Are you an entrepreneur looking to start a business in Tennessee? If so, starting an LLC might be the right choice for you. LLCs offer personal liability protection for the owners and pass-through taxation benefits, making it a popular business structure in the state. However, the process of opening an LLC can be daunting, especially if you’re not familiar with the requirements. In this article, we’ll guide you through the steps to open an LLC in Tennessee and highlight the costs and files required.
It’s essential to consider factors such as your business plan, industry-specific requirements, and local business regulations when starting an LLC in Tennessee. By taking the time to structure and form your LLC properly, you can lay the foundation for a successful and protected business venture.
Three Things To Be Aware Of When Starting Your LLC
The video below covers the following three things you must know when setting up your LLC.
- Commingling Funds
- Registered Agent
- Piercing the Corporate Veil
If you are unfamiliar with these terms, please watch the video below.
Table of Contents
5 Steps to Create an LLC in Tennessee
Creating a Limited Liability Company (LLC) in Tennessee is a straightforward process that involves some paperwork and filing with the Tennessee Secretary of State. Here are some steps to guide you through the process.
- Choose a unique name for your LLC: The name must not be identical or similar to an existing LLC or corporation in Tennessee.
- Appoint a registered agent: Your LLC must have a registered agent with a physical address in Tennessee to receive legal documents on behalf of the company.
- File Articles of Organization: You’ll need to file Articles of Organization with the Tennessee Secretary of State’s office and pay a filing fee
- Create an Operating Agreement: Although not mandatory, it’s a good idea to create an operating agreement that outlines the ownership structure, management, and other important aspects of your LLC.
- Obtain necessary licenses and permits: Depending on your business type, you may need to obtain licenses or permits before operating in Tennessee.
Creating an LLC in Tennessee is a simple process that can be completed within a few steps. By following the guidelines and ensuring that you have met all the requirements, you can establish your business and start operating in the state.
Costs to Open an LLC in Tennessee
LLCs are popular business structures because they offer personal liability protection for the owners and pass-through taxation benefits. However, there are costs associated with starting an LLC in Tennessee that you should be aware of.
- LLC Filing Fee: $308 (paid to the Tennessee Secretary of State)
- Business License Fee: $15 – $30 (varies depending on the county/city where your LLC is located)
- Annual Report Fee: $50 (paid to the Tennessee Secretary of State every year to keep your LLC in good standing)
- Attorney Fees: Depending on the complexity of your business and the services you require, you may need to hire an attorney to help you with the formation process. Attorney fees can range from a few hundred dollars to thousands of dollars.
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Starting an LLC in Tennessee involves several costs, including the LLC filing fee, business license fee, annual report fee, and attorney fees. Before starting an LLC, it’s important to consider these costs and create a budget to ensure that you have enough funds to cover all the expenses.
Files needed to open an LLC in Tennessee
Starting an LLC in Tennessee requires some essential documents that you need to prepare to get your business up and running.
- Articles of Organization: This document establishes your LLC and includes basic information such as the LLC name, registered agent, and purpose of the LLC. You can file it online or mail it to the Tennessee Secretary of State.
- Operating Agreement: While not required by law, it’s highly recommended to have an operating agreement in place as it outlines the ownership and management structure of your LLC.
- Business License: Depending on the county/city where your LLC is located, you may need to obtain a business license or permit.
- EIN: An Employer Identification Number (EIN) is necessary if your LLC has employees or if you want to open a business bank account. You can apply for an EIN online through the IRS website.
To open an LLC in Tennessee, you need to prepare several documents such as the Articles of Organization, Operating Agreement, business license, and EIN. These files establish your LLC, outline the ownership and management structure, and allow you to conduct business legally in Tennessee.
Bizee (formerly Incfile) is our preferred choice for LLC formation because they provide all of the services your new business needs while being transparent with pricing. They also offer a free registered agent service for the first year, even in their free package.
Check out a behind-the-scenes of what managing your LLC looks like in your dashboard in this Bizee review.
Things to consider when opening an LLC in Tennessee
Opening an LLC in Tennessee can be a wise decision for many entrepreneurs and business owners. However, there are several factors to consider when forming an LLC. It’s essential to understand the state’s legal requirements, tax laws, and business climate to ensure that your LLC is formed successfully and operates efficiently. In this answer, we will highlight some of the key considerations when opening an LLC in Tennessee.
- Legal Requirements: Tennessee has specific legal requirements for forming an LLC, such as filing the Articles of Organization and obtaining an EIN. Be sure to follow these requirements to ensure that your LLC is established correctly and legally.
- Tax Laws: Tennessee does not have a personal income tax, but it does have a state sales tax of 7%. As an LLC, you may be responsible for paying sales tax on your business transactions. It’s important to be aware of these tax laws and how they will affect your LLC.
- Business Climate: Tennessee is known for its friendly business climate and low business costs. It’s essential to research the state’s economy, industry trends, and business resources to determine if Tennessee is the right place to start your LLC.
- Liability Protection: Forming an LLC provides personal liability protection for its members. This protection can help shield personal assets from business liabilities and debts.
- Management Structure: LLCs can be managed by the members or by designated managers. It’s important to consider the management structure that will work best for your LLC and to outline it in the operating agreement.
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Opening an LLC in Tennessee requires careful consideration of legal requirements, tax laws, business climate, liability protection, and management structure. By taking these factors into account, you can ensure that your LLC is formed successfully and operates efficiently.
It’s also important to consider the costs associated with starting an LLC in Tennessee, such as the filing fee, business license fee, annual report fee, and attorney fees. By following these steps and preparing the necessary files, you can successfully open an LLC in Tennessee and start your journey as a business owner.
For more information on starting an LLC in Tennessee, be sure to visit other resources on our website. Our articles on the various steps involved in forming an LLC, as well as information on the benefits of an LLC, can provide you with the information you need to make informed decisions about your business.
Our guides on registering for taxes, obtaining an EIN, and creating an operating agreement can help you navigate the legal requirements of starting an LLC in Tennessee. Whether you’re just starting out or looking to expand an existing business, forming an LLC in Tennessee can be a great choice. For more information and support as you begin this process, be sure to visit our website and take advantage of our comprehensive resources.
Legal Disclaimer: This article contains general legal information, does not constitute professional legal advice for your situation, and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.
Where Do I Even Begin with Starting a Business?
This depends on where you’re at in your journey.
Step 1 is deciding what type of business you want to start.
Step 2 is filling out the BizBuddy Pathway for your business.
Step 3 is legally forming your business.
Check out the FAQs below that match up with where you’re at in your process.
What Type of Business Should I Start?
If you’re unsure of what kind of business you want to start, you need to assess your situation. Things like your skills, available time, passion(s), money, and risk tolerance all factor into your decision. This post on What Business to Start is a great place to assess your situation and find the right fit for your unique situation.
What is the BizBuddy Pathway?
Research says that 92% of people with a business idea will never start a business. There are no shortages of ideas… execution is the scarce resource. The BizBuddy Pathway is a simplified approach for you to lay out your business journey.
Think of it like writing a book. The Pathway is like coming up with the title, storyline, and chapters, so you have the outline of where to begin. This is how you become the 8%.
How Do I Legally Form a Business?
It’s not as difficult as you think. That’s because in the U.S. small businesses accounted for 62% of all new jobs created between 1995 and 2020. That’s why you hear people say small business is the backbone of the economy. Check out this Guide on How to Legally Form a Business (in the U.S.). It will give you a full understanding of what goes into forming your legal entity and the options available to you. If you’re unfamiliar with terms like “Piercing the Corporate Veil” you’ll want to check out that guide.
How Do I Grow My Business?
Congrats. You’re already in the game and looking to grow. BizBuddy was founded by Eric Worral who started his first business at 13 years old (sealing driveways). That was well over 20 years ago when he had to figure out how to get new customers. No matter what business you’re in you need paying customers. This is a Guide on How to Get More Customers for Your Business. It’s a comprehensive overview of how to think about your category of business and the marketing strategies to implement. Onward and Upward!