Starting an LLC in Tennessee is a great way to protect your personal assets and gain credibility with customers and partners. An LLC, or limited liability company, is a business entity that offers its owners’ limited liability protection from lawsuits and debts. This means that if your LLC is sued or owes money, your personal assets – like your home or savings – are protected. Forming an LLC in Tennessee is relatively simple and can be done online in a few steps.
Before we dive in, here’s a really good explanation video on starting an LLC in Tennessee for those who prefer a video guide.
Benefits of starting an LLC in Tennessee
There are many benefits to starting your LLC in Tennessee. As expert start-up guides will advise you, it has the advantage of limited liability protection for its members. It’s more compact than a Corporation or S Corporation.
Limited Liability Protection
One of the most significant benefits of starting your Tennessee business as an LLC is that it offers limited liability protection, which means that if a lawsuit arises from a customer or client for something you did while operating your business – it won’t follow you home. Rather than the people who own it, the business itself is liable for paying out any damages.
Your personal assets, such as your car or house, are separated from your Tennessee business assets and aren’t at risk of being taken away if someone sues your business for something you did wrong. Many entrepreneurs start their businesses as LLCs because of this benefit.
Taxation flexibility
An LLC in Tennessee has the choice of being taxed as a Sole Proprietorship, Partnership, or Corporation. It’s a good deal for start-ups since they don’t have to worry about finding an accountant or anything like that just yet.
Note: Single-Member LLCs are treated as Sole Proprietorships by default.
Minutes of meetings not required
Lastly, one of the benefits of starting your LLC in Tennessee is that no minutes are required for meetings. People don’t have to travel for monthly meetings or anything like that. They need to follow the operating agreement, which doesn’t take too many hours out of the day.
Tennessee LLC Rules & Requirements
This is a quick summary of the most important rules and requirements that this article will go through in-depth.
To apply for permission to form an LLC in Tennessee, the company must have a in Tennessee. Your LLC’s name must include “Limited Liability Company,” or their abbreviation, “LLC.” It can’t be something that resembles another already existing business. Ensure you as a business owner keep accurate records and reports of your business transactions.
Best Tennessee LLC Formation Services
If you’re thinking about starting your LLC in Tennessee, it’s a good idea to use a professional service that can handle the process for you. These services will ensure you get all the necessary paperwork filed correctly and timely so that you don’t have to worry about anything going wrong with your business registration.
Finding the Best LLC Formation Services in Tennessee
Choosing the best LLC formation services in Tennessee is an essential first step for anyone looking to start their own. Here are some of the most critical factors you’ll want to consider:
- Price
- Effectiveness
- Customer service/communication
- Integration with accounting software (if necessary)
These factors will help you narrow down your list of potential providers to find the one that provides you with the professional service you need at an affordable price. We have reviewed some of Tennessee’s best LLC formation services here: Best LLC Formation Services.
As mentioned above, it’s usually recommended that if you’re unfamiliar with this kind of thing, then you should consider allowing LLC formation service providers to help you start your own business here in Tennessee. These services will ensure that you comply with state law and all the rules and requirements. If anything goes wrong, they’ll have your back so that you don’t have to worry about it.
However, if you’re looking to do it on your own, then you can continue reading our guide on how to start an LLC in the state of Tennessee.
The following is a step-by-step guide of what you can expect when forming an LLC in Tennessee:
5 Steps to Starting an LLC in Tennessee
- Name your Tennessee LLC
- Choose your Tennessee Registered Agent
- File your Tennessee LLC Articles of Organization
- Create your Tennessee LLC Operating Agreement
- Get an EIN for your Tennessee LLC
Step 1: Name your Tennessee LLC
Choosing your name can be one of the most challenging parts of starting your Tennessee LLC. You’ll have to choose a name that’s not already in use by another Tennessee LLC or restricted by the state.
The rules for naming your Tennessee limited liability company are as follows:
- Your name cannot mislead people into thinking the Tennessee LLC was set up by the government or is a federal government agency.
- The name can’t be too similar to another Tennessee company’s
- Your name has to end with an LLC designator (LLC, LTD., etc.)
- You may need to fill out additional paperwork if you want to use certain words in your Tennessee LLC name, including bank, trust, trustee, incorporated, Inc., and corporation.
- If you want to see if a specific LLC name is available, you can run a business name search on the Business Entity Search page of the Tennessee state website.
☞ Search Tennessee Business Database
After choosing the perfect name for your new Tennessee business, you can also secure a good domain name. A domain name is also helpful if you want a business email address @yourllc.com.We recommend using Namecheap to register your domain. They have great prices, fast service, and an easy-to-use website.
☞ Check if your domain name is available
Step 2: Choose your Tennessee Registered Agent
Before you form your LLC in Tennessee, you’ll need to appoint a registered agent with a physical street address in the state of Tennessee. This person or entity would be responsible for receiving essential documents on your behalf if anything happened that would require that sort of thing (lawsuits, etc.). You can name yourself as your Tennessee registered agent, but that isn’t advisable because you would not be able to claim any anonymity.
What is a Registered Agent?
A Tennessee registered agent is an individual or business entity that agrees to accept the service of process on behalf of a Limited Liability Company.
When you create a Limited Liability Company in Tennessee, the State of Tennessee requires that this registered agent be appointed for your LLC to become effective. The Tennessee Secretary of State’s Office will not file your Articles of Organization unless you designate a registered agent on your application form.
Who can be a Registered Agent in Tennessee?
For a registered agent, you can select a person or an organization. The individual can be a Tennessee resident, a Tennessee corporation, or a non-Tennessee corporation with a business presence in Tennessee.
You can also use a Tennessee registered agent service to appoint a registered agent and obtain a business address. Services such as Zenbusiness and Northwest Registered Agent offer this service as a feature of some of their packages when you register a Tennessee company with them.
What does a Registered Agent in Tennessee do?
A registered agent in Tennessee is available during normal business hours to accept important documents and notices on behalf of your LLC. These can be official court papers such as lawsuits or service of process documents that will require the registered agent’s signature.
A registered agent is not responsible for the management of your Tennessee LLC, nor are they required to do anything with the documents once they are received at their business address except for filing them under Tennessee law.
Step 3: File your Tennessee LLC Articles of Organization
You’ve chosen your Tennessee name and appointed a registered agent, and now it’s time to create your LLC and become a recognized legal entity.
Before filing, you will need to decide between a member-managed and manager-managed LLC. The members run a member-managed LLC, while a designated manager runs a manager-managed LLC.
To start an LLC in Tennessee, you’ll need to file your Articles of Organization with the Tennessee Secretary of State, which can be done online. The online filing fee is $300, and a person must file this with authority to do so on behalf of the Tennessee LLC.
File your Tennessee LLC Articles of Organization Online
You’ll need the following documents to submit your papers:
- The official name of your Tennessee LLC
- A brief description of the purpose of your Tennessee LLC
- Your Tennessee LLC’s street address
- Your Tennessee registered agent’s name and address
- The signature of your registered agent
- Your LLC’s authorized person’s signature
- Your return address
You can submit your Articles of Organization through Tennessee’s online business filing system.
☞ File your Tennessee LLC Articles of Organization Online
File your Tennessee LLC Articles of Organization by Mail
If you choose not to file online, you can also mail your Articles of Organization to the Secretary of State. The filing fee is $300 and a person must sign the formation documents with authority to do so on behalf of your Tennessee LLC. You’ll need the download the filing form and mail it.
☞ Download your Tennessee LLC Articles of Organization Filing Form
Mail to:
"6th floor - Snodgrass Tower
Attn: Corporate Filing
312 Rosa L. Parks Ave.
Nashville, TN 37243"
Step 4: Create your Tennessee LLC Operating Agreement
After filing your Tennessee LLC Articles of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of your Tennessee LLC. These rules address issues such as how LLC owners will spend the money, whether voting takes place within your business, what happens if someone wants to sell their interest in the company etc.
Tennessee does not require an LLC to have an operating agreement, but it is recommended that you create one. An operating agreement ensures that all members know and understand their roles within the company. If they ever need to take legal action, they will show a court of law that the company functions as more than just an unincorporated association.
This operating agreement should be thorough but concise, outlining everything you want to include regarding the membership responsibilities of your Tennessee LLC, so there are no misunderstandings down the line.
The operating agreement will also be necessary when you open a business bank account in Tennessee.
Step 5: Get an EIN for your Tennessee LLC
An EIN, or Employer Identification Number, is a unique number that the IRS issues to businesses for tax purposes. An EIN is like your business’s social security number. You can use it to file state or federal-level tax returns and financial statements with different government agencies or open a business bank account.
An EIN is required for several reasons. First, as mentioned above, it is needed to open a business bank account for your Tennessee LLC. You will also need an EIN to hire employees, as it is used on employment tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of your Tennessee LLC’s various tax classification options.
Applying for an EIN is a straightforward process. You can do it online at the IRS website. Alternatively, you may download and complete form SS-4 and then mail it to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax:
(855) 641-6935
Applying for an EIN for your business is free of charge.
Important next step: Beneficial Ownership Information
As of 2024, a significant new law known as the Corporate Transparency Act (CTA) has come into effect. This law requires most LLCs, including those formed in Tennessee, to file a Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN). The goal of this filing is to increase financial transparency and prevent criminals from using shell companies to hide illicit activities like money laundering.
File a Beneficial Ownership Information (BOI) Report
Understand the Requirement: The Corporate Transparency Act (CTA) mandates that most LLCs file a Beneficial Ownership Information report with the Financial Crimes Enforcement Network (FinCEN). This provides transparency regarding the true owners of your company.
Gather Information: You’ll need the following about each beneficial owner and company applicant:
- Full legal name
- Date of birth
- Current residential or business street address
- Unique identifying number from an acceptable ID (e.g., driver’s license number, passport number)
File the Report: The method of filing is determined by FinCEN and may change. Check the most up-to-date instructions on FinCEN’s website.
Important Deadlines:
- LLCs formed before January 1, 2024: Companies in existence before this date have a more extended deadline. They have until January 1, 2025, to file their initial BOI report with FinCEN.
- LLCs formed in 2024: Companies formed during 2024 have 90 calendar days from the date they receive actual or public notice of their creation or registration becoming effective. This means 90 days from when the state officially processes your LLC paperwork or makes information on your company publicly available.
- LLCs formed on or after January 1, 2025: Companies formed from this date onward will have a stricter deadline of 30 calendar days to file their initial BOI reports with FinCEN.
Important Notes:
- Failure to file the BOI Report can carry civil and criminal penalties.
- The information you provide is protected, but accessible to law enforcement agencies.
Tennessee LLC Processing Time
Online filings are immediately approved for the state of Tennessee to process your Articles of Organization and approve your LLC.
If you choose to file by mail, the processing time is approximately 3-5 business days.
Tennessee LLC Frequently Asked Questions
How much does it cost to start an LLC in Tennessee?
The online filing fee is $300, and the mail filing fee is $300 in Tennessee.
How do I set up an LLC in Tennessee?
Step 1: Choose a name for your Tennessee LLC
Step 2: Choose a Tennessee Registered Agent
Step 3: File the Articles of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN
Is there an annual fee for LLC in Tennessee?
There is an annual fee of $50 per member in Tennessee. The minimum annual filing fee is $300 in the state of Tennessee and the maximum is $3,000.
How long does it take to start an LLC in Tennessee?
It takes 3-5 business days to start an LLC in Tennessee when filing by mail and are immediately approved when filing online.
