Limited liability companies offer a variety of benefits to new business owners in Tennessee. They feature the simplicity of a sole proprietorship with added legal protection to shield your personal assets from lawsuits. Plus, they are easier to start and maintain than a Corporation. But, you still have to fill out the correct paperwork and file it with the state. Here is a closer look at how to get an LLC in Tennessee from start to finish.
Is an LLC Operating Agreement Required in Tennessee?
No, an operating agreement is not required in Tennessee, but it’s helpful and often recommended by experts. A Tennessee operating agreement is a document that states how the business will be run and organized. Although not required, an operating agreement will help your business establish credibility and ensure that your personal assets are truly protected.
Tennessee Operating Agreement Laws
The laws that govern how to start an LLC in Tennessee can be found in Title 48 Chapter 206 of the Tennessee Code. While many of the laws are similar to what is required throughout the country, a few are specific to the state. Here is a look at how to create an LLC in Tennessee.
Naming Conventions
The name of any business organized as an LLC must have one of the following terms or abbreviations:
- Limited Liability Company
- LLC
- L.L.C.
So, the owners of the company may stylize it however they like. But its status as an LLC must be made clear in the official name of the business.
Registered Agent
The company must have a registered agent – or someone who agrees to accept any tax or legal documents addressed to the business. So if the business gets sued, the registered agent will accept the paperwork. The state of Tennessee has specific requirements for the registered agent of an LLC.
The registered agent of an LLC in Tennessee must be either:
- A Tennessee resident
- A business entity authorized to do business in Tennessee
The registered agent is also required to have a physical address in the state of Tennessee (whether it’s a business or an individual). So, if you are from out of state, you will have to find a registered agent with an address in Tennessee to set up an LLC.
Types of LLCs
There are also three different types of LLCs you can choose from in Tennessee; single-member LLCs, multi-member LLCs, and Series LLCs. A single-person LLC is an entity with just one person and a multi-member LLC has two or more. A series LLC is a unique type of organization that allows members to set up an umbrella company and have multiple other LLCs underneath it.
How Much Does it Cost to Form an LLC in Tennessee?
The cost of forming an LLC in Tennessee depends on how many members you’re looking to add. The state charges $50 per member with a $300 minimum and $3000 maximum. So, even if you only have 1 or two members, you will still pay $300. But if you have more than 60, you don’t have to continue to pay for each individual member.
In addition to the fee charged by the state, you may also have to pay a filing fee if you file online. Plus, the state of Tennessee requires you to file an annual report with the Secretary of State. The cost of filing the annual report is the same as the original filing fee ($50 per person, between $300 and $3000).
Those are the bare minimum costs of filing an LLC. You may choose to add additional services to set up your business, such as setting up a dba or purchasing a domain name. But those are the minimum costs for establishing the entity.
How to Form an LLC in Tennessee
So you have everything ready to go, but you’re not quite sure where to start. Here is a step-by-step look at how to register an LLC in Tennessee.
Step 1 – Choose a Name
The first step is to establish a name. Remember that it has to contain the term-limited liability company, LLC or L.C.C. It also has to be unique from any other business entity already registered with the state. You can check the Tennessee Secretary of State business name database to check for availability.
Step 2 – Find a Registered Agent
Next, you have to appoint a registered agent. Remember that the registered agent must have an address in the state of Tennessee.
Step 3 – File the Articles of Organization
Download and fill out the articles of organization (Form ss-4270). Here you will state the name of your company and the address of the registered agent, along with other essential information. The document can be mailed or filed online with the Secretary of State.
Step 4 – Draft an Operating Agreement
Although not required, if you plan on filing an operating agreement, you should take care of that next.
Step 5 – Set up an EIN Number
Once the paperwork has been filed, you will need to get an EIN number for your business so you can pay your taxes and meet any regulatory requirements.
Step 6 – File an Annual Report
Once you’ve filed all the paperwork, you’re ready to set up shop. Just remember to file the annual report and pay the necessary fee each year to stay in business.
Tennessee LLC Operating Agreement Template
So if you’re ready to take the plunge and start a new business in Tennessee, Legal Templates has everything you need. Here is a Tennessee operating agreement template you can use to file with the state.
