How to Start an LLC in Tennessee (A Step-by-Step)

If you’re considering forming a Tennessee LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.

To establish your LLC successfully, you must choose a unique business name, designate a registered agent, and file Tennessee LLC Articles of Organization.

But there’s more.

Filing your Articles of Organization in Tennessee costs about $50 per member, with a minimum of $300 and a maximum of $3000. Your LLC is approved immediately if you file online, and it takes three to five business days if you file by mail.

This guide compiles all the information you need to start an LLC in Tennessee today.

What Are the Steps to Start an LLC in Tennessee?

To start an LLC in Tennessee, you need to:

• Step 1. Search and choose a unique name for your Tennessee LLC
• Step 2. Choose a registered agent in Tennessee
• Step 3. File Tennessee LLC Articles of Organization
• Step 4. Create an Operating Agreement
• Step 5. Get an EIN from the IRS
• Step 6. File a BOI Report
• Step 7. Registration and licensing for your LLC
• Step 8. Pay Tennessee franchise and excise Tax
• Step 9. File annual reports

Let us dive more in-depth into these steps so I can show you how to get them:

Step 1: Search and Choose a Unique Name for Your Tennessee LLC

Choosing the right name for your LLC is essential. Your name must be different from any other registered business in Tennessee.

Use the Tennessee business name availability tool to check if your desired name is available.

Your name must include “Limited Liability Company,” “LLC,” or “L.L.C.” Avoid names that sound like government agencies, such as “FBI” or “IRS.” You’ll need extra permissions if you use certain words, such as “attorney” or “university. “

Once you find an available name, you should secure it by filing an Application for Name Reservation. This application costs $20 and can only be done by mail or in person. This reservation holds your name for four months.

Consider having a trade name or a “doing business as” (DBA) name. This allows you to operate under a different name if desired.

Consider reserving a domain name for your LLC early. Even if you don’t plan to build a website immediately, it’s wise to lock in a URL.

Lastly, you may want to trademark your business name or logo. Start by checking Tennessee’s trademark database to protect your brand locally before considering national trademarks for broader protection.

Step 2: Designate a Registered Agent in Tennessee

In Tennessee, a registered agent is a person or business that acts as your business’s official contact for your LLC. They receive critical legal documents, tax notices, and other official mail.

Having a registered agent helps your LLC stay compliant with state laws. It protects your privacy, too, as legal notices won’t be sent to your address. This setup helps you focus on running your business without interruptions.

Selecting the right registered agent ensures your LLC operates smoothly and legally in Tennessee.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agent provider in Tennessee:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for Tennessee Registered Agents

Tennessee law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What registered agents do I recommend for Tennessee?

I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.

Step 3: File Tennessee LLC Articles of Organization

To start your LLC in Tennessee, you must file the Articles of Organization. This document officially registers your business with the state and includes essential details such as your LLC’s name, address, registered agent, and members’ or managers’ names.

To file your Articles of Organization in Tennessee, follow these steps:

Step #1. Complete the Form: Obtain and complete the Articles of Organization form from the Tennessee Secretary of State website.

When completing the Articles of Organization, you will need to provide:

• LLC Name: The official name of your business.
• Address: The principal office location in Tennessee.
• Number of Members: The total count of LLC owners.
• Registered Agent: The name and address of the person or service you’ll designate to receive legal documents.
• Effective Date: When you want your LLC to start differs from the filing date.
• Business Details: A brief description of what your LLC will do.
• Duration: Indicate if your LLC will continue indefinitely or if it has a set end date.

Step #2: File Online, by Mail or in person: You can file your Articles of Organization online through the state’s online filing system or by mailing the completed form to:

Secretary of State’s office at 6th FL – Snodgrass Tower
ATTN: Corporate Filing312
Rosa L. Parks AVE
Nashville, TN 37243 

You can also file in person at:

Secretary of State Business Services Division
6th FL – Snodgrass Tower
312 Rosa L. Parks AVE
Nashville, TN 37243

Step #3: Pay the Filing Fee: The filing fee for the Articles of Organization is $50 for each member of the LLC. The total cost cannot be less than $300 or more than $3,000. For online filing, you can use a credit card; for mail or in-person submissions, use a check or money order.

Once your articles are filed, the state will review and approve them. This process usually takes a few business days. After approval, your LLC is officially recognized, and you can start your business activities, obtain your EIN, open a bank account, etc.

Step 4: Prepare an Operating Agreement for your TN LLC

An operating agreement is a crucial document for your Tennessee LLC. It outlines how your company will run. Although the state does not require this internal document, it is highly recommended.

Having an operating agreement helps to clarify roles and responsibilities among members. It can cover important details like:

• Ownership Structure: Listing all members and their ownership percentages.
• Management Roles: Specify who will manage the LLC. This can be member-managed or manager-managed.
• Voting Rights: Define how decisions will be made. Will all members have equal votes?
• Profit Distribution: Explain how profits and losses will be shared among members.
• Meeting Procedures: Outline how often meetings will occur and how members will be notified.
• Amendment Process: Describe how changes can be made to the agreement in the future.

Creating an operating agreement may feel complex, but it’s essential for clarity.

It serves as your LLC’s rulebook, guiding operations and avoiding conflicts down the line. Keeping everyone on the same page is even more vital if you have partners.

Step 5: Obtain an EIN for Your LLC

An EIN, or Employer Identification Number, is a unique number the IRS assigns. Your Tennessee LLC must conduct various business activities.

You will need an EIN to:

• Open a business banking account
• Apply for a business line of credit
• Obtain certain permits
• Make contracts with wholesale vendors

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within 1-2 weeks.

Step 6: File a BOI Report

After forming your LLC in Tennessee, you must file a BOI (Beneficial Ownership Information) Report. This report is required by the Financial Crimes Enforcement Network (FinCEN).

Who Should File?

If your LLC is not exempt, you must file a BOI report. Exempt entities generally include larger businesses and certain government bodies.

When to File:

• Companies created before January 1, 2024, have until January 1, 2025.
• New companies formed between January 1, 2024, and January 1, 2025, must file within 90 days.
• LLCs formed after January 1, 2025, must report within 30 days.

How to File:

• Visit the FinCEN BOIR e-filing page.
• Choose from the options available:
  • Initial Report
  • Correct Prior Report
  • Update Prior Report
  • Newly Exempt Entity
• Select “Initial Report” for new filings and click NEXT.

Information Needed:

• Business Name and Address: Your LLC’s official name and primary location.
• Owner Information: Names, addresses, and dates of birth for each beneficial owner.
• Identification Numbers: This could include Social Security numbers or tax ID numbers.

Provide accurate and complete information to avoid delays. Filing this report is a legal requirement and helps maintain transparency in business operations.

Step 7: Registration and Licensing for your TN LLC

To legally operate your LLC in Tennessee, you must register for business tax and obtain the necessary licenses. Here’s how to do it.

If your LLC qualifies, you must register to pay the state business tax. You can do this electronically through the Tennessee Taxpayer Access Point (TNTAP).

This business tax is based on your gross receipts. It is required annually, with a due date on the 15th day of the fourth month after your fiscal year ends.

When registering, you must pay your county or municipal clerk a $15 business license fee.

Once you register for business tax, don’t hesitate to get in touch with the individual county and/or municipal clerk to arrange to pay the $15 business license fee and obtain your license.

It can take up to 10 business days for the Department of Revenue to process your business registration.

Types of Licenses:

• Minimal Activity License: Required if gross receipts are between $3,000 and $100,000.
• Standard Business License: Needed if gross receipts are $100,000 or more.

Operating without the necessary license is not allowed.

If you operate from out of state and do business in Tennessee, you must register for business tax if your receipts total $100,000 or more. You won’t need a local business license in this case.

Make sure your licenses are posted at your business location once obtained.

If your LLC may be exempt from business tax, check using the Department of Revenue‘s Business Tax Manual.

Step 8: Pay Tennessee Franchise and Excise Tax

As an LLC in Tennessee, you must pay an annual franchise tax. This tax helps fund state activities and services.

The franchise tax is based on the net worth or book value of the tangible personal property and real property the LLC owns, whichever is higher. The excise tax is based on net earnings for the tax year (income tax).

Tennessee’s franchise and excise tax is 0.25% of the higher amount between your LLC’s net worth or the value of real and tangible property in the state.

The minimum franchise and excise tax is $100 if you are registered through the Secretary of State to do business in Tennessee, even if the company is inactive.

It’s essential to pay your taxes on time. Late payments can lead to penalties and interest fees. Make sure to note the due date on your calendar!

Step 9: File Annual Report for your Tennessee LLC

Every Tennessee LLC must file an Annual Report each year. This report is vital for keeping your business in good standing with the state.

Your Annual Report fee is based on the number of members in your LLC and costs $50 per member:

• 1 to 6 members: $300
• More than six members: $300 plus $50 for each additional member.
  For example:
  • 7 members = $350
  • 10 members = $500

The minimum fee for an annual report is $300, and the maximum is $3000.

The Annual Report is due on the first day of the fourth month after your LLC’s fiscal year ends. Most LLCs use January 1 to December 31 as their fiscal year, so the deadline is April 1.

If your LLC is approved in February 2024, your first Annual Report will be due by April 1, 2025.

You can file your annual report online or by mail.

Please remember that changing your registered agent will incur a $20 fee.

Staying on top of this annual requirement is essential to maintain your LLC’s good standing in Tennessee.

What are the Different Methods To Start a Tennessee LLC?

You can start your Tennessee LLC through several methods. Each method has its steps, benefits, and drawbacks.

Here’s a brief look at your options.

DIY LLC Formation in Tennessee

Forming an LLC by yourself is a straightforward option. You will fill out and submit the Tennessee LLC Articles of Organization and pay the required filing fee.

All by yourself, no third party!

Pros:

• Cost-Effective: You save money by not hiring anyone.
• Control: You have complete oversight of each step.
• Learning Opportunity: You gain knowledge about the process.

Cons:

• Time-Consuming: It may take longer if you are unfamiliar with the process.
• Complexity: You must ensure all forms are correctly filled out.
• Privacy issue: If you serve as your registered agent, you risk having your address out there.
• Lack of Guidance: You might miss the necessary steps.

Using a Professional/Online LLC Formation Services

Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.

Pros:

• Convenient: They manage the filing, saving you time.
• User-Friendly: Most platforms have easy-to-understand instructions.
• Support Available: Many offer customer service for questions.
• Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised

Cons:

• Costs: You’ll pay a service fee.
• Variable Quality: Some services may not be as reliable as others.

Hiring an Attorney

Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.

Pros:

• Expertise: An attorney knows the legal requirements and can avoid pitfalls.
• Customization: Your LLC can be tailored to your specific business needs.
• Support with Complex Situations: Ideal for businesses with unique circumstances.

Cons:

• Higher Costs: Legal fees can be expensive.
• Dependence on Others: You may rely heavily on the attorney’s schedule.
• Potential Delays: The process may take longer due to attorney workloads.

What is The Cheapest Alternative Way to Form an LLC in Tennessee?

If you want to start an LLC in Tennessee on a budget, the most affordable option is to do it online. By filing the Articles of Organization directly with the Tennessee Secretary of State, you can keep costs between $300 and $150, depending on the number of members.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services in Tennessee?

There are a myriad of Tennessee LLC services from which to choose. Choosing the wrong one can affect your Tennessee LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best Tennessee LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for 1 year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Northwest Registered Agent stands out in Tennessee LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.

How Much Does It Cost To Form an LLC in Tennessee?

Forming an LLC in Tennessee involves several costs. The main expense is the filing fee for the Articles of Organization. This costs $50 per member with a minimum of a $300 fee.

Here’s a breakdown of the entire Tennessee LLC costs:

Requirement	Cost
New LLC Filing Fee (Articles of Organization)	$300 – $3000
Name Reservation (optional)	$20
LLC Formation Service (optional)	$39 (via Northwest)
Registered Agent Fee (optional)	$0 (via Northwest)
Business license	$15
Franchise and Excise Tax	From $100
Annual report fee	$300 – $3000
Total Estimated Cost	$715 – $6170

When forming a new company in TN, it is ideal to budget about $715-$6170 for the first year. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.

The most significant (and essential) expense for every Tennessee business owner is filing the Articles of Organization, which costs $300 – $3000.

Pros and Cons of Forming an LLC in Tennessee

6 Important Things To Do After Creating Your Tennessee LLC

After forming your Tennessee LLC, you should take several key steps to ensure your business runs smoothly. These actions will help you stay compliant and prepare your business for success.

1. Research the Best Licenses and Permits for Your Business

Depending on its industry, every business in Tennessee may need specific licenses or permits. Start by identifying the specific requirements for your LLC.

Visit the Tennessee Department of Commerce and Insurance website or your local county clerk’s office.

Common licenses include:

• Business License
• Sales tax permit
• Professional licenses (if applicable)

Apply for all necessary permits before starting operations to avoid fines or business interruptions.

2. Create Business Accounts for Your Tennessee LLC

Opening a separate bank account for your LLC is essential for keeping your business finances organized and distinct from your funds.

This separation simplifies your accounting and helps safeguard your assets by clearly distinguishing between personal and business transactions.

When choosing a bank, look for one that offers business-friendly services, such as waived fees, free online banking, and other features that can benefit your business. To open the account, be prepared to provide your EIN and a copy of your Articles of Organization.

3. Understanding Tennessee Tax Requirements and Managing Your Taxes

As a business owner, you must be aware of various tax obligations. In Tennessee, you’ll need to pay:

• Franchise and excise taxes
• Sales tax (if applicable)

Filing deadlines are essential to avoid penalties. Keep track of your income and expenses throughout the year.

4. File Your Annual Report

All LLCs must file an annual report with the Secretary of State in Tennessee. This report verifies that your LLC is active and provides updated business information.

The minimum fee for an annual report is $300, and the maximum is $3000.

The Annual Report is due on the first day of the fourth month after your LLC’s fiscal year ends. Most LLCs use January 1 to December 31 as their fiscal year, so the deadline is April 1.

You can file your annual report online or by mail.

Please remember that changing your registered agent will incur a $20 fee.

5. Get Business Insurance for an LLC

Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities. Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.

Your insurance needs will vary based on your business operations.

For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

6. Setup Your Business Online Presence (optional)

In today’s digital age, online presence is vital for most businesses. To enhance visibility, consider creating a professional website and social media profiles.

When designing your website, ensure it includes:

• Contact information
• Business services and products
• Customer testimonials

Search engine optimization (SEO) can help potential customers find your site easily. This optional step can significantly boost your marketing efforts.

Consider using social media to engage your audience. Platforms like Facebook, Instagram, and LinkedIn can enhance your visibility.

Tennessee LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

When starting a business in Tennessee, you have several structure options. Each has its own set of characteristics. Choose the structure that best suits your business goals and needs.

Sole Proprietorship

A Tennessee sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.

However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk.

It’s easy to set up and manage, but it does leave you personally responsible for any business debts.

Partnership

A Tennessee partnership involves teaming up with one or more people to run a business together.

Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.

However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too.

Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.

LLC (Limited Liability Company)

An LLC offers a blend of flexibility and protection.

Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.

LLCs are more formal than sole proprietorships or partnerships but offer management and tax treatment flexibility. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.

S-Corporation

An S Corporation is a more structured business form.

Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.

This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.

Corporation

A Tennessee corporation is the most complex structure, suitable for larger businesses aiming for significant growth. Imagine a big company with many shareholders.

A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.

Corporations can raise capital more efficiently by issuing stock and can offer employee benefits.

However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.

My Final Thoughts: Forming an LLC in Tennessee

Starting an LLC in Tennessee involves several key steps:

• Choose a Name for your LLC.
• Select a Registered Agent to handle legal documents.
• Submit the Articles of Organization to the state.
• Create an Operating Agreement to outline ownership and management.
• Obtain an EIN from the IRS for tax purposes.
• File your BOI Report as mandated by the state.
• Obtain registration and licensing for your TN LLC
• Pay franchise and excise tax to the Department of Revenue
• File an annual report to maintain compliance

The filing fee for the Articles of Organization is $50 per member, with a minimum fee of $300 and a maximum fee of $3000.

After forming your LLC, prepare for annual reports, which cost $50 for every member, with a minimum fee of $300 and a maximum fee of $3000 yearly.

Forming an LLC may be one of the best decisions for your business in Tennessee. It can provide you with personal liability protection and help establish credibility.

Following the outlined steps, you can set up your LLC confidently and focus on what matters most—growing your business.

Learn More About Starting an LLC in Tennessee

If you need additional help to start an LLC in Tennessee, check out these valuable resources:

Frequently Asked Questions

Can I change my registered agent in Tennessee?

Yes, you can change your registered agent in Tennessee. To do so, you must submit a form to the Secretary of State to officially update your registered agent’s information.

How do I change my Tennessee LLC’s name?

You must submit a name change amendment to the Secretary of State to change your LLC’s name. Include the new name and any required fees when filing.

How do I renew my Tennessee LLC?

In Tennessee, you renew your LLC by filing an annual report. This report is due each year by the first day of the fourth month after the end of your fiscal year.

How do I dissolve an LLC in Tennessee?

To dissolve your LLC, you must file a Certificate of Termination with the Secretary of State. Make sure all obligations, such as taxes and debts, are settled before doing so.

How do I add a member to a Tennessee LLC?

To add a member, you must update your operating agreement to reflect the new member’s details. You may also need to notify the Secretary of State if your formation documents require it.

How do I add a DBA to an LLC in Tennessee?

To add a “doing business as” (DBA) name, apply with the county clerk’s office in the county where your LLC operates. There may be a small fee involved.

Can a minor own an LLC in Tennessee?

Yes, a minor can own an LLC in Tennessee, but they may require a custodian or adult to manage the LLC until they reach the age of majority.

When is the Tennessee Annual Report due?

The annual report for your LLC in Tennessee is due by the first day of the fourth month after your LLC’s fiscal year ends. Missing the deadline can result in penalties.

Does LLC expire in Tennessee?

An LLC does not expire in Tennessee as long as it complies with state regulations. It must file annual reports and pay necessary fees to maintain its active status.

Can a non-resident open an LLC in Tennessee?

Yes, a non-resident can open an LLC in Tennessee. You will need a registered agent with a Tennessee address to receive official documents for your LLC.

Can I buy a house or car with my LLC in Tennessee?

Yes, your LLC can buy property, including houses and cars. This can provide liability protection and potential tax advantages for your business.

Can you have multiple businesses under one LLC in Tennessee?

You may operate multiple businesses under one LLC, but it’s generally advisable to consider forming separate LLCs for each business. This can help protect assets and limit liability.

Is Tennessee an excellent state to form an LLC? Is it worth it?

Tennessee offers a business-friendly environment with relatively low fees and straightforward regulations. This makes it an attractive state for forming an LLC, especially if you plan to operate locally.

Can one person form an LLC in Tennessee?

Yes, one person can form an LLC in Tennessee. This is known as a single-member LLC, allowing you to operate your business by yourself while still enjoying liability protection.