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by Mike Vestil 

Starting An LLC In Tennessee: Step By Step Guide

Are you looking to start an LLC in Tennessee? This blog post will provide all the information you need to get started, such as the different types of LLCs available in Tennessee and the documents you must file. I’ll also provide tips on choosing a business name for your LLC and other key considerations when setting up your business.

Step-By-Step Guide To Forming And Maintaining An LLC In Tennessee

Here are the main steps to make sure that your LLC is set up correctly, so you can get your business up and running quickly:

  • Submit Articles of Organization to the Secretary of State – The first step is to submit your Articles of Organization at the Secretary of State's website for around $300. You'll need to fill out a form with information about your company, such as its name, address, purpose, and more. Once you've submitted the form, you should receive confirmation that your LLC has been formed within ten days.
  • File Annual Reports – All existing LLCs must file annual reports with fees ranging between $300 and $3000, depending on how much revenue they generate annually. You also have to pay an additional fee if you don't submit your report within four months after closing out your fiscal year. Your message must include details about any changes in ownership or management and financial information, including income and expenses.
  • Manage Your LLC – Finally, you need to manage your LLC by following all applicable laws and regulations and filing all necessary paperwork when required. Staying up-to-date on changing rules ensures your business complies with local codes. Additionally, regularly review financial statements and ensure all taxes are paid on time so there are no surprises down the road.

Researching Potential Names

If you are starting an LLC in Tennessee, filing for a name reservation is the first step. This form allows applicants to reserve the word(s) they want to use for their business entity before filing its articles of organization. With this form, you can ensure that your business will only try to use your desired name once you get the chance! Submitting this form only costs $20.

Before filing Form SS-9425 (Application for Name Reservation), research potential names. The Division of Business Services website has helpful search tools for parties and entities (e.g., corporations and LLCs). It's important to note that if your company shares similar characteristics, such as services or products, with another business, it can claim ownership over that name even if it never officially registered it as its own. It's not enough to search within Tennessee; it's also essential to check other states.

Using Words That Require Additional Approval

Tennessee restricts certain words from being used without prior approval from the Department of Financial Institutions. These include terms such as "bank," "attorney," "university," or any other time which implies a specific type of professional service or expertise. If you use any of these words in your LLC name, apply for permission first. Otherwise, your application will be denied until the state government approves.

DBA

This form is perfect if you want a "Doing Business As" (DBA) name. This form is just as simple and affordable as reserving a name - just $20! Filing this application will allow applicants to register their chosen assumed name with the State while establishing that they are conducting business under the required legal standards.

Certified document copies are great if you need verification documents from any office within the Tennessee Secretary of State offices. These documents will come with raised seals and signatures from authorized personnel, proving that these documents are legitimate copies of original records on file with the state office. You guessed it - certified document copies also cost only $20!

Finally, if you need evidence that your LLC is legally recognized in good standing with all regulations set by the State of Tennessee, then ordering yourself one beneficial Certificate Of Good Standing will do precisely that! This certificate verifies that your entity exists and is approved by relevant authorities; it also proves that all taxes associated with your business have been paid up-to-date.

Filing Form SS-9425: Application For Name Reservation

Once you have researched potential names and determined which words require additional approval (if applicable), you can file Form SS-9425: Application For Name Reservation with the TN Secretary of State. This form will reserve a name as an option within 120 days.

Remember that this is only a temporary solution; your reservation will expire if you don't file Articles Of Organization within those 120 days.

The Consequences Of Failing To Pay Your Filing Fees When Forming An LLC In Tennessee

Ensuring all the paperwork is in order is essential when forming an LLC in Tennessee. One of the most critical requirements for successful registration is paying your filing fees. The Secretary of State will reject the Articles of Organization if those fees are unpaid.

Filing Fees Are Required For Legal Reasons

Fees must be paid for several legal reasons when forming an LLC in Tennessee. These fees help cover the cost of processing and reviewing your Articles of Organization and any other document requests you may have submitted to the Secretary of State. Filing fees also help fund state agencies that provide consumer protection services and ensure compliance with regulations set forth by state laws. It's important to remember that these filing fees do not guarantee that your LLC will be accepted—they pay for processing, review, and other services associated with registering your business with the state government.

The Consequences Of Not Paying Your Filing Fees

There can be severe consequences if you fail to pay your filing fees when registering an LLC in Tennessee. In addition to having your Articles of Organization rejected by the Secretary of State, you may also face fines or even criminal charges if it's determined that you intentionally failed to pay these fees. Furthermore, not paying your filing fees means that you won't have access to any benefits associated with personal asset protection through a limited liability corporation—including things like limiting potential losses from business debts or shielding personal assets from lawsuits arising out of business activities—leaving yourself vulnerable to financial loss due to claims against your company or its assets.

The Benefits Of Hiring A Registered Agent In Tennessee

A registered agent is an individual or business entity that acts as the designated point of contact for a company's legal documents, including service of process and other important notices. By law, most states require businesses to establish a registered agent within their borders who is authorized to receive legal paperwork on behalf of the company.

Registered agents are essential because they provide a reliable way for your business to receive documents from the state government, like tax documents and other important papers. They also ensure that any paperwork sent to the government can be tracked easily by providing confirmation numbers and additional information when it is sent out. Additionally, having a registered agent means you won't have to worry about missing important filing deadlines due to postal delays or misdirected mail.

Understanding The Costs Of Starting An LLC In Tennessee

Here's all you need to know about fees and taxes.

Minimum Annual Payment

When forming an LLC in Tennessee, all entities must make a minimum annual payment of $100. Additionally, depending on your net worth or tangible property in the State, you may be required to pay rates up to 0.25%. It's important to note that these payments must be made yearly regardless of whether your entity is operating at a profit or loss.

Excise Tax

Another cost entrepreneurs must consider when doing business in Tennessee is the excise tax. This tax is applicable based on the taxable income made within the State's boundaries; it's currently set at 6.5%. Businesses should also remember that they will likely owe federal and State taxes depending on their operations and location.

Application For Certificate Of Authority (Form SS-4233)

When forming a Foreign LLC (one created outside of Tennessee), filing an Application for Certificate of Authority (Form SS-4233) will be necessary, with fees ranging from $300 -$3,000 per member. Additionally, securing any permits/licenses required at federal, state & local levels dependent on industry and location may also be necessary when starting up an LLC in Tennessee.

Filing Fees

The filing fee for forming a Tennessee LLC is based on the total number of members in your company, ranging from $307 for one member to $3000 for 21 or more members. It's important to note that this fee does not include other expenses necessary to register your business, such as reserving your business name ($20) or obtaining a local business license ($15).

Taxes

In addition to filing fees, you must pay annual minimum taxes per location of at least $22. This cost is separate from any state income tax payment you may have to make depending on the size and nature of your business. Other potential taxes include payroll, sales, use, and franchise and excise taxes, depending on where your business is located and what services you offer. Before starting your business, research any applicable state or local taxes to understand your financial obligations moving forward.

Additional Expenses

Finally, other expenses come with forming an LLC, such as legal fees (for seeking professional advice), accounting fees (for keeping track of finances), and insurance policies (to cover yourself against risk). Depending on the nature and size of your company, these costs can vary significantly, but it's important to factor them into your budgeting when starting an LLC in Tennessee.

Requirements For LLCs

In Tennessee, all LLCs must have a registered agent over 18 with a physical address within the State. The registered agent will receive important documents, such as legal notices and tax forms for your business. You can outsource this service for roughly $100-$300 annually. Prospective entrepreneurs must also electronically or mail file their Articles of Organization and incur fees ranging from $300 to up to $3,000 plus a processing fee (for online filings).

Foreign LLCs are also welcome in Tennessee - fill out Form SS-4233 and use the same filing procedures as those creating new entities! All business owners must research before beginning any paperwork to understand the requirements for writing their respective businesses. Additionally, all companies must register with the Department of Revenue for taxes, including registering for sales tax permits if applicable.

It is also essential that prospective business owners understand the specific legal requirements associated with forming an LLC to stay compliant with local laws and regulations. One of these requirements includes holding annual meetings where shareholders can elect board members and review financial reports, among other topics related to running a successful business. Business owners should always consult an attorney if they have questions about how best to proceed when setting up their company and staying compliant with local laws and regulations.

An Important Step: Get An EIN From The IRS

One of the first things you must do is get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is a unique identifier for your single-member LLC and will be used for filing taxes and applying for loans or grants.

Draft Up An Operating Agreement

Creating an operating agreement is essential when setting up an LLC. This document outlines how your business will be managed, including how decisions will be made, how profits will be distributed, and who owns what percentage of the company.

Establish Your Brand Online

Once you have completed all the necessary paperwork and documentation, it's time to focus on establishing your brand online. One way to do this is by buying a domain name; this will give customers easy access to your website and help them find you more easily online. Investing in social media profiles is also important; having a presence on platforms like Facebook and Twitter will allow people to interact with your business directly and increase brand recognition.

Staying Up-To-Date With Your Annual Reports As An LLC In Tennessee

Starting an LLC in Tennessee can be a great way to benefit from the advantages of limited liability and give your business a professional presence.

Your LLC must be filed annually to remain legally registered and active with the State. An Annual Report is essentially an update on certain aspects of your business, such as ownership and contact information. The exact details outlined in this report will vary from State to State but generally include information such as names of members/managers, addresses and contact details of registered agents or members/managers, number of members/managers, etc.

For LLCs with six members or fewer, a fee of $300 applies when you submit your annual report; every member after that will cost an additional $50. It is also worth noting that should you change your registered agent at any point during the year; there will be an extra charge of $20 – so double-check all details before submitting! That being said, there are some situations where it may be necessary to switch agents – if they no longer wish to act as one, for example – so make sure you're aware of the fees that may apply before making any changes.

Selecting Business Management Type

When registering your LLC, you must decide how your company will be managed. When submitting Articles of Organization, you must choose between member-managed or manager-managed operations (Form ss-4223). This type of management dictates who will have decision-making authority within the company and how those decisions are made. It is essential to carefully consider which type of management best suits your company before making any decisions.

Conclusion

Forming an LLC in Tennessee can be a complex process that requires you to consider filing fees, taxes, and additional expenses. Researching all applicable regulations before starting your business is essential to fully understand the financial obligations of creating an LLC in this State.

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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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