- A Limited Liability Company is a better option for entrepreneurs who want low risks and good benefits. This business entity has lower taxes, personal liability protection, credibility, inexpensive formation, and more. All these advantages make this type of business better than others.
- Nowadays, creating an LLC has become convenient because of online services. If you want to start an LLC in Tennessee, you have to follow some steps carefully.
- The overall process of forming an LLC is not challenging as it looks. It doesn't matter, even if someone is doing it for the first time. Everything is straightforward to follow.
- The rules and regulations controlling limited liability companies might vary according to the place. There are some similarities between them. However, they are not entirely similar to each other. Getting basic knowledge about the rules and regulations is always better than starting the process without them. You might save yourself from some problems and issues.
- An LLC can provide many advantages that a regular company wouldn't. The cost of an LLC in Tennessee is also minimal. It is not like any other corporation. So, it is a good idea to form an LLC in Tennessee. But first, it is essential to know how to start an LLC in Tennessee.
Starting an LLC in Tennessee is an excellent opportunity for entrepreneurs. Some business owners seek those options that are not too risky. This entity type is best for people who want stable earnings and don't want many risks.
If you get an LLC in Tennessee, you might also save a lot on taxes. An LLC includes more than one member. So, the tax gets divided separately. Each member will pay their tax according to the profits they have made. Apart from that, there is no federal corporate tax that this company needs to pay. That is how it is beneficial to have a limited liability company.
The members of an LLC in Tennessee have to accept some terms and conditions and follow them as long as it is not dissolved. Everyone should understand that a limited liability company will dissolve itself if a member passes away. It won't happen in the case when an individual leaves it. However, in both circumstances, you can continue being a part of the company by completing the creation process again.
The procedure of starting a business is always a challenging thing, especially for people who are new to the industry. In such a situation, an LLC is the best option you can select. The most significant thing to learn is how to get an LLC in Tennessee.
A Tennessee LLC has different steps and rules in comparison to other places. You must gain enough knowledge to avoid problems and issues later. It is the best way to begin everything. Also, don't forget to prepare all the documents before starting the procedure. You can get all the details from a professional.
Many people usually experience problems when they don't complete some documentation and do everything in haste. You must take every step carefully if you don't want to face them. There will be a detailed check of all the documents you have submitted for forming an LLC.
What Steps Should You Follow To Start An LLC In Tennessee?
As mentioned before, forming an LLC in Tennessee is straightforward. Tennessee is one of the best places for starting this business. The profitability will also be excellent if you focus on creatively improving your business. The following steps will help you comprehend the entire procedure in detail.
Hiring a professional is also significant when it comes to starting an LLC. They will help you complete every step of the procedure and guide you in many ways. You can also get more details, like how much it costs to start an LLC in Tennessee. But ultimately, it depends on you whether to hire them or not. You can also do it with your knowledge.
Choose A Name For Tennessee LLC
The first step is finding a credible name for an LLC in Tennessee. You must keep some things in your mind before deciding on any particular one. Here are some requirements of the title that every Limited Liability Company needs to fulfill.
- The name must include the abbreviation L.L.C. or LLC. You can also use the whole term Limited Liability Company. It should be apparent to the users that they are getting the services from an LLC, not a corporate one.
- The title of the company should be unique. It means that you cannot copy any existing business name. After deciding on one, you can search for it on the Secretary of State's website. If the term exists, it will be there. If it doesn't, you can use that name for registration. You can take inspiration from other businesses if you don't have any ideas.
- Any government agency term is not suitable for naming an LLC in Tennessee. It is prohibited to use such words—for example, State Department, FBI, CIA, etc.
- You must not include words like lawyer, bank, union, or more. In case you want any terms, you have to do some extra paperwork and documentation. You can still get it. But everything should be in place.
- If you want a website for your Tennessee LLC, you must check if a similar URL is available. You can choose a name accordingly. It is better to get the domain before starting anything. It is a more safe and more secure method.
- You can also reserve the name you have decided in advance. People do this because they think it is a bit riskier not to secure it initially. All you have to do is fill out a form and pay a fee to the State Authority. The reservation will last for four months. So, you need to take care of this thing.
Get a Registered Agent
The next step is straightforward, but you have to be careful. A registered agent is responsible for receiving all the necessary documents for creating an LLC. Apart from that, this individual will also provide you with the service you need for the process. You will get many options when choosing a registered agent. It can also be your employee. Also, it is possible to become a registered agent yourself. Still, you need to decide after considering the following things-
- The agent should be reliable enough to provide you with the services.
- The agent should have an address in Tennessee.
- The agent must be available on the working days and hours to receive the documents and complete all the tasks on time.
- The agent should have some credible experience. Otherwise, it is not safe to choose them.
- To become an agent, you must have the required knowledge. The same thing goes if you want to make an employee your agent.
Complete And File The Articles Of Organization
The Articles of Organisation is one of the most vital documents in the entire process. The creation of an LLC in Tennessee will be incomplete without it. This document will include the details about your Limited Liability Company. To prepare the Articles of Organization, you need to fill out some crucial information-
- The name of your LLC should be present.
- You can also specify your company's designation if it is a professional one.
- An official document that shows your LLC is different from the company with a similar name. Even if you use the same title, you can send the necessary information.
- The name of your registered agent and their address.
- The principal office's address is necessary to mention.
- The original date of filing the Articles of Organization.
- A statement that provides some information about your company's objectives. Like, why did you form an LLC in Tennessee?
- The management structure of your company. For instance, will managers have a role in management or not?
- You must select your company's designation and write it down on the form.
- The signature of the individual who is creating the company must be there.
The form is available online, and you can submit it by email after adding all the required details. Once the Secretary of State reviews the same and approves the document, your Tennessee LLC will become legal. You have to be extra careful when filling out the form.
Get A Certificate From The State
After everything is confirmed, you will receive a certificate from the state. The procedure usually takes a few days or weeks. This certificate will prove that you have a legal and approved LLC in Tennessee.
All the documents that you have submitted to the authority should be credible. Otherwise, you will never reach this step. You have to prepare for this thing a bit earlier because people sometimes make mistakes during the process.
After getting this certificate, you can apply for an Employer Identification Number (EIN). There are some other business licenses that you might need in the future. You can also use the certificate to receive them.
Make An Operating Agreement
The next step in the process is not mandatory. However, if you complete it, you can get benefits for your business. An operating agreement includes all the information about how you will run the business.
Many conflicts and disputes arise when running a business. An operating agreement is the best document to save you from getting into difficult situations. The courts always look for evidence and legal documents. That is why you need to create this one to protect your LLC from any problems.
An operating agreement must contain the following details-
- Name of the LLC and its address
- The total duration of the company
- Registered agent's name and address
- Objective and purpose of the business
- Management structure
- Process of adding new members and existing ones
Apply For An Employer Identification Number
You can reach the IRS to get your LLC's Employer Identification Number. It is crucial to get an EIN. The IRS will recognize your LLC through this number. There are other reasons as well to get it. You can open a bank account by showing the EIN and hiring employees. The best way to reach the Internal Revenue Service is to send the documents through mail. They will revert when they review them. If there are any problems and issues, the process might get delayed. So, you have to be aware of the consequences.
Other Final Steps
You have to do some basic things at the end of the process. They are as follows-
- Make an annual report: You have to make a yearly report to mention all the important stuff.
- Pay taxes quarterly: Every LLC in Tennessee should pay its taxes quarterly to the Department of Revenue.
- Register your LLC: You must register your company with the state's tax agency to avoid any risks regarding tax payments.
- Prepare all the necessary licenses: You must prepare the required licenses for your company if you haven't done it yet.
- Get a credit card: A credit card will significantly help run a business.
- Open a bank account: You should open a business account for the transactions.
Starting an LLC in Tennessee needs some guidance, and you are all done. All the steps mentioned in the article are straightforward to understand. You can also hire a professional if you feel that it is a challenging task. Some beginners prefer getting help from an expert rather than doing the procedure themselves. But still, it is not impossible to get an LLC in Tennessee without anyone's help.
One thing that you should focus on is carefully preparing and submitting crucial documents. The process will only get delayed if you have done any irresponsible thing regarding documentation.
Learn more with us
- How to start an LLC in Missouri?
- How to start an LLC in Indiana?
- How to start an LLC in Wisconsin?
- How to start an LLC in Virginia?
Access our Guides.
We can help!
At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
We can help you get an LLC in Tennessee with the proper guidance. If you are doing it for the first time, we will prevent you from making mistakes in the procedure. Learn more.
Like our content?
Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for early-stage founders to navigate through their start-up journeys.
Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.