How to Start an LLC in Tennessee
A Tennessee LLC (limited liability company) is a type of business entity that offers limited liability protection, a flexible management structure, and certain tax benefits. To start an LLC in Tennessee, you must file Articles of Organization with the Tennessee Secretary of State, Business Services Division. The minimum filing fee is $300 (for LLCs with six or fewer members). After that, it costs $50 per additional member. So if you have eight members, you’ll pay $400. But before you can file, you’ll need to choose a name and registered agent for your LLC. Once received, your articles will be processed between 1-10 days, depending on how you file. Below, we provide detailed instructions for starting an LLC in Tennessee.
Ready to Start an LLC in Tennessee?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
Before jumping all in, you’ll need to choose a name for your LLC. Tennessee’s rules for naming your LLC are covered in TN Code § 48-249-106. At a minimum, make sure your LLC name:
- Includes an indicator such as “limited liability company,” “L.L.C.,” or “LLC.”
- Doesn’t include words or abbreviations like “corp” or “incorporated” or “limited partnership”—anything that may make your LLC sound like a different type of entity.
- Hasn’t already been adopted by an existing Tennessee business.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Tennessee?
Yes. If you’re waiting to form your LLC, you can file an Application for Name Reservation to reserve your desired business name for up to 120 days. You’ll need to submit your application to the Tennessee Secretary of State, Business Services Divisions and pay the $20 filing fee.
What’s the difference between my LLC’s name and an assumed business name?
The legal name of your LLC is the one listed on your Articles of Organization. An assumed business name is any name you do business under that’s not your LLC’s legal name.
Having an assumed business name can help your LLC target a specific audience or roll out a niche product. For example, let’s say a jewelry shop wanted to start selling handmade soaps. They could sell custom necklaces under Elegant Jewelry Designs LLC (their legal business name) and sell bath products under Daisy’s Homemade Soaps (an assumed business name).
If you choose to use an assumed business name, you must file an Application for Registration of Assumed Limited Liability Company Name ($20) with the Tennessee Secretary of State, Business Services Division.
2. Designate a Registered Agent
Once you’ve chosen a name for your LLC, you’ll need to appoint a Tennessee registered agent—an individual or business entity that’s authorized to accept legal and state mail on behalf of your LLC. Tennessee requires all LLCs to maintain a registered agent. You’ll also be required to list your registered agent’s information on your Articles of Organization, so it’s important to appoint one before filing.
Learn why the pros use a registered agent service.
What does a registered agent do?
- Have a physical Tennessee street address.
- Be available during regular business hours.
- Accept legal mail and state mail on behalf of your business and get them to you fast.
Can you be your own registered agent in Tennessee?
Yes. However, acting as your own registered agent requires listing your name and address on the Articles of Organization. You must also be available during normal business hours to accept legal and state mail in person.
Can I change my registered agent after I start an LLC?
Yes. You can change your registered agent in Tennessee by filing a Statement of Change of Registered Agent/Office by Entity or Agent with the Tennessee Secretary of State, Business Services Division. The filing is $20.
3. Submit LLC Articles of Organization
To officially start your LLC in Tennessee, you must file Articles of Organization with the Tennessee Secretary of State, Business Services Division. It costs a minimum of $300 (for LLCs with six members or fewer). After that, it costs $50 for each additional member. So if your LLC has seven members, you’d pay $350 to form your LLC. The maximum fee is $3,000.
Note: All of the information on this form will become part of the public record.
To complete the form, you’ll need to provide the following information:
- Company name. Include an indicator like “LLC.”
- Name consent (optional). Want to use the same LLC name as an existing Tennessee business? Check this box and get consent from the other company. Tip: Most businesses choose an original name and skip this section.
- Additional designation (optional). If your LLC isn’t a standard LLC (such as non-profit or professional LLC), you must indicate that in this section. Tip: Most LLCs skip this section.
- Registered agent name and address. Include your registered agent’s name and physical address—PO boxes aren’t allowed.
- Fiscal year close. Include the month your fiscal year ends. For most businesses, this is December.
- Effective date (optional). You can delay the start of your LLC by up to 90 days or skip this section.
- Management structure. Indicate whether your LLC will be member-managed or manager-managed. Tennessee also allows for “director-managed” LLCs, which are structured similarly to corporations.
- Number of members. Enter the number of members (owners) your LLC has at the time of filing.
- Duration. If you want your LLC to close on a specific date, indicate that here or choose “perpetual” if your business will exist indefinitely. Hint: Most LLCs choose perpetual.
- Principal address. This must be a physical street address and can be located outside of Tennessee.
- Mailing address. This can be a PO box.
- Non-profit LLC (optional). Check this box if your LLC will be a non-profit. Otherwise, you can skip this section.
- Professional LLC (optional). Check this box if you’re forming a Professional LLC. Not you? Skip it.
- Series LLC (optional). Check this box if you’re forming a Series LLC or leave it blank.
- Obligated member entity (optional). If you want to forgo your limited liability protection and be held responsible for the debts and obligations of the business, you can check this box. Tip: Nearly all businesses skip this section.
- Prohibited businesses (optional). Check this box if your LLC is (for whatever reason) prohibited from conducting business in Tennessee. Tip: Nearly all businesses skip this section.
- Additional provisions (optional). You can include additional provisions or skip.
- Organizer’s signature. Whoever files your Articles of Organization must sign the document. This person can be someone outside of your LLC.
When you’re done, you can submit the Articles of Organization online, by mail, or in person. If you file online, you’ll be charged a convenience fee—2.29% of the total amount due. Online submissions are processed immediately. Paper filings take 7-10 business days.
How can I keep my personal information off the public record?
Unfortunately, most of what you file with the Tennessee Secretary of State—including the Articles of Organization—will be readily available online. Marketers will find and sell your information to data brokers. It’s what they do.
The best way to maintain your privacy is to hire a registered agent company that will list their business information on public forms instead of yours—like us.
What’s the difference between a member-managed and manager-managed LLC?
In a member-managed LLC, the owners (members) share the responsibility of running the business. In a manager-managed LLC, a manager is in charge of the day-to-day operations. The manager can be an individual hired by the members or someone within the business (as long as they’re properly compensated). Whoever manages the business will also have the power to hire and fire employees, open bank accounts, enter into contracts, and more.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Tennessee Articles of Organization?
You can submit your articles online, by mail, or in person.
Mail and in person:
Secretary of State
6th Floor – Snodgrass Tower
Attn: Corporate Filing
312 Rosa L. Parks Ave.
Nashville, TN 37243
4. Write an LLC Operating Agreement
An operating agreement is a legal document that outlines the rules and regulations all members must follow. It should cover everything from how much each member initially invests to how you’ll handle internal disputes. An operating agreement is an internal document, so you don’t need to file it with the Secretary of State. You will, however, need an operating agreement to open a business bank account.
Check out our attorney-drafted Tennessee LLC Operating Agreement.
Does Tennessee require an LLC to have an operating agreement?
According to TN Code § 48-249-203, only director-managed LLCs (LLCs structured like a corporation) are required to have an operating agreement. That said, your LLC needs to have a solid operating agreement in writing. It’s an internal document, so you won’t need to submit it to the Tennessee Secretary of State. However, your LLC will be subject to Tennessee’s default LLC statutes without a written operating agreement.
What should be included in an operating agreement?
A strong operating agreement should cover “big picture” situations—everything from allocating profits and losses to dissolution. Here are some common topics most operating agreements address:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
You may include pretty much anything in your operating agreement, so long as it doesn’t violate state law or the Articles of Organization.
Does a single-member LLC need an operating agreement?
Yes. Although a single-member LLC won’t need to resolve internal disputes, it still needs an operating agreement to open a business bank account and maintain limited liability protection.
5. Get an EIN
An EIN (employer identification number) is what the IRS uses to identify your business on tax filings. The nine-digit, unique number is like a social security number for your LLC. You can obtain an EIN through the IRS website or file a paper form. There is no filing fee.
Do I need an EIN for my Tennessee LLC?
Yes. Legally, your LLC only needs an EIN if you choose to hire employees or are taxed as a corporation. However, most banks require an EIN to establish a business bank account. Having an EIN also prevents you from giving your social security number to vendors.
Rather be enjoying a barbecue? Then hire us to form your LLC for you!
What To Do After Forming Your Tennessee LLC
6. Open a Bank Account
Your LLC will need a bank account. Why? LLCs are considered separate entities from their owners—meaning business debts won’t affect your personal assets. But if you mix personal and company money, you could lose your liability protection. Opening a business bank account allows you to keep your business spending separate.
To open a bank account for your Tennessee LLC, you’ll need to bring the following to the bank:
- Tennessee LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
You’ve formed your LLC and established a bank account. Now, it’s time to fund it. Each member of your LLC should make an initial contribution to pay for their membership interest. Members typically make initial contributions by writing a check or depositing cash into the LLC’s bank account. However, members may also contribute property or services to the business. It’s important to note that these types of contributions can lead to tax events.
What is LLC membership interest?
Your percentage of ownership in the LLC is referred to as “membership interest.” Traditionally, your membership interest is proportionate to whatever you initially invested into the LLC. For example. If you invest $6,000 into the business, and your partner invests $4,000, you would own 60% of the LLC and your partner would own 40%. Often members who make more significant contributions have more voting power.
8. File State Reports & Taxes
Your LLC will be required to file an annual report each year with the Tennessee Secretary of State, Business Services. Unfortunately, annual report fees in Tennessee are pretty steep. The minimum filing fee is $300, and that’s for LLCs with six or fewer members. You’ll have to pay an additional $50 for each member over your sixth, all the way up to $3,000. So if you have ten members, be prepared to pay $500 to file your annual report each year.
Rather not risk missing your deadline? Let us file your annual report for you.
When is the Tennessee Annual Report due?
Your Tennessee Annual Report is due by the first day of the 4th month following the end of your fiscal year. For LLCs operating under a typical calendar year, this is April 1st.
How are Tennessee LLCs taxed?
Tennessee LLCs are (by default) taxed as pass-through entities. So, business profits“pass through” to the members, who then report their shares on personal tax filings. Your LLC’s profits are also subject to the federal self-employment tax rate (15.3%). LLCs can elect to be taxed as an S-corp or C-corp by filing paperwork with the IRS.
Learn more about S-Corp Vs LLC tax designation.