How to File an LLC in Tennessee

Did you know that choosing the proper business structure can make or break your entrepreneurial dreams? What if we told you that filing for a Tennessee LLC could provide the flexibility you need and protect your personal assets? Let’s explore why a Tennessee LLC might be the perfect fit for you.

When it comes to filing, it’s essential to research your chosen state’s specific laws and regulations. Tennessee has its unique requirements you must meet for filing an LLC and maintaining compliance.

Key Takeaways: 

• Tennessee has a thriving small business community, with over 142,428 small businesses employing fewer than 100 employees.

• In Tennessee, LLC formation is a popular choice for new businesses due to its flexibility and liability protection. It requires filing with the Tennessee Secretary of State and paying state fees.

• LLC, which stands for Limited Liability Company, is a particular type of business structure that provides a clear separation between the assets of the company and those belonging to the owner or owners of the business. 

Fortunately, Tennessee has a thriving small business community, with over 142,428 small businesses employing fewer than 100 employees, according to the Tennesse Department of Economic & Community Development.[1] This makes Tennessee an attractive location for entrepreneurs looking to form an LLC.

Additionally, the state offers many resources and support for small business owners. From access to funding and mentorship programs to networking events and educational resources, Tennessee provides all the necessary tools to help small business owners succeed. By forming a Tennessee LLC, you can tap into this vibrant community and take advantage of the many opportunities for growth and success.

If you’re considering filing for a Tennessee LLC, keep reading for a step-by-step guide on the process and answers to frequently asked questions. 

What Is an LLC Formation?

LLC, which stands for Limited Liability Company, is a particular type of business structure that provides a clear separation between the assets of the company and those belonging to the owner or owners of the business. This structure offers personal liability protection and is beneficial for tax purposes.

In Tennessee, LLC formation is a popular choice for new businesses due to its flexibility and liability protection. It requires filing with the Tennessee Secretary of State and paying state fees. Once you form your LLC, you must pay an annual filing fee and register for sales tax if applicable. 

While LLCs provide liability protection, they are not exempt from all legal issues. Ensuring proper compliance and adhering to all state laws is crucial in maintaining the security offered by the LLC structure.

Step-By-Step Guide to Starting Your Tennessee LLC

By forming an LLC, you can enjoy the flexibility of managing your business however you want while protecting your personal assets. 

Before we dive into the details, it’s essential to understand that a filing fee is associated with forming an LLC in Tennessee and filling out the required paperwork for the Tennessee Secretary of State’s office. 

With that said, let’s get started with our step-by-step guide to forming your Tennessee LLC. We’ll cover everything from choosing a business name to obtaining any necessary licenses and permits and essential details about tax requirements and annual filing fees. Whether you’re a first-time entrepreneur or an experienced business owner, this guide will provide the information you need to start and operate your own LLC in Tennessee successfully.

Step 1: Choose a Business Name for Your Tennessee LLC

When choosing a business name for your Tennessee LLC, it’s essential to consider its availability, legal requirements, and brand identity. A strong name can help your business stand out and attract customers, so take your time selecting the perfect one.

Before filing your LLC in Tennessee, you must ensure your desired business name is available. You can search for name availability on the Tennessee Secretary of State’s website using their online business name database. Swyft Filings also offers a free Business Name Search tool, which can help you quickly identify any potential issues with your desired name.

When choosing a name for your Tennessee LLC, keep the following requirements in mind:

• Your chosen name must contain “LLC,” “LLC,” or “Limited Liability Company.”

• Your name must not include any words that suggest it is a corporation or partnership, such as “Corp,” “Inc,” or “LLP.”

• Your name must not infringe on any existing names or trademarks. You can check the Tennessee Secretary of State’s business name database to ensure your name is available.

• Your name must not be misleading to the public. For example, it should not imply that your business is associated with a government agency or charity if it is not.

After selecting a name for your Tennessee LLC, you can reserve it with the Tennessee Secretary of State. The filing fee for reserving a name is $20. If you still need to prepare to file the paperwork to establish your LLC, you can reserve your business name for up to 120 days.[2]

Registering a Domain Name for Your Tennessee LLC

After selecting an appropriate name for your LLC in Tennessee, securing a matching domain name for your business website is vital. This will make it easier for customers to find you online and help protect your brand from copycats and competitors. 

You can use a domain registrar such as GoDaddy or Namecheap to search for and purchase a domain name. Also, don’t forget to renew your domain name registration annually to ensure you maintain ownership of your chosen domain name.

Trademarking Your Tennessee LLC Name

Trademarking your Tennessee LLC name is essential in protecting your brand and preventing others from using your business name for their own purposes. 

Here’s what you need to know about trademarking your Tennessee LLC name:[3]

• Conduct a trademark search to ensure that your chosen name is available and not already used by another business.

• File a trademark application with the United States Patent and Trademark Office (USPTO).

• Monitor your trademark regularly to ensure no one infringes on your rights.

• Consider working with a trademark attorney to help guide you through the process and ensure your trademark application gets filed correctly.

Step 2: Fill Out Tennessee Articles of Organization

The State of Tennessee requires LLC owners to file Articles of Organization to create a legal business entity. There are several ways to file these articles, including E-file, print and mail, paper submission, and walk-in. Filing fees range from $300 to $3,000, depending on the number of members in the LLC.

Here is a list of the information you’ll typically need to include on the Tennessee Articles of Organization form:[4]

• The LLC’s name and address: This includes the name you’ve chosen for your LLC and a physical street address in Tennessee, where your business is located.

• The registered agent’s name and address: The registered agent is the person or company that will receive legal documents and other official mail on behalf of your LLC. You’ll need to include their name and address on the form.

• The LLC’s purpose: This brief statement explains what your LLC will do. It’s typically a short sentence or two describing the primary activities or services your business will offer.

• The management structure: You must indicate whether your LLC will be member-managed or manager-managed. If you choose manager-managed, you’ll need to list the name and address of each manager.

• The duration of the LLC: You’ll need to indicate whether your LLC will be a perpetual entity or if it will have a specific end date.

• The identity and physical addresses of all LLC members: You’ll need to provide the full legal name and address of each member of your LLC.

• The name and signature of the organizer: The organizer is the person who is responsible for filing the Articles of Organization. You’ll need to include their name and signature on the form.

By paying attention to the necessary information and taking the time to fill out the form correctly, you can ensure that your LLC is established and registered with the state of Tennessee.

Step 3: Hire a Tennessee Registered Agent

Every Tennessee LLC is required to have a registered agent on file with the Tennessee Secretary of State’s office. In Tennessee, a registered agent refers to an individual or organization responsible for receiving crucial legal documents and notifications on behalf of the LLC.

The registered agent for a Tennessee LLC must have a physical address located within the state and be available during regular business hours to receive service of process and other essential documents. 

It is possible to appoint yourself as the registered agent for your LLC. However, hiring a professional registered agent service is often beneficial to ensure you don’t miss any important correspondence.

A registered agent service can provide additional benefits, including privacy protection and convenience, as they can forward mail to you and keep your personal address off public records. 

When selecting a registered agent for a Tennessee LLC, conduct proper research and opt for a trustworthy service provider with a physical presence within the state. This will help ensure that your LLC remains in good standing and avoids any legal issues that can arise from missed deadlines or incorrect filings.

At Swyft Filings, we understand that finding a reliable Tennessee registered agent is essential for the success of your LLC. We offer a Registered Agent service that simplifies the process by providing a dedicated digital platform and a team of experts available to answer any questions. 

Step 4: Create an LLC Operating Agreement

An LLC Operating Agreement is a legal document outlining your Tennessee LLC’s ownership and operating procedures. While the state does not require it, creating a written operating agreement is essential for protecting your business and personal assets. The Operating Agreement will clarify how you’ll distribute profits and losses, the roles and responsibilities of LLC members, and procedures for decision-making and disputes.

Swyft Filings offers an LLC Operating Agreement service that simplifies creating a comprehensive operating agreement for your business in just minutes. 

Step 5: File for an Employer Identification Number

An Employer Identification Number (EIN) is a nine-digit number that identifies your LLC for tax purposes and allows you to open a business bank account, apply for business licenses, and register for state and federal taxes.

You can file online with the IRS to obtain an EIN at no cost. You will need to provide the following information:[5]

• Legal name and address of your LLC

• Name and social security number of the LLC owner

• Business structure of your LLC

• Reason for applying for an EIN

• Expected number of employees

Once your application is approved, you’ll receive your EIN via mail or email. It’s essential to keep this number safe and secure as you’ll use it for tax-related purposes for the life of your LLC.

Let Us Handle Your LLC Paperwork

At Swyft Filings, we understand that administrative work can take time away from what really matters, growing your business. Our team of experts is here to help you navigate the process of forming your Tennessee LLC, so you can focus on what you do best. 

We provide personalized service and support to ensure your LLC formation gets filed accurately and efficiently. With Swyft Filings, you can trust that your LLC will be formed in compliance with all Tennessee state regulations, leaving you with peace of mind.

FAQs:

How much does it cost to set up an LLC in Tennessee?

The cost to set up an LLC in Tennessee can range from $300 to $3,000, depending on the number of members and the filing requirements. Also, LLCs must pay an annual report filing fee of $50 and a registered agent service fee of $50 to $300 per year. Furthermore, the cost of obtaining a business license and state tax registration fees will vary depending on the business structure and the location of the LLC.

Here are some potential expenses to consider when filing for your LLC in Tennessee:

• Filing fee for Articles of Organization: $300-$3,000

• Annual report filing fee: $50

• Registered agent service fee: $50-$300 per year

• Business license fee: Varies by city/county

• State tax registration fee: Varies based on tax type and business structure

It’s important to note that these fees and costs can vary depending on your LLC’s specific needs and circumstances. Doing thorough research and considering consulting with a professional is recommended to ensure you accurately understand all the potential expenses involved in forming and maintaining your Tennessee LLC.

How is an LLC taxed in Tennessee?

In Tennessee, Limited Liability Companies (LLCs) are classified as pass-through entities, whereby the profits and losses of the LLC are reported on the personal tax returns of the LLC’s members. Therefore, the LLC itself does not pay federal income tax, but its members are responsible for paying taxes on their share of the LLC’s income. 

Additionally, Tennessee has a franchise tax that LLCs must pay annually. The franchise tax is calculated based on the greater of the LLC’s net worth or the book value of its tangible personal property located in Tennessee, and the tax rate is $0.25 per $100 of value.[6]

It’s important to note that LLCs in Tennessee may also be subject to other taxes depending on the type of business they operate and their revenue. For example, LLCs that sell goods or services subject to sales tax must collect and remit sales tax to the state. 

Also, LLCs with employees must pay state and federal payroll taxes, and LLCs that own property must pay property taxes. It’s essential to consult with a tax professional to understand all the tax obligations for your Tennessee LLC.

What are the benefits of a Tennessee LLC?

A Tennessee LLC offers several benefits for small business owners, including:

1. Limited liability protection: An LLC provides personal asset protection, meaning business owners are not personally responsible for business debts and liabilities.

2. Pass-through taxation: LLCs are taxed like sole proprietorships or partnerships, with the income and losses passing through to the owners’ personal tax returns.

3. Fewer formalities: Compared to corporations, LLCs have fewer formalities and requirements for meetings and record-keeping.

4. Flexibility in management structure: LLCs can choose between member-managed and manager-managed structures, providing flexibility in management.

5. Easy to form and maintain: LLCs are easy and affordable to establish and maintain in Tennessee.

Ultimately, forming a Tennessee LLC provides several benefits that can aid in the growth and success of your business. From liability protection to tax flexibility, an LLC can offer a solid foundation for your company. With Swyft Filings’ assistance filing your LLC paperwork, you can ensure the process is straightforward and seamless. 

How do you dissolve an LLC in Tennessee?

To dissolve an LLC in Tennessee, you must file a Certificate of Termination with the Tennessee Secretary of State.[7] The form must include the name of the LLC, the date of filing the Articles of Organization, and a statement that the LLC has no debts or other liabilities. 

The fee for filing the Certificate of Termination is $20. Once the form is filed and approved, the LLC gets officially dissolved. It’s important to note that you must also fulfill all tax obligations and other legal requirements before dissolving your LLC to avoid any potential legal issues. 

If you’re unsure about the process, it’s always a good idea to consult a legal professional to ensure everything is done correctly.

Bibliography:

1. Tennessee Department of Economic and Community Development. (n.d.). Shop Small, Shop Local. https://tnecd.com/news/shop-small-shop-local/#:~:text=There%20are%20over%20142%2C428%20small,and%20470%2C330%20non%2Demployer%20firms. Accessed March 4, 2023.

2. Tennessee Secretary of State. (n.d.). Form SS-9425: Application for Reservation or Renewal of Reserved Name. https://sos-tn-gov-files.s3.amazonaws.com/forms/SS-9425.pdf. Accessed March 4, 2023.

3. United States Patent and Trademark Office. (n.d.). Trademark Basics. https://www.uspto.gov/trademarks/basics. Accessed March 4, 2023.

4. Tennessee Secretary of State. (n.d.). Form SS-4270: Articles of Dissolution for Profit Corporation. https://sos-prod.tnsosgovfiles.com/s3fs-public/document/ss-4270.pdf?VersionId=yKmAphGYWAEjiNNWYALn6siSMF7241Vk. Accessed March 4, 2023.

5. Internal Revenue Service. (n.d.). Apply for an Employer Identification Number (EIN) Online. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Accessed March 4, 2023.

6. Tennessee Department of Revenue. (n.d.). Franchise & Excise Tax. https://www.tn.gov/revenue/taxes/franchise---excise-tax.html. Accessed March 4, 2023.

7. Tennessee Secretary of State. (n.d.). Form SS-4244: Application for Certificate of Authority. https://sos-prod.tnsosgovfiles.com/s3fs-public/document/SS-4244_0.pdf?VersionId=hfi3nrtrkxxhn.Jus3dbouyNvJ433mFl. Accessed March 4, 2023.