State of Tennessee LLC: Everything You Need to Know
The State of Tennessee LLC requires a series of steps to form a limited liability company in the state beginning with registering the name of the limited liability company (LLC).3 min read updated on February 01, 2023
Information for Forming a State of Tennessee LLC
- Create a name for your LLC. It must contain LLC, L.L.C, or Limited Liability Company. The name cannot use restricted words such as bank or attorney without filing additional paperwork. Words that cannot be used are those that would confuse the LLC name with that of a government or state agency.
- Research to make sure the name is available. Use the search option on the Tennessee Secretary of State website.
- Decide if your limited liability company will be manager-managed or member-managed.
- Choose a registered agent. This person or business agrees to handle the sending and receiving of legal paperwork on behalf of the limited liability company.
- You will need to file Articles of Organization with the Tennessee Secretary of State. This is a step required by the State of Tennessee to register an LLC. Filing can be done by mail, in person, or online.
- Create an operating agreement for the LLC. This is a legal document that outlines the ownership of the company as well as its operating procedures. The operating agreement serves to define the financial and working relationships between members and managers as well as among the business owners.
- Obtain an Employer Identification Number (EIN) from the Internal Revenue Service. It is required for filing federal and state taxes. The application is available online from the IRS website, or you may print and mail it.
Considerations for After the LLC Formation
- It's important that once the limited liability company is formed that you separate your personal assets from those of the LLC.
- Open a business bank account. By having a separate account, your personal assets are protected should the business become involved in litigation.
- For accounting purposes, having a separate business account makes it much easier when filing taxes.
- Getting a business credit card is another way of separating your personal expenses from those of the LLC. A business credit card also lets you build the LLC's credit history, which can be an advantage when seeking financial funding in the future.
- Register your business for Tennessee State Tax.
- If your LLC has employees, you must register for Unemployment Insurance Tax. This is done through the Tennessee Department of Labor & Workforce Development.
- Register for Tennessee Sales Tax if your LLC will be selling taxable goods. Register for Tennessee Sales and Use Tax with the Department of Revenue.
- Consider your accounting process. Accounting software is a good option for maintaining well-managed records.
- Obtain any business licenses or permits your limited liability company may require.
- Get insurance. This includes workers compensation Insurance if you have employees and general liability insurance, if applicable.
- To maintain your limited liability company in Tennessee, you are required to file an annual report with the Tennessee Secretary of State.
- If you decide to close your business, file an Articles of Dissolution form.
- Can I reserve a name for my LLC?
Yes. File a name reservation application with the Secretary of State along with a $20 filing fee. A name may be reserved up to four months. The application requires the name being requested along with the name, title, address, signature, and date of the applicant.
- Who is the registered agent and what kind of paperwork does a registered agent handle?
A registered agent takes care of "service of process" papers such as papers filed if the LLC is being sued. The registered agent must be either a corporation that is authorized to work in the state or a resident of Tennessee.
- Do I need an email address for an LLC?
It is something to consider to keep business correspondence separate from personal correspondence.
- I want to register my out of state LLC in Tennessee, is it considered the same?
When a company expands its existing business from another state to Tennessee, it is considered a foreign LLC.
- What does the IRS charge for an employer identification number?
The number is free of charge from the Internal Revenue Service.
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