Planning to start an LLC in Tennessee?
This simple step-by-step will help you register an open your own LLC.
7 Steps to Register an LLC in Tennessee
- Step 1: Choose a name for your LLC
- Step 2: Appoint a registered agent
- Step 3: File for articles of organization with Tennessee Secretary of State
- Step 4: Get an EIN (Employer Identification Number) from the IRS
- Step 5: Prepare an LLC operating agreement
- Step 6: Register with Tennessee State Tax Authorities
- Step 7: Open a business bank account
Last updated: May 2023Start your LLC the easy way
Forming your LLC is a checkbox that needs to be ticked. Easy, fast and worry-free. We reviewed the 13 most popular LLC formation services to figure out who truly understands what new founders need. Our recommendation:
We don’t make up scores.
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- Formed 1,000,000+ LLCs
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Last updated: May 2023Step 1: Come up with a name for your LLC
The Tennessee Secretary of State requires LLC business names to:
- Include the words ‘Limited Liability Company' or ‘LLC' (or their abbreviations, L.C. or LLC.) at the end of its name.
- Not contain any words prohibited by Tennessee law.
- Not be deceptively similar to another Tennessee existing business entity's name.
Business owners can use the name search tool to check if their intended name is available. If that’s the case, you can also opt in to reserve a business name for 120 days. It costs $15 to do so.
The Tennessee name reservation form can be completed online, by mail, or in person at the Tennessee Secretary of State's office in Nashville.
Also, you may choose to register an assumed name (doing business as “DBA” name) on top of your LLC name. It makes sense if you plan to operate several types of brands or just want to brand your business under a name different from your legal one.
The cost of DBA in Tennessee is $15 per name.
Step 2: Appoint (or become) a registered agent
The good news is that you can pick anyone to serve as your registered agent, and it doesn't necessarily have to be someone affiliated with your LLC.
Whether you name a corporation or an individual as your registered agent, you’ll need to list their physical street address (not a P.O. box) on the company formation documents. Most LLC owners designate either an employee or a trusted third party to act as their registered agent.
You may want to hire a registered agent service in TN instead. Registered agents charge fees, but they also offer other statutory compliance assistance like annual registration renewals and business document processing.
You can hire a professional service provider for about $100/year. Using a professional service also ensures your registered agent is available during business hours to receive service of process on your LLC’s behalf.
Some business owners choose to serve as their own registered agents. It’s the least expensive option, but you’ll have to personally accept legal papers on behalf of your Tennessee LLC and handle all statutory compliance issues internally.
The only problem with this is that if you can’t receive any legal documents, the state can suspend your company for failing to comply with LLC requirements.
Step 3: File for articles of organization with Tennessee Secretary of State
The official step to forming an LLC is to file Form SS-4720, the Articles of Organization for a Limited Liability Company, with the Tennessee Secretary of State (SOS).
Tennessee has a peculiar fee structure where articles of organization cost has a base fee of $300 + an extra $50 for each LLC member:
- Minimum fee is $300 for single-member LLC.
- Maximum fee is capped at $3,000.
This cost structure applies to both domestic and foreign LLCs.
The registration form can be filed online or mailed with the fees to:
The Tennessee Secretary of State
Business Services Division
312 Rosa L. Parks Avenue | Snodgrass Tower, 3rd Floor
Nashville, TN 37243
Step 4: Get an EIN (Employer Identification Number) from the IRS
LLC members can apply for an Employer Identification Number (EIN) on the IRS website. The EIN is a 9-digit number that uniquely identifies your business structure for federal tax purposes. It’s similar to an individual’s social security number.
Once the application is complete, you can immediately use the EIN to register with state tax authorities, apply for business credit, or add employees to your payroll.
Step 5: Prepare an LLC operating agreement
An operating agreement legally specifies your LLC’s management structure, members’ duties and responsibilities, capital investment and profit distribution provisions, and any other operational tidbits you may want to include. Having an operating agreement can protect you from future disagreements among members.
Multi-member LLCs benefit the most from having an operating agreement. Single-member LLCs need not worry about an operating agreement until you decide to scale your business and bring in another member on board.
Step 6: Register with Tennessee State Tax Authorities
Doing business in Tennessee means that you’re bound to pay different types of local state taxes such as:
- Business tax
- Gross receipts tax
- Annual franchise tax
- Excise tax
- Sales tax
Every LLC earning over $3,000 annually from the state of Tennessee has to register and pay the business tax. Business tax is managed by the state and paid annually, on the 15th of the 4th month after your fiscal year ends.
- Domestic LLCs with gross receipts less than $10,000, you must obtain a minimal activity tax license.
- Domestic LLCs with gross receipts over $10,000 must pay $15 for a business license from the county where the business is located.
Foreign LLCs don’t need a county tax to operate, but owners must pay taxes on gross receipts over $10,000 to the Tennessee Department of Revenue.
Certain businesses, mainly selling soft drinks and alcohol, are subject to gross receipts tax instead of business tax.
Finally, sale and use tax is charged atop of business tax. Also, Tennessee-based businesses are subject to the annual franchise and excise taxes.
You can learn more about your business tax obligations from a series of manuals published by the Tennessee Department of Revenue.
Step 7: Open a business bank account
The next step is to open a business bank account for your LLC.
Business owners must separate business transactions from personal finances. Failure to do so can lead to legal consequences and loss of good standing with the state.
You'll need your articles of organization and, most likely, an opening deposit between $25-$100.
Some Tennessee banks like First Horizon, SunTrust, and local credit unions will also require you to complete a lengthy application which includes providing personal information for all LLC members.
Business checking accounts also offer debit cards, access to bankers, and higher interest rates than personal accounts.
Pros and cons of forming an LLC in Tennessee
There are benefits to forming an LLC in general, but Tennessee has added incentives for startups and small businesses. The state has made many resources available — from online educational tools to financing options — for helping get your business off the ground.
The good:
- Favorable business climate
- Access to funding, mentorship, and startup resources through the Tennessee Department of Economic and Community Development
- LLC formation steps can all be done online
The bad:
- Annual franchise and excise taxes
- State-wide business tax or gross receipts tax
- High annual report costs
Recently asked questions about opening an LLC in Tennessee:
The following are some frequently asked questions regarding forming a Limited Liability Company in Tennessee.
Last updated: May 2023Start your LLC the easy way
Forming your LLC is a checkbox that needs to be ticked. Easy, fast and worry-free. We reviewed the 13 most popular LLC formation services to figure out who truly understands what new founders need. Our recommendation:
We don’t make up scores.
Best LLC Service 2022
- Formed 1,000,000+ LLCs
- $39 formation includes registered agent service
- Fast formation & same day filing
- Exceptional customer reviews
Last updated: May 2023