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Let's start by checking the availability of your company name in Tennessee. Don't worry about adding LLC at this stage, we'll take care of that later.
If you have been thinking about launching a business in Tennessee, you might feel overwhelmed by the amount of information and paperwork necessary to do it right. You want to start your business on the right foot, and that means registering it with the state. Of the many business entity types you can choose from, one of the most popular is the limited liability company, often shortened to LLC. LLCs are easier to form and maintain than corporations and can offer their members personal liability protections.
If you think a Tennessee LLC is right for you, we’re here to help. Our LLC formation service can put your mind at ease by not just registering your business, but providing you with the tools and support you need to keep it running smoothly. Let’s take a closer look at how to start an LLC in Tennessee, the Volunteer State.
The primary step to officially form an LLC will be to file Tennessee Articles of Organization with the Secretary of State’s office. This filing creates a public record and causes the state government to legally recognize your business entity.
However, before submitting your Articles of Organization, make sure to give thorough consideration to some key features that the document will require. Details such as your business name, who will serve as your resident agent, and what to put in an operating agreement to avoid conflict and legal issues. There also might be additional steps to take depending on your industry. So let’s dig in and understand how to set up an LLC in Tennessee.
One of the most important aspects of forming your LLC in Tennessee is choosing the right name. You want to steer away from names that are too generic or vague, but also not too similar to other businesses in the state.
Start your naming process by conducting a business name search. As with most states, Tennessee requires that the names of new businesses be distinguishable from existing companies in the state and not be named in such a way as to be confused with state or federal agencies. Not sure where to start? Take a look at our guide to conducting a Tennessee business name search.
Be aware that certain words in your business name could be restricted by state law or come with additional approvals required. For instance, any LLC that plans to utilize words like “bank” or “insurance” in its title will need to acquire written permissions from the Tennessee Department of Financial Institutions and/or the Department of Commerce and Insurance, respectively, before such a name can be registered with the Department of Business Services.
All LLC names must include the appropriate “designator,” which are words or abbreviations indicating the business entity type. You have the choice of “limited liability company” or one of two abbreviations, “LLC” or “L.L.C.” Your Articles of Organization will further highlight applicable word restrictions and prompt you for the appropriate permissions if your company name contains a restricted designator.
If you are not planning to file your Articles of Organization right away, you may want to consider reserving your chosen business name ahead of time. Tennessee allows potential business owners to reserve an available name for up to four months. If you need some help with your business name, we can check and reserve it for you with our business name reservation service.
Some companies may wish to use an assumed name for their Tennessee LLC, also known as a “doing business as” (DBA) name. An assumed name allows your company to separate services under various titles or to advertise your business without the mandated “LLC” designator. This is something else we can take care of for you, so check out our page on Tennessee DBAs for more information.
Another item you might want to consider is your potential business domain name. As most businesses thrive with a successful website, it would be frustrating to come up with the perfect name and then realize all of the web domains that would best apply to it are already gone. Let us help you register your domain name early to maximize your company’s visibility and potential.
The successful formation of your Tennessee LLC will require you to name a resident agent, commonly known as a registered agent in other states. A registered agent receives legal service (such as notification of a lawsuit) and official government correspondence pertaining to your company.
The resident agent must be a resident of Tennessee or a business authorized to do business in Tennessee. The agent must have a physical street address in the state; you cannot use a P.O. box or something similar. The agent must also be available during normal business hours.
Some business owners believe it’s easier to be their own resident agent, but there are drawbacks. You must be available during business hours at that address, which is often not convenient or feasible. This is especially true when a business is first formed. Thankfully, we have your back. We can put you in contact with our commercial resident agent partners in Tennessee, allowing you the peace of mind of knowing you are legally compliant but can keep certain matters discreet.
Articles of Organization officially register your Tennessee LLC in the eyes of the state. To successfully file your Articles of Organization, you will need key information about your business ready and available. Make sure your chosen name has been researched and cleared and double-check that you have all contact information for your members and resident agent handy. The Tennessee Secretary of State accepts filings online, by mail, and by hand-delivery, along with the relevant fee.
If you are frustrated with trying to navigate the system by yourself or just don’t have the time, that’s okay! Filing official government documents can be intimidating and/or complicated for many people, which is why we’re here. With our business formation plans, we can handle the filing for you to make sure it’s done quickly and correctly the first time.
If you have us handle filing your Articles of Organization, once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard, where you can keep it and other important paperwork digitally organized.
You’ll want to keep your LLC’s documents in a safe location, such as your operating agreement, member certificates, contracts, compliance checklists, transfer ledger, etc. We offer a customized business kit to help you keep these important documents organized and looking professional.
In understanding how to form an LLC in Tennessee by now, you’re realizing how often you’ll need to supply an address for your new business. That can be unsettling for some business owners, especially those running their business from home. In instances where you’re not required to give the registered agent address or official principal address for your business, we have a possible solution. With our virtual business address service, we can supply you with a physical street address where you can have your mail sent without revealing your address to more people than necessary.
To keep your Tennessee LLC running smoothly, it’s a good idea to draft and adopt a comprehensive operating agreement. An operating agreement is essentially a set of rules that lays out and governs the LLC’s management structure, best practices, processes for resolving conflict, naming the members’ rights and responsibilities, and more.
While Tennessee doesn’t require you to file or even create an operating agreement, it’s necessary. Having the right Tennessee operating agreement helps protect and inform your LLC members (owners) throughout the life of the company. Luckily, we can help here as well. We can provide you with an operating agreement template that allows you to customize this document to your business’s needs.
To ensure that your Tennessee LLC is set up to accommodate all applicable local, state, and federal taxes, you will likely need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The only LLCs that sometimes do not require one are those that are single-member entities with no employees, and even then it’s a good idea to have one.
This tax ID number operates for your business in much the same way that your Social Security number operates for your individual taxes. It allows the IRS to identify your business category and determine what kind of taxes you will owe. It also allows you to get things like a business bank account.
You can get your Tennessee LLC’s EIN through the IRS website, by mail, or by fax, but if you’re unfond of dealing with that particular government agency, we can get it for you. Our EIN service is quick and eliminates the hassle.
Once you’ve secured your EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is crucial for sorting out your finances at tax time. It also helps ensure that you aren’t commingling funds, which could also be used against you if someone takes you to court to challenge whether you and your LLC are truly separate entities.
We offer a discounted bank account for new businesses. It allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process. And for further help managing your new business’s finances, try the ZenBusiness Money App. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
Forming a Tennessee LLC comes with an expected list of upfront costs. The exact amount that you will owe will depend on several factors about your business, such as whether you will use a DBA, your company’s size, and what kind of professional licenses you may require. You can expect typical state fees to range from $300 to around $340.
Check out the complete fee schedule on the Secretary of State’s website.
Tennessee’s business landscape is overwhelmingly composed of small businesses. This means that the state is particularly hospitable toward understanding the needs of new small business owners. To that end, Tennessee has installed several key pieces of infrastructure to help new LLCs get off the ground. A few of the major benefits of forming a Tennessee LLC include:
Responsibly forming an LLC in Tennessee means knowing what to expect in the tax department. On the federal level, LLCs can elect to be taxed as a sole proprietorship, a partnership, or a corporation. Most elect one of the pass-through taxation options of the former two, meaning that profits will only be federally taxed on the member’s individual tax returns. This is unlike most corporations, in which profits are taxed twice, first at the business level and again at the individual shareholder level.
LLCs can also choose to be taxed as a corporation instead. This is sometimes advantageous to larger LLCs with high profits. A tax professional can tell you whether this tax setup is right for your business.
Tennessee imposes a basic state business tax on all entities conducting business or incorporated in the state. Even out-of-state businesses will be subject to this tax if it is determined that they have a “substantial nexus” within the state lines of Tennessee.
Most applications will require 6 to 10 business days to be recognized by the Secretary of State. Expedited service is available for a three-day turnaround. Online filings are typically recognized as having officially formed on the same day that the application is correctly completed and submitted.
If you’re in a hurry to form your LLC and don’t want to jump through the hoops of the state’s expedited filing processes, we can handle it for you with our faster filing speeds service.
The Tennessee government does not require a copy of an operating agreement for a new business entity to form.
A Tennessee LLC can be formed under several possible tax structures. Most of the time, the differences in the tax treatment of various structures can lead many new business owners to opt for setting up under the default status. This permits profits to pass through the LLC directly to the members. Under a structure like this, business owners would only pay taxes on the business profits on their own personal tax returns. You also have the option of having your LLC taxed as a corporation. In this structure, both the business and the owners are taxed on the company’s profits. Although most LLC owners prefer to avoid this double taxation, it can be advantageous for some. A qualified tax professional can help you decide what structure is best for your company.
A Series LLC is an LLC that is split into multiple compartments, each with its own protections against liabilities from the others. Many states do not allow the formation of a Series LLC, but Tennessee does. The rules and guidelines associated with forming a Series LLC in Tennessee stipulate different taxation and registration requirements that should be carefully considered.
Most Tennessee LLCs will require a business license to conduct sales or transfers within the state. These general business licenses are issued by the local county clerk. Depending on the city in which you locate your offices, you may also be required to obtain a city/municipality license unique to your town.
Requirements for professional licensure will vary by trade. Determining what licenses and permits are required for your business will take some research on your part. Licensing can be specific to your industry and can be federal, state, and local.
If you don’t have the time or inclination to do all this research, or if you just want the peace of mind to know that your business has all the licenses and permits it’s legally required to have, our business license report service can do the work for you.
The Tennessee Department of Labor and Workforce Development mandates that nearly all employers with five or more employees carry workers’ compensation insurance. Every employer in the state is required to register for Unemployment Insurance Tax. If you have any business-owned vehicles, you’ll be required to have commercial auto insurance.