you’ll need to register for Unemployment Insurance Tax on the State of Tennessee's Workforce website.

Other Considerations
Foreign LLCs and Business Licenses
Foreign LLCs

If your company is a foreign LLC, also referred to as an out-of-state LLC, wanting to do business in the state of Tennessee, you’ll need to follow all the steps outlined above with a few minor differences.

You will need to file an Application for Certificate of Authority (Form ss-4233) with the Tennessee Secretary of State as well as a Certificate of Existence (referred to in some states as a Certificate of Good Standing) from your LLC’s domestic or home state. The certificate must date back no more than 60 days prior to filing.

The filing fee is the same: $300 to $3000.

Business Licenses

Some industries will require you to secure federal, state, and/or local licenses to legally operate in the state of Tennessee.

Tennessee doesn’t have a statewide business license, but some cities and counties require one.

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