How to Start an LLC in Tennessee
To start an LLC in Tennessee, you must file Articles of Organization with the Tennessee Secretary of State, pay a minimum filing fee of $300, and get an EIN from the IRS. The complete steps to forming a Tennessee LLC are as follows:
- File Tennessee LLC Articles of Organization
- Pay the Tennessee Secretary of State a minimum of $300
- Wait to receive your approved Articles
- Get a Federal EIN tax ID for the LLC
- Create a Tennessee LLC Operating Agreement
- Take these documents to the bank and get a Tennessee LLC bank account
- Register with the Tennessee Department of Revenue
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Tennessee LLC Articles of Organization free download. When you're done filling out the form, submit it to your state.
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3 Day Tennessee LLC For $534 Total
How to File Tennessee LLC Articles of OrganizationTo form a Tennessee LLC, you file the LLC Articles of Organization in the following steps:
What is the Cost of a Tennessee LLC?
The Secretary of State doesn’t just charge a flat fee. Instead, the state filing fee for Tennessee LLC Articles of Organization is $300 for up to 6 members. After that, there’s a $50 per member charge. So, if you have 10 members in your LLC, it’ll set you back $500 to file your Articles. There are also service fees for online filings—2.35% for credit cards and $0.95 for eChecks.
Hire Northwest, and your total, out-the-door cost for an LLC (of 6 members or fewer) is $534, including state fees.Get Started
How much does an LLC in Tennessee cost each year?
The fee to file the Tennessee LLC Annual Report is $50 per member ($300 minimum and $3000 maximum).
What are the Tennessee LLC taxes?
Tennessee has a very limited personal net income tax rate of 5% (the tax only applies to interest and dividend income). Sounds great, right? Before you jump for joy, note that Tennessee has two other fairly hefty business taxes: a franchise tax and an excise tax.
The Tennessee Franchise Tax is a tax ($0.25 per $100) on whichever is larger: your net worth or your real and tangible property in Tennessee. There’s a minimum franchise tax of $100. The Tennessee Excise Tax is a tax on net earnings (6.5%). Both of these taxes affect your LLC no matter how your LLC chooses to be taxed.
There’s also a sort of hybrid state-local gross receipts tax called the Business Tax. There are two separate returns, one for the state business tax and one for the city business tax. Both returns, however, go to Tennessee Department of Revenue. The tax is required for businesses with gross receipts over $10,000. Tax rates vary, but there’s a minimum tax of $22.
On top of all this, the state sales tax rate is 7%. When you add in local city and county sales taxes, the average total sales tax is a whopping 9.379%.
Is a Tennessee LLC Registered Agent Required?
Absolutely—the Tennessee Code requires LLCs to appoint a Tennessee registered agent. You don’t have to hire someone. You could do it yourself—but know that you’d have to publicly list a Tennessee street address that would become part of the permanent record of your Tennessee LLC. Goodbye privacy, hello junk mail. You’d also have to be available at that address during business hours to accept legal notices—and business doesn’t always take place in the office. It’s hard to manage offsite meetings, business travel or even the occasional long weekend when you’re stuck at your desk.
Not keen on publicly listing your address or being tied to the office? When you hire Northwest, you can list our address instead of your own and free yourself up to focus on your business. (Or you know, go to Bonnaroo.)
Tennessee LLC Versus Tennessee Corporation:
When it comes to state filing fees, Tennessee corporations are much cheaper than Tennessee LLCs. Forming a corporation is only $100 and Annual Reports are $20—much lower than the $300+ LLCs pay for these filings. Taxes, however, are much more evenly matched. Both LLCs and corporations (regardless of tax type) pay Tennessee’s excise and franchise taxes.
If state filing fees are so much more expensive, why would anyone want a Tennessee LLC? Flexibility. Tennessee LLCs are the Meryl Streeps of the business world—they can transform into nearly anything. In Tennessee, you can make series LLCs or director or board-managed LLCs. Heck, you can even form an Obligated Member Entity LLC which is an LLC that lacks limited liability, like a general partnership. LLCs also have a wide variety of tax options. While the typical LLC is taxed as a partnership, LLCs can choose to be taxed as S or C corporations as well. Corporations have some flexibility in these areas as well, but LLCs really take the cake. Leaning toward a corporation? Here’s information on Tennessee incorporation.
Do I Need a Tax ID Number (EIN) for a Tennessee LLC?
You’re required to get a FEIN for your Tennessee LLC if you have employees or file certain federal excise taxes. In Tennessee, your LLC is also required to register for excise and franchise taxes, and registration requires your LLC’s FEIN (or your personal social security number—but who wants to hand that out any more than they have to?). Even just to open a business bank account, you’ll most likely need a FEIN. You can get a FEIN at no cost directly from the IRS. Or, skip the extra application and hire Northwest to get your FEIN for you when you sign up for our services.
Does a Tennessee LLC Need a Business License?
While there isn’t a state-level general business license in Tennessee, many counties or municipalities require business licenses. For example, Davidson County requires either a business license or a “minimal activity license” (for businesses with less than $10K in gross receipts).
What is a Tennessee LLC Annual Report?
A major hit to the wallet. Your Tennessee LLC Annual Report is a form you submit to the Tennessee Secretary of State that comes with a $300-$3000 price tag. You file this form each year to confirm your LLC’s contact and ownership information. And if you actually need to change information on your report? Add on $20 for the change agent/office fee. And for the convenience of paying online? You’ll also fork over an extra 2.35% for debit or credit card processing or $0.95 for eCheck payments. And if you file late? Surprisingly, there’s no late fee—but the state will dissolve your LLC or revoke your registration if you don’t pay up in 60 days of their delinquency notice. That’s why Northwest sends you reminder notifications when you sign up for our services. You can even hire us to file your Annual Report for you each year and save yourself the headache.
Tennessee LLC Articles of Organization Requirements:
Your name must include “Limited Liability Company” or an abbreviation. Most businesses keep it short and sweet with “LLC.”
Want to use an LLC name already in use in Tennessee? You can if you get permission and tick the box in this section. Tip: Most businesses opt for something original and skip this section.
If your LLC isn’t just a standard LLC (for example, if you’re a nonprofit, a professional LLC or a series LLC), you’ll have to note that in this section and also tick the appropriate box on the last page of the paper application. If you’re a bank, insurance company, litigation financier, or trust company, you’ll need to note that in the designation section as well. Tip: Most LLCs aren’t any of these and skip this section.
You can list an individual, such as yourself, or a business that provides registered agent service, such as Northwest. We recommend Northwest.
This Tennessee street address will become a part of the permanent public record of your LLC. When you hire Northwest, our address will go here.
Fiscal Year Close Month
Include the month that your fiscal year ends. Most businesses operate on a normal calendar year and list December as their FY close month.
If you want your LLC to begin on a specific date in the near future (maybe the next tax period is just around the corner), you can list an effective date up to 90 days in the future. Want your Tennessee LLC to start right away? Skip this section.
Tick the box to indicate whether your LLC is managed by members (typical), managers (fairly common), or directors (uncommon—Tennessee allows for “director-managed” LLCs, which are similar in structure to corporations).
Number of Members
Have more than 6 members? You’ll pay a higher filing fee—$50 per each additional member.
Want to put an end date on your LLC? Include that here. Prefer to have your Tennessee LLC continue indefinitely? Choose “perpetual.”
This is the official street address of your Tennessee LLC. Hire Northwest and you can use our Tennessee address as your principal office.
Sure, it’s a Limited Liability Company, but if you want to forgo asset protection and have members held liable for the debts and obligations of the company, you can tick these boxes and register your LLC as an Obligated Member Entity. Tip: This is pretty uncommon; most businesses don’t tick these boxes.
If for some reason you’re forming a Tennessee LLC that is prohibited from engaging in business in Tennessee, you’ll tick this box. Tip: It’d be pretty unusual if you had to tick this box. Nearly all businesses skip this section.
Tennessee LLC Organizer
Your organizer signs and submits your Articles of Organization. Organizers don’t have to be anyone in your LLC. When you hire Northwest, we’ll be your organizers.