Now is a great time to launch a limited liability company (LLC) in Tennessee. In 2021, the state saw an enormous surge in new business formations, reportedly the largest to date. Between January and March alone, nearly 20,000 companies and corporations debuted. Government financial aid may have helped more people than ever decide to launch new business ventures.
Were you thinking of starting a Tennessee LLC? If so, here’s a helpful guide to take you from start to finish.
Before Starting an LLC in Tennessee
In the early stages of forming your limited liability company, there are a few crucial details you need to take care of. Please read the sections below to learn what you need to do before going ahead with your LLC formation.
Research Your LLC Business Name
Imagine filing paperwork to set up your Tennessee LLC, only to get thwarted because the name you chose is unavailable. That is why it is a great idea to check for business name availability before setting up your company. You can do so via the Name Availability Search Engine on the Secretary of State’s Division of Business Services website or by calling 615-741-2286.
Your business name must be distinguishable from the names of other business entities registered with the state. Other things to note:
- Your company name must contain the words “limited liability company” or an acceptable abbreviation, such as “LLC” or “L.L.C.”
- Companies seeking to include certain words such as “bank” or “trust” in their name must obtain permission from the Tennessee Department of Financial Institutions.
If you’ve confirmed your name is available, you can reserve it for 120 days by submitting Form SS-9425, the Application for Name Reservation. You aren’t required to reserve your name, but it can be a good idea if you aren’t planning to form your business right away. The fee is $20 and should be made payable to the Tennessee Secretary of State. The payment can be in the form of a check, cashier’s check or money order. Deliver your completed form in person or mail it to 312 Rosa L. Parks Ave. FL 6, Nashville, TN 37243.
If mailing, be sure to include the form and payment together in the same envelope and write “Tennessee Secretary of State, ATTN: Corporate Filing” above the address.
Select a Registered Agent
Tennessee LLCs must have a registered agent. The agent receives legal documents on behalf of the business and forwards them to the appropriate person at your business. You or another LLC member or employee can act as the registered agent. That said, your agent must be at least 18 and have a physical address (known as the “registered office”) within Tennessee.
You can also hire a registered agent service to act as your registered agent. Small business owners typically hire registered agent services for increased privacy and reliability or because they do business in multiple states. The annual cost is usually between $100 and $300. Remember before hiring anyone to ensure you get your money’s worth.
Filing Your LLC Paperwork
Tennessee provides multiple options for LLC filings. You can file electronically, or you can prepare Articles of Organization online using Form SS-4270, print them out and mail them to the Secretary of State’s office. You can also print a blank form, fill it out and mail it in. Tennessee charges $50 for each existing LLC member, with a minimum fee of $300 and a maximum charge of $3,000. There is also a processing fee for online filings.
Foreign LLCs can obtain authority to transact business in Tennessee by filing Form SS-4233, Application for Certificate of Authority. Fees and procedures are the same as for new Tennessee LLCs.
What To Do After Starting Your LLC in Tennessee
Once you successfully establish your Tennessee LLC, there are a few additional steps to take over the long term. These acts should help keep your company in good standing and ensure its success. There are also options for when you are ready to end your LLC for good.
Get an Employer Identification Number (EIN)
An EIN, sometimes called a federal EIN (FEIN) or federal tax identification number (FTIN), is required for most businesses. In the case of single-member LLCs, it is an excellent alternative to using one’s Social Security number, keeping it safe from exposure or potential fraud. EINs are free and available on the IRS website.
Create an LLC Operating Agreement
While not a legal requirement, an operating agreement is still essential as it lays a reliable long-term foundation for your LLC brand. These documents confirm everything from which members have the most significant say in company decisions to how profits and losses will be shared and who is responsible for the day-to-day business operation. A detailed operating agreement helps minimize disputes among members and lends legitimacy to your LLC, helping maintain its good standing.
Buy a Web Domain and Set Up Social Media
In addition to starting your LLC, you should also take the time to build an online presence for your brand. Many customers frequently do web research on companies, and a lack of online presence can negatively affect how would-be customers perceive you.
Getting a website domain and social media profile is ideal for providing a point of contact between yourself and customers. It is a worthwhile investment for your brand, as it will make it easier to spread the word about your newly launched Tennessee LLC.
Submit an Annual Report
Tennessee LLCs are required to turn in an annual report each year. To avoid getting it rejected, it must:
- Be signed and correctly dated
- Be typed up or written in ink
The annual report must be accompanied by a filing fee of $300 for LLCs with up to six members, and another $50 for each additional member, up to a maximum fee of $3,000. There’s an additional $20 fee if your LLC changes its registered agent. Be sure to stay on top of your annual report, as this is essential for keeping your business entity in good standing in Tennessee.
By following the above series of steps, you should get your LLC in Tennessee and avoid wasting time and money. As thousands of new businesses debut in the “Volunteer State,” we hope this guide puts you on the road to join them.
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