This is the first and most important step in starting your LLC. Do some research to make sure the name you choose is suited to your business venture and is easily searchable by potential clients.
- Follow the Tennessee naming guidelines: Your entity name must contain the words Limited Liability Company or the abbreviation L.L.C. or LLC. Restricted words (e.g. Bank, Attorney, University) require additional paperwork and may require a licensed individual, such as a doctor or lawyer, to be part of the LLC. Prohibited words are those that would confuse the name of your LLC with a federal or state agency (e.g. FBI, Secret Service, Treasury etc.)
- Is the name available in Tennessee? Make sure the name isn't already taken by doing a name search on the State of Tennessee website.
- Is the URL available? Check to see if the name of your LLC is available so that you can reserve your domain name. Even if you don't plan to make a website today, you may want to buy the domain name in order to prevent others from acquiring it.
An email address is also something to consider when choosing a name. Get a professional email system (@yourcompany.com) with Google's G Suite, which also comes with business tools for word processing and spreadsheets, all with business-grade security - Try it for free
You are required to nominate a Registered Agent for your Tennessee LLC.
What is a Registered Agent? A registered agent is a person or business that agrees to send and receive legal papers on behalf of your LLC. Such papers include service of process of legal action (if you are sued) and state filings.
Who can be a Registered Agent? The registered agent must be a resident of Tennessee or a corporation authorized to transact business in Tennessee. You may elect an individual within the company including yourself.
Click here to learn more about the role of a registered agent, and why you may wish to consider hiring a professional registered agent service.
* Recommended: INCFILE.COM provides free registered agent service for the first year as part of their LLC Packages.
To register your LLC, you will need to file the Articles of Organization with the State of Tennessee. This can be done online, by mail, or in-person.
When filing the Articles of Organization you will need to decide if your LLC will be member managed or manager managed. Read our article on the topic to learn more.
File the Articles of Organization for a Domestic LLC
- or -
Fee: Nonrefundable $50/member fee, with a minimum fee of $300 and a maximum fee of $3,000.
Make check, cashier's check or money order payable to the Tennessee Secretary of State.
Follow the instructions on the form you choose.
Important: If you're expanding your existing LLC to the State of Tennessee you are forming a Foreign LLC. Learn how.
An operating agreement is not required in Tennessee, but it's a good practice to have one.
What is an Operating Agreement? An operating agreement is a legal document outlining the ownership and operating procedures of your LLC. Learn more about operating agreements here.
* Recommended: Check out our free sample operating agreement
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required when filing state and federal taxes. In addition, banks may require an EIN to open a business checking account.
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done by one of two ways:
Click here to learn more about EINs and further details on how to register for one with the IRS.
Considering Using an LLC Formation Service?
We reviewed and ranked the top 5 LLC formation services.
Find out which is best for you.
Opening a business bank account is an important first step, as it:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Getting a business credit card allows you to:
- Separate personal and business expenses.
- Build your company's credit history, which can be useful to raise money for your company later.
* Recommended: Compare business credit card offers at CreditCards.com.
Do I need to register for State taxes?
- If you have Employees in Tennessee, you will have to register for Unemployment Insurance Tax on behalf of your Employees.
- Register for Tennessee Unemployment Insurance Tax through the Department of Labor & Workforce Development.
- If you are selling taxable goods or services in Tennessee, you will need to register for Tennessee Sales Tax.
- Register for Tennessee Sales and Use Tax through the Department of Revenue.
*Recommended: Learn more about LLC taxes by reading TRUiC's LLC Tax Guide.
Even if you haven’t officially opened for business – it’s critical to get your books in order. A well managed accounting system will help you:
- Track your business finances, including bills, expenses and income.
- Simplify your annual tax filings.
The right software makes accounting easy. Look for software that:
- Syncs with your bank automatically.
- Matches transactions to invoices, bills and purchase orders.
- Can be accessed from your phone.
*Recommended: QuickBooks has all the accounting features your small business will need.
Try QuickBooks FREE.
Do I need business licenses and permits?
To operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:
- Federal: Use the U.S. Small Business Administration (SBA) guide to federal business licenses and permits.
- State: To learn more about licenses, permits and registration, visit the State of Tennessee's government website Licenses and Permits section.
- Local: Contact your local Chamber of Commerce and ask about local licenses and permits.
What is Workers Compensation Insurance? This form of insurance is required for most businesses with employees, but varies by state. Click here to learn more.
What is General Liability Insurance? This is an important service, but is not required in most states. Click here to learn why.
How much will the right insurance cost you? Click here to find out.
When you decide to hire employees, you must follow these legal requirements:
- Verify that new employees are able to work in the US
- Report employees as "new hires" to the State
- Provide workers compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your work space
- Pay employees at least minimum wage and as often as your state requires (weekly, bi-weekly, etc.)
Discover more employer information at Tennessee Department of Labor and Workforce Development.
Recommended: A payroll service saves you time and makes it easier to follow these requirements.
How to Start a Business in Tennessee
5 easy steps to starting a business in Tennessee.
We have a far more detailed guide - How to Start a Business which will go over the points in more details.
Identify a suitable business idea that works for you - Check out our Business Ideas Tool.
Critically analyze your idea with our Lean Business Model Canvas Tool. You can then go on to create a full business plan with our Free Online Business Plan Tool.
Formally organize your Business into a company. An LLC is the most popular way to structure your business. Learn how to Form your LLC in Tennessee.
Complete important key steps after formation such as acquiring business licenses & permits, registering for state taxes, and opening a business bank account.
Build your website and develop your brand.
To maintain a Tennessee LLC, it is necessary to make periodic filings with the State of Tennessee. Learn how to keep your LLC in good standing and avoid state penalties.
Tennessee requires LLCs to file an annual report with the Tennessee Secretary of State.
File a Report with the State of Tennessee
File OnlineDue Date: Due by the first day of the fourth month following the close of the LLC's fiscal year.
Fee: Filing fee is $50 per member with a minimum fee of $300 and maximum fee of $3,000.
Late Filings: Tennessee does not charge late fees if you miss your filing deadline but may dissolve or revoke your LLC after 60 days of failing to file an annual report.
Tennessee LLCs are required to pay an annual Franchise Tax.
File the Annual Franchise Tax with the State of Tennessee
- or -
Tax Calculation: The Tennessee franchise tax is 0.25% of the greater of either your LLCs net worth or real and tangible property in Tennessee. The minimum rate for this tax is $100.The excise tax is 6.5% of your LLCs Tennessee taxable income.
Due Date: Due on the 15th day of the fourth month after the beginning of an LLC’s tax year.
Late Filing: Six month extension available upon request.
The IRS treats all multi-member LLCs as partnerships, unless they choose to be taxed as a C-Corp or S-Corp. Therefore, most multi-member LLCs are required to report their income to the IRS using a Form 1065 Partnership Return.
Each year, thousands of LLCs are fined or unknowingly dissolved for missing an important state filing, such as an annual report. When this happens, LLC owners risk loss of limited liability protection. A registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and submitting reports on your behalf
* Recommended: INCFILE.COM offers a reliable registered agent service.
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A Certificate of Good Standing verifies that your LLC was legally formed and has been properly maintained. In Tennessee, a Certificate of Good standing is known as a Certificate of Existence. Several instances where you might need to get one include:
- Seeking funding from banks or other lenders
- Forming your business as a foreign LLC in another state
- Obtaining or renewing specific business licenses or permits
To order a Certificate of Existence in Tennessee, simply order online through the Tennessee Secretary of State website.
Certificate Request Fee:$20.00
If you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
If you have an existing LLC and want to register to do business in Tennessee, you will need to form a foreign LLC.
File a Foreign LLC in the State of Tennessee
Fee: $50.00 per member (minimum fee = $300, maximum fee = $3,000) — Follow the instructions on the PDF.
Benefits of Forming a Foreign LLC
The major benefit of becoming a foreign corporation is that it allows your company to operate as one entity in many jurisdictions. For example, if you originally incorporate your LLC in the State of Delaware, you can file your existing domestic LLC as a foreign corporation in other states.