A limited liability corporation (LLC) is a legal entity used to organize a business. It combines a corporation’s restricted liability with a partnership’s or sole proprietorship’s flexibility and absence of formality. An LLC should be considered by every business owner who wants to restrict his or her personal liability for business debts and litigation.
In Tennessee, forming an LLC is simple. Simply follow the instructions below to get started.
Look into the name of your LLC
Imagine submitting papers to form your Tennessee LLC only to be told that the name you selected is not available. That is why checking for business name availability before forming your firm is a good idea. You can do so via the Secretary of State’s Division of Business Services’ Name Availability Search Engine or by calling 615-741-2286.
Your company name must be distinct from the names of other companies registered with the state.
You can reserve your name for 120 days by filing Form SS-9425, the Application for Name Reservation, once you’ve established it’s available. You are not necessary to reserve your name, but it is a good idea if you do not intend to start your company straight immediately. The fee is $20 and should be made out to the Secretary of State of Tennessee. A check, cashier’s check, or money order can be used to make the payment. Drop off or submit your completed form to 312 Rosa L. Parks Ave. FL 6, Nashville, TN 37243.
Choose your Registered Agent
A registered agent is required for Tennessee LLCs. Legal papers are received by the agent on behalf of the company and forwarded to the relevant person at your company. The registered agent might be you or another LLC member or employee. Your agent must be at least 18 years old and have a physical address in Tennessee (known as the “registered office”).
A third-party company can also serve as your registered agent. Typically, small company owners engage registered agent services for improved privacy and dependability, or because they do business in many states. The cost is generally between $100 to $300 every year. Always remember to obtain your money’s worth before employing someone.
Filling Out Your LLC Forms
Tennessee offers several alternatives for forming an LLC. You can submit electronically or print and send Articles of Organization (Form SS-4270) to the Secretary of State’s office. You may also print and fill out a blank form, then mail it in. Each current LLC member in Tennessee is charged $50, with a minimum price of $300 and a maximum fee of $3,000. For online filings, there is additionally a processing cost.
Form SS-4233, Application for Certificate of Authority, is used by foreign LLCs to gain permission to do business in Tennessee. The same fees and processes apply to new Tennessee LLCs.
Obtain an Employer Identification Number (EIN)
Most companies require an EIN, also known as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN). It’s an ideal alternative to utilizing one’s Social Security number for single-member LLCs, keeping it protected from exposure or potential fraud. EINs are accessible for free on the IRS website.
Make an operating agreement for your LLC
While not legally required, an operating agreement is nonetheless necessary since it establishes a solid long-term framework for your LLC. These contracts spell out everything from who has the greatest voice in corporate decisions to how profits and losses will be distributed and who is in charge of the day-to-day operations. A thorough operating agreement reduces member conflicts and gives your LLC credibility, allowing it to keep its good standing.
Along with forming your LLC, you need also establish an internet presence for your company. Many people conduct internet research on businesses, and a lack of an online presence can have a negative impact on how potential customers see you.
Getting a website name and a social media presence is a great way to establish a point of contact with clients. It’s a good investment for your brand because it will make it easier to publicize your freshly formed Tennessee LLC.
Make an annual report
Every year, Tennessee LLCs are obliged to submit an annual report. It must be signed, accurately dated, and typed or written in ink to prevent being rejected.
The annual report must be accompanied by a filing cost of $300 for LLCs with up to six members, plus $50 for each additional member, up to a total of $3,000. If your LLC’s registered agent changes, there is an extra $20 cost. Maintaining compliance with your yearly report is critical for maintaining your business organization in good standing in Tennessee.
Following the processes outlined above, you should be able to form an LLC in Tennessee without wasting time or money. As hundreds of new enterprises open their doors in the “Volunteer State,” we hope this guide will help you get started.