Quality whiskey. Elvis and Dolly Parton. Nashville and the blues. Tennessee is known for many things including the beautiful Rock Island State Park.
When it comes to taxes and legal protection, small companies may gain a lot by forming an LLC. If you think an LLC is really the best option for your company, here’s how to set one up in the state of Tennessee.
Prospective business owners can set up the LLC on their own, or hire a company formation agency to handle the process for you.
1. Give Your Tennessee LLC a Name
When choosing a name for a limited liability company in the Volunteer State, there are two primary guidelines to follow:
- The Tennessee Secretary of State requires that a limited liability company’s name be unique among other registered businesses.
- The term “Limited Liability Company,” “LLC,” or “L.L.C.” must appear anywhere in the name of a limited liability company.
Verify the availability of possible LLC names.
Using the Tennessee Secretary of State’s Search Name Availability Tool, you may discover whether your desired LLC name is already taken.
Register your proposed LLC entity with the Secretary of State
By reserving the name with the Tennessee Secretary of State, you may ensure that no other Tennessee firm will be able to use the name until your LLC’s Articles of Organization are filed.
2. Choosing a Registered Agent in Tennessee
Every limited liability company in the Volunteer State must choose a local agent to receive legal notices and documents on its behalf. The company or person who has agreed to accept service of process on behalf of the LLC in the event that it is sued.
The Registered Agent might be either a natural person who resides in Tennessee or a corporation that is registered to do business in the state. The Registered Agent’s address must be a brick-and-mortar location in the Volunteer State.
What does it mean to have a Registered Agent?
A company’s Registered Agent is the individual or organization designated by the company to receive service of process and other legal papers on the company’s behalf, including tax returns, summonses, and other legal notices. The role of a registered agent is similar to that of a liaison between your company and the government.
Who can fulfill the role of Registered Agent?
A Registered Agent in the state of Tennessee must be either an individual who resides in the state full-time or a company (such a Registered Agent service) that is registered to do business in Tennessee. You, or anybody else in the business, may make the choice.
3. Form your Company by filing Articles
Your limited liability company (LLC) will be formally established with the help of a document called Articles of Organization. Accuracy is essential, since this document serves as the basis for your company’s legal registration with the state.
The Articles of Organization inclusions
Articles of Organization for a Limited Liability Company in the State of Tennessee need the following information from you:
- A Company With Limited Liability
- Lifespan of an LLC: Discretionary or Mandatory?
- Full legal address and name of the registered agent for the company
- In case the State Secretary has to send mail to the LLC, this is the address to use.
- How the LLC would be run, between member and management control.
- Will the LLC provide expert services?
- Identification and contact information for the LLC’s organizers, as well as a member or manager who is familiar with day-to-day activities.
- LLCs that do business in a different state from the one in which they were formed are considered “foreign” and must pay an additional charge.
There are a few different ways to register an LLC in the State of Tennessee. Articles of Organization may be filed electronically or prepared electronically using Form SS-4270, then printed and sent by regular mail to the Sec of State’s office.
There is also the option to download a blank form, complete it manually, and submit it by regular mail. There is a minimum cost of $300 and an upper fee limit of $3,000 that must be paid by a preexisting Tennessee LLC. Online filings also incur a processing cost.
By submitting an Application for Certificate of Authorization (Form SS-4233) with the Tennessee Secretary of State, a foreign LLC may be granted authority to do business in the state. Tennessee existing LLCs follow the same fee and formation steps as new Tennessee LLCs.
4. Receive A State Certificate
After the LLC formation forms have been submitted and authorized, the state will issue a certificate attesting to the LLC’s legal existence to anybody who requests a copy and pays the required postage.
With this document in hand, the LLC may apply for tax IDs and permits, as well as open a company checking account.
5. Establish a business contract
Although creating an operating agreement is not required by law in Tennessee, it is highly suggested for all new limited liability businesses.
The following should be accomplished through the operational agreement:
- Provide details on how the LLC is organized
- Clarify the roles and duties of each member of the limited liability company (LLC)
- Establish the LLC’s management structure
Substantial legal and operational challenges may arise for an LLC if its members do not have a well-defined role in the business.
6. Register for a Tax ID as an Employer (EIN)
A National Employment Identification Number (EIN), often known as a tax ID number, is required by many LLCs. You will need an EIN to register a business with the IRS, open a bank account, and in many cases, recruit workers.
The IRS’s website has all the information you need to determine whether you require an EIN and how to apply for one, and it’s free of charge. Although most companies will need an EIN, single-member limited liability companies (LLCs) may use the owner’s SSN instead.
Permission to Operate a Business
Depending on the nature and location of the LLC’s operations in Tennessee, the state or local government may require the company to seek a business license or permit.
The Secretary of State of Tennessee has compiled a comprehensive guide on starting a company in the Volunteer State. In order to get information on a certain kind of license in Tennessee, you may use the Tennessee License Directory.
Get in touch with the municipal or county clerk where your limited liability company’s registered office is situated to learn more about the licensing requirements in your area.
7. Disclose Annual Renewals
Each year, all LLCs that are doing business in Tennessee must submit an annual report to the Secretary of State. This also applies to international LLCs operating inside the state.
The first day of the fourth month after the conclusion of an LLC’s fiscal year (April 1 if the fiscal year is the same as the calendar year) is the date by which the annual report must be submitted.
It is possible to submit the annual report either electronically or by regular mail. LLC members must pay $50 each year to file yearly reports, with a $300 minimum and a $3,000 maximum.
Expenses and Next Steps?
There is a $300 minimum price to file an LLC with the Tennessee Secretary of State, plus $50 for each member of the LLC. The filing fee cannot exceed $3,000 for the Articles of Organization.
When using a credit card to pay online, you’ll be subject to a convenience fee. If you’d like to register your LLC name before submitting the Articles of Organization, you may do so for a fee of $20 by completing a name reservation application through mail or online.
A yearly report must be submitted by every Tennessee LLC to the Secretary of State. Depending on the number of members in the LLC, the filing price might range from $300 to $3,000.
Besides these mandatory LLC expenses, there are a few more worth thinking about:
- Branding an LLC name via reserving it
- Documentation proving the use of a Doing Business As name
After registering your limited liability company, you will have the backing of the law to start your operations. It is the responsibility of businesses to ensure that their LLC remains in good standing and in compliance with state regulations.
After you have formed a limited liability company, you might also need to:
- Get any health department permissions, zoning permits, home occupancy authorizations, professional licenses, and any other licenses you need to legally run your company. In order to legally sell in certain states, a seller’s permission is required.
- Get your company registered with the state’s tax department.
- Open a business checking account
- Set up a company credit card account now.
- The company owner should invest in insurance.
- A trademark may help you protect your business’s name and logo.
LLC setup by myself or via the professionals?
To set up an LLC, you won’t need to pay for legal representation. Forming a limited liability company (LLC) is legal in most states and may be done by declaring the business entity with the state and the IRS (IRS).
Utilizing a reputable LLC service such as ZenBusiness can be helpful if you don’t know your way around the LLC creation procedure.
When starting a business, entrepreneurs may save both time and money by using a firm that specializes in forming limited liability companies. You may have them take care of the things you haven’t had time to think about, and pay anywhere from $35 to $590 to get it done.
Services which professional formation service providers can help with include:
- Writing an Operating Agreement for your limited liability corporation that details the who, what, where, when, why, and how of your business (a prerequisite in certain U.S. states).
- Detailing he LLC’s management, registration agent, and creation date.
- Taking up the role of registered agent for your business.
- Paying the necessary payments and signing up with the right authorities.
- Checking the availability of the LLC name and registering the company name.
- Having the necessary formation and legal paperwork completed and filed.
What is the cost to form a limited liability company in Tennessee?
There is a minimum price of $300 and a maximum fee of $3k to attain your Articles of Organization for a Tennessee LLC, plus $20 for a name allocation application filed by mail or electronically.
Can I have my Tennessee limited liability company set up online?
The Articles of Organization for a Limited Liability Company (LLC) in the Volunteer State may be filed electronically using Form SS-4270.
What do I need to set up an LLC in Tennessee?
The registration cost, the LLC’s name, a Registered Agent, the Articles of Organization, the Operating Agreement, and the EIN from the IRS are all required to incorporate an LLC in Tennessee.
Tom is the founder of Gottagrow.io. He reads the offers, deciphers the details including features, pricing, included services and more to find you the best products and services.