How to Start an LLC in Tennessee

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How to Form an LLC in Tennessee | Complete Guide
A Step-by-Step Guide

How to Form an LLC in Tennessee

Forming a Limited Liability Company (LLC) in Tennessee is easy, providing your personal assets with protection while opening your business. This complete guide will assist you through the process and help you set up your LLC in Tennessee.

What is an LLC?

1

Limited Liability Protection

An LLC (Limited Liability Company) is a type of business entity that gives personal liability protection to its owners (known as members). That is, your home or vehicle assets are usually shielded from any debt of the business or business law suits.

2

Tax Advantages

LLCs also get pass-through taxation, meaning profits get taxed only once on the personal tax return of the members.

3

Management Flexibility

Tennessee LLCs provide flexibility in management structure, allowing you to choose between member-managed or manager-managed operations to suit your business needs.

Formation Process

Pick a Distinct Name for Your LLC

The initial step in forming your Tennessee LLC is choosing a name. Your business name should be distinctive and not already in use by another company in the state. You can verify the availability of your preferred name through the Tennessee Secretary of State's online business name search tool.

  • Required Words: The name shall contain the terms "Limited Liability Company" or an abbreviated form such as "LLC," "L.L.C.," "Limited," "Ltd.," "Co.," or "Company."
  • Prohibited Words: The name shall not contain words such as "Agency," "Board," "Bureau," "Commission," or "Department," which are usually reserved for governmental organizations.
  • Name Restrictions: The name shall not be deceptive or suggest a connection with a government agency, such as containing words such as "FBI" or "State Department."
  • Domain Name: Secondly, it's also advisable to look into the availability of a matching domain name for your site to prevent losing the opportunity to claim your web presence.

Nominate a Registered Agent in Tennessee

All Tennessee LLCs must have a registered agent. The registered agent is the point person for official papers, legal notices, and government communications. This agent sees that your LLC gets important documents on time.

Agent Options

You have the option to be your own registered agent, appoint a fellow member of the LLC, or utilize the service of a professional registered agent business. If you hire someone to do it for you, make sure they maintain a Tennessee street address and are willing to receive documents within business hours.

Professional Services

Below are two highly recommended registered agent services for your Tennessee LLC:

Best Tennessee Registered Agent Services

ZenBusiness

ZenBusiness is a reputable service that offers both LLC formation and registered agent services for $199 annually. With an easy-to-use online dashboard, ZenBusiness provides simple document management and state compliance.

  • Simple-to-use platform for LLC management
  • Comes with worry-free compliance services
  • 5-star reviews and great customer feedback

Best for: LLC Formation & Registered Agent Services

Price: $199 per year

Northwest Registered Agent

Northwest Registered Agent has years of experience handling registered agent services. They value data security and grant access to an online portal for document management. Their registered agent service is $125 annually.

  • A+ rating from the Better Business Bureau
  • High customer service and data security level
  • Provides services in all 50 states

Best for: Experienced and Secure Registered Agent Services

Price: $125 per year

File Your Articles of Organization

After you have your registered agent and LLC name set, you will need to file your Articles of Organization with the Tennessee Secretary of State. You may file your filing online or by mail.

Filing Fee

The filing fee is $300. This cost is the same if you file online or by mail.

Processing Times

If you file online, processing takes immediate effect. Paper filings will take 3-5 business days to process.

Filing Options

  • Online: Filing online is the quickest and most convenient option.
  • Mail/In-Person: You can send your documents by mail or deliver them in person to the Tennessee Secretary of State.

By Mail/In-Person Address:

Secretary of State
6th Floor, Snodgrass Tower
ATTN: Corporate Filing
312 Rosa L. Parks Ave
Nashville, TN 37243

What to Do After Registering Your LLC

Once your LLC is officially registered, there are a few steps to follow to ensure smooth operations:

Keep Personal and Business Finances Separate

Establish a business bank account to maintain separate personal and business funds. This will shield your personal assets if your LLC becomes involved in a legal dispute.

Hire an Accountant

A business accountant can help with tax returns, prevent overpayment, and organize financial records for your business.

Obtain an EIN

You will require an Employer Identification Number (EIN) if your LLC will have employees or if you intend to have a business bank account. The IRS issues EINs at no cost.

Obtain Business Insurance

Even small businesses may want to obtain business insurance to guard against possible liabilities, lawsuits, and other dangers. If you have workers, Tennessee mandates workers' compensation insurance to pay for any work-related accidents or diseases.

FAQs

How much does it cost to form an LLC in Tennessee?

The cost of filing an LLC in Tennessee is $300. This cost is the same if you file online or by mail.

Do I need a DBA for my Tennessee LLC?

In Tennessee, the majority of LLCs do not require a "Doing Business As" (DBA) name. The name you file for your LLC is usually the name you will conduct business under. If you intend to conduct business under another name, you will have to file a DBA.

How long does it take to process my Articles of Organization?

If you file online, processing takes immediate effect. Paper filings will take 3-5 business days to process.

Can I start an LLC in Tennessee if I don't reside there?

Yes, you may start an LLC in Tennessee even if you do not reside in the state. You will need to have a registered agent located in Tennessee receive official documents on behalf of your LLC.

Is an operating agreement necessary for my Tennessee LLC?

Though an operating agreement isn't mandatory under state law, it's advisable. This document defines the organization, roles, and procedures of operating your LLC, avoiding disputes between members.

Is my LLC name changable after registration?

Yes, you can rename your LLC by submitting an amendment to the Tennessee Secretary of State. There is a fee associated with this process, and you will need to adhere to the state's naming rules.

What are Tennessee LLCs' annual requirements?

Tennessee does not have an annual report requirement for LLCs, which makes it simpler to keep your LLC in good standing. Nevertheless, you should be sure that your registered agent information is current and that you are in compliance with any tax requirements.

Ready to Start Your Tennessee LLC?

Creating an LLC in Tennessee is an excellent option for those who want to have personal liability protection and the ability to conduct business in any number of ways. By following these guidelines and being mindful of state laws, you can create your LLC easily and effectively.

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