Forming an LLC (Limited Liability Company) in Tennessee is easy and affordable. The following are few procedural steps on how to start an LLC in Tennessee. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Tennessee, visit How to Start an LLC.
On this page, you’ll learn about the following:
- How to Start a Tennessee LLC
- After Starting your Tennessee LLC
- Why an LLC in Tennessee
- Leading Businesses Operating In Tennessee
- Tennessee LLC Formation Review
How to Start a Tennessee LLC
Suppose you’re planning to invest in some profitable business or maybe about to set up your business in Tennessee. In that case, forming an LLC in Tennessee is the simplest form of business for you. LLCs are better for owners as it reduces the personal liability for company and business debt.
An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Tennessee.
Step 1: Decide a Name for Your LLC
If you are to start an LLC in Tennessee, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Tennessee business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your Tennessee LLC.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC?
A name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Tennessee Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.
- Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
- You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
- As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain
Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.
If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.
Step 2: Assign a Registered Agent in Tennessee
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in Tennessee. Choosing a Tennessee-registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of Tennessee o have a physical street address. It could also be a business with an office address. Here are the recommended agent service provider list and employees for you:
Our Rating & Pricing
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$49 + State Fees
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$399 + State Fees
These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in Tennessee. Compare them to check the best yet cheapest option for you. Besides, these professional service providers can guarantee you the best services to their potential customers because they have been in the business for years.
Step 3: File Articles of Organization in Tennessee
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Tennessee Secretary of State, with a starting fee of $300. You may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Tennessee, like if it is a member-managed or managers-managed. LLCs with employees need to check the Tennessee government portal for guidelines to hire employees.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Tennessee LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.
How to File by Mail
If you prefer filing real-life forms for your Tennessee LLC registration, then you can download the Tennessee Limited Company Certificate of Formation. Read the form thoroughly, fill it out, and send your application by mail. It will have to fill, among others, your name, city, state, zip code, and signature.
Step 4: Create Your Tennessee LLC Operating Agreement
A limited liability company operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
Starting a Tennessee LLC does not require you to have a limited liability operating agreement, but it is ideal to have one that contains all your details of business operation.
Step 5: Filing a Tennessee LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business.
It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
After Starting your Tennessee LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business account
- File Tennessee business permits & licenses
- Get liability for business insurance with coverage for employees
- File a Tennessee LLC annual report or biennial report
- Already existing LLCs that wish to operate in Tennessee must register as a foreign Tennessee LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember the upcoming filing deadline and filing fee, annual costs, or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Why an LLC in Tennessee
The number of filings that the state of Tennessee is making every year is increasing year by year, and the reason is various attractive incentive programs. These programs offer various business funding options and a reduction in tax liabilities. The government has started many incentive programs that the LLC startups are attracted to the state and establish their entity. Some of them are mentioned below.
Tennessee Economic Development Incentive Program
Any entrepreneur tries to implement different business changes and look for a different kind of assistance to make their business sustainable and set its pace in the growth phase. That is why to fulfill the demand of Tennessee LLC for sustainable growth. The government has launched different programs for the development of the LLC. They are:-
- There is a fast-track infrastructure program under which assistance is provided by the government’s side to form an infrastructure for their business. Some financial assistance and tax advantages are included in this program.
- Amid the creation of jobs, the Tennessee government provides a tax credit to the LLC to keep creating such opportunities in the future.
- Fasttrack Job Training Assistance Program is a specially launched scheme by the government in which the government provides job training for jobs to the youth. This training will help them learn the skills that are required for working in the professional sector.
- A sales tax exemption program under which the companies qualified will be provided a rebate on the sales tax or be exempted from paying any amount.
Valley Incentive Program
If you want to start an LLC in Tennessee, you can also enroll your business in a valley incentive program. In this program, different types of bonuses will be provided to companies based on their field and their idea of starting a business. The investment credit program is one of them. This is a performance-based incentive based on the company’s development or those who are planning for further development. In this, a business can get a profit of 10-20% on their annual power consumption for 5-10 years straight.
The loan fund scheme also targets the new startups in the state. The main objective of this program is to leverage the capital of the company through investment so that the business can focus on job creation and expansion. An LLC in Tennessee can get a loan of up to $3 million under this scheme, repayment of which can be done in flexible terms of 5 to 20 years.
Leading Businesses Operating In Tennessee
The knowledge of the top businesses of Tennessee is important to know if you want to form an LLC in Tennessee. The reason behind this is that this knowledge will help you understand the business environment of the state better.
The biggest contributor to the state’s GDP is advanced manufacturing, with a total of around $49.22 billion. There is a huge production house of state-of-the-art cooking in the state that is producing firearms. Along with that, the automotive industry is also huge. The main reason why manufacturing is preferred in Tennessee is the low business cost and skilled labor.
The top brand names in the state are General Motors assembly and Volkswagen manufacturing unit the state.
There is a list of services that are contributing a huge amount to the GDP of the state. The main two out of them are the educational services and health care. There are more than 70 institutions present in the state in which easy students can get admission easily. Along with that, a health care industry in the state is producing high-quality services for people living in the state.
It is estimated that around 335,000 people are currently working in the state’s service sector that is contributing around $36.44 billion in revenue.
The state is known for a well-established place for different music production houses and television setups. The major media companies present in the state are Ingram Entertainment, Scripps Networks Interactive, and Viacom. The entertainment sector’s total contribution is around $17.79 billion, of which $10 billion is the Nashville industry’s share.
There are some people who are looking for some small investment businesses in the state. they are mentioned below.
- Recruiting agency
- Social media management businesses
- Music tutoring
- Business planning business
Tennessee LLC Formation Review
Time needed: 30 minutes.
To recap, here are the easy steps again when forming an LLC in Tennessee. Click on the steps in this list to read the full detail.
- Name your Tennessee LLC
The first thing you must do is choose a company name, including the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Choose a registered agent
In Tennessee, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming a Tennessee LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement, but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.
For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.
The cost to form an LLC varies per state.
Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.”
>Do not include words that could create confusion between your LLC and any government business.
>Words like ‘bank, attorney, university’ are restricted as well.
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.
Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.
As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website.
No. Never mail these documents or payments to the Secretary of State directly.
The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents
You are not required a Social Security number when getting an EIN You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
International EIN applicants do not need an SSN to get an EIN.