Tennessee LLC: How to Form an LLC in Tennessee

Tennessee LLC

Are you a new business owner from Tennessee? Congratulations on setting your business up! As an entrepreneur, you are bound to be excited as well as nervous about your new responsibilities. 

Why not ensure that your business is safe, secure, and protected from legal issues and disputes? Well, if you form Tennessee LLC, you can do that! You can ensure that your personal assets and business assets are separate from each other.

Don’t know where to start from? It’s alright – we are here to help! From preparing your paperwork to getting business permits and licenses, we are here to guide you through each step thoroughly!

Ready? Let’s get started!

Quick Summary

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Don’t have enough time to read the entire guide on forming LLC in Tennessee? Go through the quick highlights and you would be good to go!

To create your LLC in Tennessee, you have to follow these simple steps.

  1. Picking a Name for Your LLC
  2. Selecting a Resident Agent
  3. Preparing and Filing the Paperwork
  4. Forming the Business Operating Agreement
  5. Acquiring the Federal Tax ID
  6. Getting the Necessary Business Licenses and Permits
  7. Submitting the Annual Report

These are the basic steps that will get your LLC in Tennessee up and running. You have two options here – form an LLC in Tennessee on your own or choose a professional LLC incorporation company to help you. 

If you form an LLC on your own, you will not have to pay any service charges and you will save some money. You will still have to pay the state filing fees and charges, though. Let’s be honest – we are not all lawyers and all the technical legal jargon does get a bit hard to understand.

You should be focusing on making your business a success instead of navigating all the legal tape and trying to make sense of the paperwork. With professional and expert services out there, why not take their help and ensure that your work gets down efficiently?

There are plenty of LLC formation services out there, each with its own features and varying prices. We recommend that you choose ZenBusiness or IncFile to form your LLC in Tennessee.

  • ZenBusiness is a great option for those business owners who want expert service but at affordable rates. With their multi-tiered LLC formation plans, you can select one that is a perfect fit for your business’s needs and requirements!
  • IncFile is the only LLC formation service that offers a free service to its users. We all know that it's hard to find extra cash when you are setting up a new business, but this doesn’t mean you don’t want professional services. IncFile fulfills this need by offering to form your LLC in Tennessee for free!

What is an LLC?

Want to learn what an LLC and what it offers? Well, a limited liability company is a legal business structure. This business structure beautifully combines the limited liability offered by a corporation with the flexibility and lack of formalities of a sole proprietorship. In short, it gives you the best of both worlds!

You won’t have to form a board of directors or hold annual meetings like a corporation, yet you will be protected in case a legal issue arises. While running a business, many unforeseen incidents occur – it doesn’t mean that you lose everything you have worked so hard for.

An LLC limits the risk to your business assets only and keeps your personal assets safe and protected. Nice to know that your home and personal belongings will be safe no matter what the future brings!

Form an LLC in Tennessee

The basic steps of forming an LLC all over the United States are the same, however, the paperwork, filing fees, permits/licenses, etc. differ from place to place. To form an LLC in Tennessee, you have to do three main things – selecting your LLC’s name, appointing a resident agent, and filing the required paperwork.

The minimum filing fee is $300 and it changes with the number of members you have in your LLC. Let’s delve into detail about forming an LLC in Tennessee.

Choose your LLC’s Name

As the owner of a new business, the first thing that you have to do is give it a name. The name will be your business’s first impression on the customers. It will be the first thing that potential investors will see when looking into your business.

Your name is your identity – it needs to reflect the core values of your business. Apart from being unique and distinct, it needs to be attractive and alluring. 

  • Name Availability Search. Once you have selected the name, you have to search whether a business entity is already using that name in Tennessee or not. You can check the business name database of the Tennessee Secretary of State. 

If you want to use a name that is already being used, you can get their consent to use the name. However, most companies prefer to use an original, unique name for their business, and that is what you should do as well.

Want an insider tip? When you are choosing the name for your LLC, search for its availability as a web domain as well. We live in a digital world and you will definitely set up your business website in the future. This will help you when you create your business’s website!

  • LLC Name Reservation. Decided on a name for your LLC and checked for its availability? The next step is to file your paperwork and claim the name as your own. But what if your paperwork is not ready? 

What if by the time you are ready to file the paperwork, someone else is already using your selected name? To prevent this, you can reserve the name of your LLC. All you need to do is file an application for the reservation of LLC name. 

The filing fee is $20 and the name will be reserved for a period of 4 months. You can reserve the name online or via traditional mail.

  • LLC Rules & Regulations. The name you choose for your LLC needs to follow some rules and regulations. Firstly, the name should have a designator at the end such as “LLC”, “L.L.C”, or some variation of the words limited liability company. 

Ensure that the name you have selected complies with the naming requirements of the state. You can’t use derogatory or abusive words for your LLC. Moreover, terms that will confuse your business with an existing governmental organization can’t be used as well.

  • LLC Fictitious Name. Don’t want to use the name that your LLC’s legally registered as? You have the option to operate under an assumed name as well. To get a DBA – doing business as – you need to register the fictitious name with the Secretary of State of Tennessee. 

You have to file an application for registering the DBA online or via traditional mail.

Selecting a Registered Agent

Once you have selected a name for your LLC, you have to choose the registered agent. You will need to provide the details of your registered agent in the Articles of Organization. A resident agent is a business entity or individual that will act as the point of contact between your LLC and the state. 

  • Requirements for a Registered Agent. The registered agent should have a physical street address in Tennessee. A simple PO Box will not work in this case. Moreover, the registered agent will need to keep regular business hours so that the government can contact your LLC anytime they want. 
  • Options for Registered Agent. You have three choices when it comes to choosing a resident agent for your LLC. You can become your own resident agent, choose a friend or family member, or hire an expert and professional registered agent service such as Northwest Registered Agent.

If you choose to become your own registered agent, you will not have to pay any fees or charges. However, you will have to maintain regular office hours. Moreover, since the address of the registered agent becomes part of the public records, you will have no privacy.

If you choose an acquaintance to act as the resident agent for your LLC, they will also face the same issues. Moreover, it is likely that they will forget to pass on your mail to you and you will end up missing important deadlines. 

Therefore, the safest and most sensible thing to do is to select a professional registered agent service to take care of all your needs. Northwest Registered Agent is a professional company that has been around for more than 20 years and has professional, courteous, and knowledgeable staff that takes care of your LLC’s needs.

Filing the Paperwork

This is the main step in forming your LLC in Tennessee. Once you choose an LLC name and the registered agent, you will have to prepare the Articles of Organization and then file them with the state.

You have to provide the following information in the Articles of Organization.

  • LLC Name & Details. In this section, you have to provide all the details regarding your company. If you are forming something other than a regular LLC, such as a non-profit, series LLC, or a PLLC, you have to mention this here.

Moreover, if you are an insurance company, a trusted company, a bank, a litigation financier, etc., you will have to note this as well. If you are using the name of an existing LLC in Tennessee, and you have taken name consent from them, you will need to select the appropriate box for this too.

  • Registered Agent Details. In the paperwork, you have to provide the details of your registered agent such as their name and address. Moreover, you are also supposed to give the address of your principal office.

However, if you hire a professional registered agent such as Northwest Registered Agent, then you can keep your office address private and use the resident agent’s address.

  • Fiscal Year End Month. You have to mention the month in which your fiscal year ends. Usually, businesses operate according to the calendar year and choose December as the fiscal year-end month.

However, if you want, you can list the month of your LLC formation as the fiscal year-end month.

  • LLC Effective Date. The LLC effective date is the date on which your LLC will be officially formed. If you want your LLC to begin at a specific date, you can mention this here. You can choose from a period of 90 days from the time of paperwork filing.
  • LLC Management. You can indicate whether the LLC is member-managed, manager-managed, or director-managed. If the decision-making power in your LLC lies with members, it is member-managed. If the manager(s) or director(s) make the decisions, then your LLC will be manager-managed or director-managed, respectively.
  • The number of LLC Members. In the Articles of Organization for a Tennessee LLC, you have to mention the number of members as well. This is because the filing fee actually depends on the number of members if the members are more than 6.
  • Duration of LLC. If you want your LLC to stop existing after a particular date, you have to indicate that as well. If you want your LLC to exist indefinitely, you have the option to do so as well.

You can file the articles of the organization online or through traditional mail. The filing fee is $300 for LLC with up to 6 members. For every member over 6, you have to pay $50 additionally. The maximum filing fee is $3,000. 

If you pay the filing fee via credit card, you will have to pay a convenience fee as well.

Creating a Business Operating Agreement

In Tennessee, if you are running an LLC, you are not legally obligated to create a business operating agreement. However, it is highly recommended that you get one for your LLC. A business operating agreement is an internal legal document that outlines the operating procedures and ownership of the LLC. 

A comprehensive business operating agreement ensures that all the members of the LLC are on the same page. This helps to avoid any conflicts in the future. 

Acquiring a Federal Tax ID

Once your LLC is filed, you should apply for an EIN. The Employer Identification number is a nine-digit number that is assigned by the IRS to an LLC for tax filing purposes. In other words, it is the social security number for your LLC.

You need an EIN to open your LLC’s bank account, hire employees, filing federal as well as state taxes. You can get an EIN online or via traditional mail. There is no filing fee for this. We recommend that you get an EIN online because the processing time is very fast.

Business Permits & Licenses

To do business in Tennessee, you will need to comply with the federal, state, as well as local government rules and regulations. You will need permits or licenses that will depend on the type of business you will do as well as the location of your LLC.

The fees, as well as procedure, will vary from locality to locality as well. You don’t need a general business license in Tennessee. 

Tennessee LLC Taxes

You will have to pay different taxes based on the kind of business you will do. If you are selling products in the state, you will have to get a seller’s permit and you will be able to collect sales tax on all the taxable sales. 

If your LLC has employees in the state, you will have to pay the unemployment insurance tax. Make sure that you take the help of professionals to figure out which taxes your LLC needs to pay to avoid any future inconveniences. 

Filing the Annual Report

Whether you are a domestic LLC, or a foreign LLC doing business in Tennessee, you have to file an annual report with the Secretary of State. Moreover, you have to pay a filing fee of $50 per LLC member. 

Four months after the LLC’s fiscal year closes, you have to submit the annual report. For example, if your fiscal year ends in August, you have to submit the report by 1st December.

LLC in Tennessee – Final Word

When you start a business, you have a lot of dreams and aspirations, to fulfill all those dreams, you have to put in plenty of hard work and burn the midnight oil. No matter how prepared you are, you can’t stop unforeseen incidents from taking place.

What if a customer sues your LLC? What if a former employee files a lawsuit against your company? How will you protect your hard-earned assets? You will do so by forming an LLC in Tennessee.

With the steps that we have mentioned above, you can easily set up your LLC in Tennessee. However, it will take a lot of effort and time on your end to file all the necessary paperwork. Instead of wasting your time trying to understand the legal terminology, you should hire a professional LLC formation service.

A professional LLC formation service will not only set up your LLC but will take care of other needs such as opening a business bank account, creating a business website, etc. We recommend that you use ZenBusiness or IncFile – both highly-qualified, professional services.

  • ZenBusiness is a great option for those business owners who want expert service but at affordable rates. With their multi-tiered LLC formation plans, you can select one that is a perfect fit for your business’s needs and requirements!
  • IncFile is the only LLC formation service that offers a free service to its users. We all know that it's hard to find extra cash when you are setting up a new business, but this doesn’t mean you don’t want professional services. IncFile fulfills this need by offering to form your LLC in Tennessee for free!

Here’s to you having a successful LLC in Tennessee!

Tennessee LLC – Frequently Asked Questions

If you file the articles of the organization online, it takes 24 hours to get your LLC up and running. If you file through mail, then it will approximately take 3 to 5 business days. 

A domestic LLC is the one that operates in the state where it was actually formed. A foreign LLC is the LLC that already exists in some other state but now wants to expand to other states as well.

The minimum LLC filing fee is $300. If you have more than 6 members in your LLC, you will have to pay an additional $50 for each member. However, the maximum filing fee is $3,000. Moreover, if you pay via credit card, you will have to pay a convenience fee as well.

For reserving your LLC’s name, the filing fee is $20. You also have to file an annual report and the cost structure is similar to the articles of the organization.

If you file on your own, you will have to pay the state fees. However, you will have to do a lot of paperwork. You can hire a lawyer, but we all know those hourly lawyer fees are sky-high. The best option is to use LLC formation companies such as IncFile or ZenBusiness that have minimal rates.

Yes, foreign LLCs can operate in Tennessee. They have to appoint a registered agent in the state of Tennessee and file an application to be registered in the state. The filing fee and the process is the same as that of a domestic LLC. 

Cite/Link to This Article

  • Stewart, Suzy. "Tennessee LLC: How to Form an LLC in Tennessee". One Brick Court. Accessed on March 9, 2021. https://onebrickcourt.com/tennessee-llc/.

  • Stewart, Suzy. "Tennessee LLC: How to Form an LLC in Tennessee". One Brick Court, https://onebrickcourt.com/tennessee-llc/. Accessed 9 March, 2021.

  • Stewart, Suzy. Tennessee LLC: How to Form an LLC in Tennessee. One Brick Court. Retrieved from https://onebrickcourt.com/tennessee-llc/.