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by Mike Vestil 

How Much Does It Cost To Start A Tennessee LLC?

Are you thinking about starting a limited liability company (LLC) in Tennessee, but you’re worried about the cost? You shouldn’t be! To start an LLC in Tennessee costs $300, plus an additional $50 filing fee per member of your LLC, which caps out at $3,000. That’s not bad when you consider all the amazing benefits you’ll enjoy as an LLC. 

In this post, we’ll cover all the additional costs of starting a Tennessee LLC, and guide you through the process so you can avoid paying any additional fees. We will discuss:

  • Reserving a business name
  • Filing Articles of Organization
  • Choosing Your Registered Agent
  • Getting your business license
  • Drafting your Operating Agreement
  • Getting Your EIN
  • Filing your annual report
  • Why Start an LLC
  • Additional FAQs

Let’s get started:

Cost Of LLC In Tennessee: Reserving Your Business Name

The first step in forming an LLC in Tennessee is to make sure your business name is available. To form an LLC, your organization’s name must include either “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” in its title. You cannot include anything else related to a government entity (e.g., “State Department,” “Treasury,” “FBI,” etc.) or include the word “corporation,” “incorporated,” or any of their abbreviations.

Run a name search on the Secretary of State’s website. If it’s available there, check with the Trademark Electronic Search System (TESS) database. If your business name is available for both, you can opt to reserve your business name for a $20 filing fee. This ensures your chosen LLC’s name is reserved for 120 days, which should be more than enough time to gather everything else you need to start your LLC. 

Did you reserve a business name that’s great for official documents, but it’s not something you want to use in everyday conversation? If so, you can also file for a “Doing Business As” (DBA) name, which you can use to establish brand identity and name recognition. DBA filing costs can vary depending on where you live. For example, to file a DBA in Knox County, it’ll cost you $15.

We also recommend looking up the URL availability of your organization’s name. Getting a domain name that matches your LLC’s name will help your target audience find you online.

LLC In Tennessee Cost: Filing Your Articles Of Organization

Filing your Articles of Organization in Tennessee can get expensive, but it’s required, since these are the legal documents that help make your LLC official. Your Articles of Organization include:

  • Your company name and “Doing Business As” (DBA) designations
  • The names of every LLC member
  • Type of business structure
  • Where you're primarily doing business
  • The name and address of your company registrar
  • The name and address of your registered agent (more on this in a second)

In Tennessee, your LLC filing fee will cost you anywhere from $307 to $3,000, depending on how many members your LLC has. In general, it will cost you $50 for every LLC member you have, but does not go below $307. If you have one member or six, it’ll cost you $307. If you have 20 members, it’ll cost you $1,000. 60 members is $3,000. 150 members, since $3,000 is the maximum, will also cost you $3,000

Choosing Your Registered Agent

Your registered agent is someone with a physical address (not a P.O. Box) who accepts all legal and government correspondence for your LLC. It can be one of your LLC members or partners, or a business entity authorized to do business in Tennessee. 

Your registered agent’s address becomes public record once you obtain your LLC license. For privacy reasons, many LLC owners use a business entity as their registered agent. Whatever your selection may be, it won’t cost you anything.

Obtaining Your Tennessee Business License

Regardless of what business entity you choose, you will likely have to obtain business permits and licenses to operate in Tennessee. Which ones you’ll require depends on your industry and location. In some cases, you may need local, state, and federal permits/licenses to legally operate in Tennessee.

For further research, here are a few documents that will give you an idea of what licenses and permits you may need to obtain, and how much they are.

  • Local: county and city list of Tennessee business taxes
  • State: the Department of Revenue has a sales tax certificate
  • Federal: If any of your business activities are regulated by the federal government (e.g. transportation, agriculture, serving of alcoholic beverages, etc.), you’ll need a federal business license or permit 

You can also check the One-Stop Licensing App to see what other licenses you may need. Their total costs will vary.

Drafting Your Operating Agreement In Tennessee

Your operating agreement defines the rights, powers, duties, obligations, and liabilities of your LLC’s members between themselves and your LLC. Think of it as your company’s constitution. While you’re not required to have an operating agreement in Tennessee, it’s free to create and it’s good to have. Without one, if a legal or financial dispute ends up in court, a judge or jury will be responsible for finding a viable solution, which may not be in your LLC’s best interest—or yours, for that matter. 

Your operating agreement should include:

  • LLC member names and addresses
  • A description of your LLC's purpose, products, and services
  • Each member’s capital contributions and share of profits and losses
  • Each member’s voting rights
  • Profit distribution plans
  • LLC meeting schedules and voting procedures
  • Dissolution terms and procedures

Each of your LLC members should read over and sign your operating agreement. Once you do, you’re that much more official. 

Getting An Employee Identification Number (EIN) 

Your EIN is a nine-digit number assigned to you by the IRS and identifies your LLC for tax purposes. It’s free and essential for operating in Tennessee. You can’t hire employees, file taxes, or open your business bank account without one.

Filing Your Annual Report

Once your Tennessee LLC is up and running, you are required to file an annual report and pay a $300 filing fee if you have one to six members, and $50 for each additional member. To file your report, you need to include:

  • Legal name of your LLC
  • Your LLC’s address
  • Registered agent name and contact information
  • Name and address of your principal officers, managers, directors, and members
  • Your Federal EIN

Usually, your annual report is due by April 1st, and the Secretary of State’s office will send you a reminder in advance.

Why Start An LLC In Tennessee?

There are plenty of great reasons to start an LLC in general, but Tennessee comes with some added bonuses.

General LLC Benefits

  • Liability Protection: LLCs separate your business and personal assets. Without liability protection, your personal assets may be in jeopardy if your business assumes debt or gets sued.
  • Tax Benefits: LLCs can adopt the tax status of any other legal structure, including sole proprietorships, C corporations, and S corporations. If you don’t operate as a corporation, the IRS will designate you as a disregarded entity, which means you’ll enjoy the tax benefits of a sole proprietorship.
  • Ownership and Management Flexibility: LLCs can keep their disregarded entity designation, whether you have one owner or six, and it doesn’t matter what types of owners your LLC has. Corporate entities lack this flexibility. They’re not bound by a formal structure, unlike corporations, so you can run your business as you’d like.
  • Profit Distribution Flexibility: Corporations must distribute profits based on the number and type of shares their shareholders hold. In an LLC, profit distribution isn’t tied to ownership percentage, so you can set your own rules.

Additional Tennessee LLC Benefits

  • No citizenship requirements
  • Easy to transfer ownership
  • Ability to raise capital and build credit
  • Unlimited number of owners
  • Minimal paperwork
  • Great asset protection laws

How Much Does An LLC Cost In Tennessee?

Compared to if you start an LLC in Florida, or if you are at the LLC California costs, Tennessee can be more expensive because your filing fee and annual report are $307 and $300 respectively, plus an additional $50 per member. 

However, other aspects, such as reserving a business name, are cheaper than what an LLC Florida costs. You can also compare it with LegalZoom LLC costs to determine if the costs line up, or if you can get a discount.

Additional FAQs

Do you still have more questions about how much an LLC in Tennessee costs, or about LLCs in general? We’ve got answers!

Do You Need A Business License For Your LLC?

Both your LLC and business licenses are almost always required to run an LLC in Tennessee.

How Do You Pay Yourself From An LLC?

Paying yourself from an LLC, or taking an “owner’s draw,” is a simple process. All you need to do is transfer a portion of your organization’s cash reserve from your business account to your personal account. If you divide funds among your LLC’s partners, do so based on what you decided on in your operating agreement or via any other document you’ve read and signed.

What Is A Single-Member LLC?

A single-member LLC has only one owner, instead of two or more. Single-member LLCs often enjoy the best of both worlds regarding LLCs and sole proprietorships.

How Do You Close An LLC?

If you want to dissolve an LLC, visit the Tennessee Secretary of State’s website to file a Cease a Business Entity form. Before doing so, settle all your remaining debts, distribute any remaining assets, meet your tax obligations, and notify creditors of your dissolution.

Conclusion: How Much Does It Cost to Start A Tennessee LLC?

Ready to form a Tennessee LLC and enjoy all the fantastic benefits it has to offer? By identifying and saving how much it will cost to start and maintain your Tennessee LLC, you’re well on your way to success!

Are you ready to capitalize on that success? Check out The Lazy Man’s Guide to Living The Good Life, and discover how to optimize your chances of running a thriving business!

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About the author 

Mike Vestil

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

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