How To Get An LLC In Tennessee In 6 Easy Steps

Overview

Getting an LLC in Tennessee involves a straightforward process. Below, we’ll guide you through the essential steps and provide factual answers to common questions.

How To Get An LLC In Tennessee: Step-By-Step

1. Choose a Name for Your LLC:
   • Choose a unique and available name for your LLC.
   • Perform a Tennessee LLC name search through the Tennessee Secretary of State website.
   • Reserve your chosen name if needed.
2. Appoint a Registered Agent:
   • Appoint a registered agent with a physical address in Tennessee.
3. File Articles of Organization:
   • Complete the Tennessee LLC Articles of Organization form.
   • File by mail or online through the Tennessee Secretary of State website.
4. Operating Agreement:
   • Draft an operating agreement outlining the structure and operation of your LLC. Although not required by the state, it is highly recommended.
5. Employer Identification Number (EIN):
   • Obtain an EIN from the IRS for tax purposes.
6. File the Beneficial Ownership Information Report:
   • Beginning in 2024, Tennessee LLCs must submit a Beneficial Ownership Information (BOI) Report.

1. Choose A Name For Your LLC

Check if the name you desire for your Tennessee LLC is available in the state. This is important because no two businesses in Tennessee can share the same name.

To do this, use the Secretary of State’s Business Entity Search tool to compare your business name with existing ones in Tennessee. 

Make sure your LLC name is unique by following Tennessee’s naming rules to increase the chances of your LLC name being approved.

If you need, you can reserve the name for your LLC for up to 120 days. The cost is $20.

2. Appoint A Registered Agent 

In Tennessee, you need to choose a registered agent for your LLC. This is the person or company allowed to get legal papers and important notices on behalf of your LLC.

Your registered agent can be a person, like yourself or one of your employees, or a company that offers this service.

The registered agent has to meet some requirements:

• If it is a company, it must offer registered agent services.
• The agent must have an address in Tennessee.
• The agent must be there in person and ready to get documents during regular business hours.

3. File Tennessee LLC Articles Of Organization

To officially establish your Tennessee LLC, you need to file the Tennessee LLC Articles of Organization. 

This document provides essential details about your LLC and serves as the official registration.

To prepare the certificate, gather the following information: your LLC name, the name and address of the registered agent, the purpose of your LLC business, and the number of members. Provide the effective date if it is different from the filing date. 

The form is a straightforward online submission or can be sent by mail.

The Tennessee LLC Articles of Organization filing fee is $300 minimum. It depends on the number of members. After the first six members, an additional $50 is charged for each additional member ($3,000 is the maximum).

Once filed, the Tennessee Secretary of State will review the document, and upon approval, your LLC attains legal business entity status. 

You can undertake this process independently using our step-by-step guide or opt for the convenience of hiring a company for assistance.

4. Create An Operating Agreement 

An operating agreement is a document that shows how your LLC will do business. 

While Tennessee doesn’t make it a must, having one is crucial. It helps in different ways, like resolving money disputes or potential legal issues. Without it, the courts decide based on state laws, not necessarily what’s best for the LLC.

The agreement can include things like the LLC’s name, address, how long it will last, the registered agent’s details, info from the articles of organization, the business’s purpose, member contributions, how profits and losses are shared, rules for new and leaving members, how the LLC is managed, and clauses about protection and responsibility.

5. Obtain Employer Identification Number (EIN)

The Internal Revenue Service (IRS) gives your LLC a nine-digit number called an Employer Identification Number (EIN) to identify it for taxes. You can get your EIN by mail or online through the IRS.

This number helps you:

• File and handle taxes at both the state and federal levels.
• Open a bank account for your business.
• Apply for permits and licenses.
• Hire employees.

Obtaining an EIN is FREE.

6. File The Beneficial Ownership Information Report

Starting in 2024, many Tennessee LLCs must now file an extra document at the federal level, known as the Beneficial Ownership Information (BOI) Report, to the Financial Crimes Enforcement Network (FinCEN). 

This report mandates disclosing information about your company applicant and all beneficial owners to FinCEN. You can submit it online using the Beneficial Ownership Information E-filing System or opt for a professional service to handle it for you.

Read BOI FAQs here.

Review: What Is Needed To Form An LLC In Tennessee?

To form an LLC in Tennessee, you need:

• A unique LLC name.
• Registered Agent information.
• Articles of Organization.
• Operating Agreement (recommended).
• Employer Identification Number (EIN).

What Forms Do You Need To Get An LLC In Tennessee?

• Application to Reserve LLC Name (if needed)
• Articles of Organization (online)
• Articles of Organization (PDF)
• EIN Application Form
• BOI Form

How Much Does It Cost To Start An LLC In Tennessee?

The cost to start an LLC in Tennessee involves several steps, each with its own associated fees:

• Articles of Organization Filing Fee: $300 (minimum)
• Expedited processing fee: $25 (for in-person submission)
• Name Reservation Fee (if needed): $20
• Annual Report Fee: $300 (minimum)

What Is The Tennessee Annual Report?

Tennessee LLCs need to submit a yearly report known as the Annual Report to the state. This report ensures the government has current contact details for your business and is informed about any changes in ownership.

It is due on the 1st day of the fiscal year of your company operation (usually April 1st).

The annual report fee in Tennessee is similar to the fee for Articles of Organization: $300 is for the first six members, adding $50 for each member after that ($3,000 is the maximum).

What Is The Tennessee Business Tax?

Tennessee business tax applies to businesses grossing $100,000 or more, with state and city components. All businesses selling goods or services, including certain out-of-state activities, pay state tax.

City tax applies if the business is in an enacted city. Registration is done via the Tennessee Taxpayer Access Point. Taxes are based on annual gross receipts, due on the 15th day of the fourth month after the fiscal year.

A $15 business license fee is required, payable to the clerk.

In-state businesses with $3,000-$100,000 need a minimal activity license; over $100,000 requires a standard license. Out-of-state businesses with substantial nexus must register and pay tax on gross receipts exceeding $100,000, with no need for local business licenses.

How Long Does It Take For An LLC To Get Approved In Tennessee?

If you send your LLC application by mail, it will be approved in 3-5 business days, plus the time it takes for the mail (1-2 weeks in total).

However, if you file online, your LLC can be approved in one day.

What Are The Benefits Of Getting An LLC In Tennessee?

• Limited liability protection for members
• Pass-through taxation
• Flexible management structure
• Credibility for business transactions

Is Tennessee A Good State To Get An LLC?

Whether Tennessee is the right state for your LLC depends on where you live and do business. If you live or operate in Tennessee, it makes sense to start your LLC there. 

Getting An LLC In Tennessee: Next Steps

Once your LLC is registered, you can:

• Get the permits and licenses you need for your business, like health or zoning permits.
• Register your business with the state’s tax agency.
• Open a business bank account.
• Apply for a business credit card.
• Buy insurance for your business.
• Safeguard your name and logo with a trademark.

To maintain your LLC in Tennessee, you must:

• Update any changes to the registered agent or business address promptly.
• File an Annual Report.
• Pay Taxes (business tax, plus owners file their individual tax returns)

Conclusion

Forming an LLC in Tennessee involves a few key steps, from name reservation to obtaining an EIN. 

Carefully following the process ensures a smooth establishment of your LLC. 

For more detailed information and to access the necessary forms, visit the Tennessee Secretary of State website.