How to Form an LLC in Tennessee: The Affordable Way

Author: Mathew Abraham

Starting a new business can be scary. However, following a structured approach can help reduce some of the burdens. The first step in starting your business is to decide on the organizational structure. An excellent pathway to enter the US business arena is by forming a Limited Liability Company (LLC).

Having an LLC in Tennessee opens the door to tax savings. In addition, it provides flexibility similar to a sole proprietorship and the limited liability that a corporation enjoys. You can register your LLC with the state of Tennessee by following the detailed steps in this article.  

Name your Tennessee LLC

Naming your LLC is an essential first step to building your brand identity. A catchy name for your LLC is not only mandated by the Tennessee state guidelines but would also help your potential customers identify and search for your company. However, keep in mind the guidelines you need to follow when choosing a name.

Naming Guidelines

Make sure to check the rules mentioned here while naming your Tennessee LLC. Some mandatory phrases need to be present. For example, your LLC’s name must contain the phrase ‘Limited Liability Company’. This can be in any form or abbreviation (like LLC / LLC. / L.L.C.).

In addition, there are certain restricted phrases. You should strictly avoid using words associated with government agencies in common parlance. This covers agencies like the State Treasury, the FBI, and the like.

Also, avoid using terms that may indicate the involvement of specialized licensed services or individuals like ‘university’ or ‘bank.’ This would save you from additional paperwork.

Your LLC’s name cannot include any professional designation without a prior license. For example, Doctor, Attorney, etc. Usage of these words requires a copy of the license to be submitted while reserving the name.


The name you choose for your LLC will play a crucial role in helping the customers identify your products or services in the sea of companies. So, make sure to choose a crisp name that is not similar to any other businesses on file with the Tennessee State Secretary.

Does Your Business Require a DBA?

DBA (doing business as) is an alternate name adopted by a business entity different from its legal name. In simple terms, DBA is an assumed name meant for trade purposes. To ascertain whether your LLC needs a DBA, it is essential to keep certain things in mind.

For instance, DBA can be a good idea if your company needs rebranding or if you plan to diversify your products. In addition, DBA can be your way of getting a name that better represents the services/products you provide.

Filing for a DBA for your LLC can be an excellent first step toward rebranding your company and improving the overall customer experience. Remember that a DBA is not a legal entity but merely an alternative to the company’s legal name.

APPLY FOR A DBA IN TENNESSEE

Option 1: Apply for a DBA Online

Apply Online – OR –

Option 2: Apply for a DBA in Person

Download Form

Filing address:
Corporate Filings
312 Rosa L. Parks Ave.
6th Floor, William R. Snodgrass Tower
Nashville, TN 37243
Phone number: 615-741-2286

Fee: $20

Doing a Name Search and Name Reservation

It is essential that your business does not have a similar name as that of other existing businesses. A good idea to ensure this is to go through the list of names available in the State Business Entity Search by Entity Name

Though not mandatory, you can avoid potential clashes by reserving a name for your LLC. For this, you must file an application with the Tennessee State Secretary. You can get the form for name reservation online or alternatively, you can email the secretary of State at TNSOS.CORPINFO@tn.gov. You may also get a copy of the form from the office of the secretary of state. Remember to use only a black or blue pen to fill out your name reservation application. Refer the instruction manual to understand how to fill the form.

RESERVE YOUR LLC’s NAME IN TENNESSEE

File by Mail With the Tennessee Secretary of State

Download Form

Mailing address:
Corporate Filings
312 Rosa L. Parks Ave.
6th Floor, William R. Snodgrass Tower
Nashville, TN 37243
Phone number: 615-741-2286

Fee $20

Registering your business domain

Your website address is how the customers find your business online. Therefore, it is vital to ensure that your business has a website address that matches the name you selected. Do a domain search to check if the domain you want is available to register.

Choose a Resident Agent in Tennessee

You can think of a registered agent as a bridge between your business and the Tennessee State Secretary. An agent’s task is essential to ensure a smooth flow of all the documents and other communications between the state and the company.

According to Tennessee State Law, you must choose an agent who can legally work on behalf of your LLC. Your registered agent can receive legal correspondence and mail on behalf of the LLC. These are the minimum services provided by an agent. An agent who’s on their feet can help you do much more and thus up your efficiency game.

Who Can Be a Registered Agent?

A registered agent for your LLC would have to meet the following requirements:

  • Above 18 years of age
  • Has a street address in Tennessee
  • Available during regular business hours at the address provided by you to receive any communications addressed to the LLC.

Remember to have a registered agent before filing for an LLC before the Secretary of State. Otherwise, the LLC application will be rejected as per Tennessee State rules. Most of the agent services charge an annual fee which can be anywhere between $50 to $300. 

Individual v. Resident Agent Service

You yourself, other members of your LLC, or even your friends, or family, could be your LLC’s registered agent as long as they meet the aforementioned requirements. 

Alternatively, you may also opt for a professional registered agent service. Selecting yourself as the agent for service of process may not be advisable for all businesses. Using a professional registered agent service has many advantages.

Having a professional registered agent service ensures that you don’t fail to duly respond to any notice or other communication that may be sent to your LLC.

They remind you when your returns and other filings are due and help ensure you don’t miss any deadlines.

The registered agent’s address is available for the public to access on the concerned websites. So if you work out of your home or a private office, having a professional registered agent service will help you maintain privacy.

Getting professional help also allows you to focus your energy and time on core business areas.

If you are your own agent, you risk receiving sensitive documents like notice of a lawsuit in front of your employees or clients. Having a professional registered agent service helps you handle the situation discreetly. They receive such sensitive documents at their address and deliver them to you separately. 

File the Articles of Organization with Tennessee

Articles of Organization is a legal document needed to form and legally incorporate your LLC. It is to be filed with the office of state secretary. Once this is completed, your LLC is registered and is recognized in the eyes of the law. 

The Articles of Organization must provide for the following details:

  • Entity Name
  • Name Consent (if applicable)
  • Additional Designation (if applicable)
  • Registered Agent Name and Registered Office Address
  • Fiscal Year Close Month
  • Effective Date
  • Governing Authority Type
  • Number of Members
  • Duration
  • Principal Office Address and Mailing Address
  • Designation Confirmation
  • Obligated Member Entity Information (if applicable)
  • Business Prohibition (if applicable)
  • Other Provisions
FILE ARTICLES OF ORGANIZATION WITH TENNESSEE

Option 1: File Your Articles of Organization Online

File Online – OR –

Option 2: File by Mail

Download Form

Mail to:
6th floor – Snodgrass Tower
Attn: Corporate Filing
312 Rosa L. Parks Ave.
Nashville, TN 37243

Fee: $300+ Make check, cashier’s check, or money order payable to the Tennessee Secretary of State. (Nonrefundable)

Expedited Filing

It can take as much as 4-6 business weeks to process your LLC formation request. However, you can opt to expedite the process in most of the States if you are working under a time crunch. Unfortunately, Tennessee does not have any provision for expedited filing. However, the online applications are mostly approved on the day of the filing itself.

Publish Notice

Tennessee does not mandate the publishing of Articles of Organization or any other legal document in the newspaper. 

Create Operating Agreement for your Tennessee LLC

An operating agreement is a legal document. It lays down the rules of your LLC’s internal operation and functioning. It also provides a framework concerning the duties of members of the LLC and its managers. An operating agreement acts as a guiding force in matters of the day-to-day functioning of the LLC.

The Tennessee State laws do not make it mandatory for an LLC to have an operating agreement. The State regulations do, however, advise creating an operating agreement for internal use. But getting one is still advised to avoid any potential disputes in the future.  

An operating agreement offers credibility to your enterprise. You will need an operating agreement for opening an account with the bank. More importantly, it helps protect the LLC’s limited liability status by reinforcing it. Thus, it is recommended that even a single-member LLC have a well-drafted operating agreement.

There are no prescribed templates for an operating agreement in Tennessee, and you may draft one according to the needs of your business. However, irrespective of the nature of your business, it shall be advisable for your operating agreement to cover the following matters:

  • Organization Details 
  • Ownership 
  • Duties of Members and Managers
  • Management and Voting 
  • Capital Contributions
  • Division of Profit and Losses
  • Bookkeeping Procedures
  • Procedure for adding new members
  • Requirements concerning Meetings and Procedures thereof
  • Dissolution

Writing The Operating Agreement Yourself vs. Hiring a Service

There are various online templates available online that can be used to come up with an operating agreement for your LLC. You can also use an outside agency for the same. However, you will have to pay these agencies for their services.

Since an operating agreement is not required to be filed with the State Secretary in Tennessee, you can formulate it yourself using online tools to save some additional costs.

It is an internal document and will ultimately be used by the LLC members. However, if you are not worried about your budget, then rely on a hiring service to make it properly.

Limits of Operating Agreement

There are no specific formats for an Operating Agreement. However, it cannot include any matters prohibited under the law. That means the LLC owners cannot use the operating agreement to override or not abide by any of the Statutes in the State.

For example, the Tennessee Limited Liability Company Act provides specific provisions regarding operating agreements. These provisions cannot be superseded by any operating agreement formed in the State.

Obtain an EIN for your Tennessee LLC

EIN (Employer Identification Number or Federal Identification Numbers or FEINs) is an identification number allotted by the IRS. The IRS uses it to identify an operating business entity for taxation purposes.

Other than tax filing purposes, it is required for opening a business bank account in your LLC’s name, applying for certain business loans, obtaining licenses, and for hiring manpower.

GET AN EIN

Option 1: Request an EIN from the IRS

Apply online – OR –

Option 2: Apply for an EIN by Mail or Fax

Download form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

File Annual Reports in Tennessee

The Tennessee Secretary of State requires an annual report from all Tennessee LLCs and international LLCs that are permitted to conduct business there. This has to be accompanied by a $50 filing fee per member.  It is mandatory to file annual reports of your LLC in Tennessee and failure to do so can result in the State shutting down your business.

Keep in mind that it is to be filled on or before the fourth month following the end of the fiscal year. This is after the closing of the LLC’s twelve-month term. You may file the Annual Report online with the Secretary of state.  

Tax Liability For Your LLC in Tennessee

The way your LLC will be taxed depends upon the number of members in your LLC. There are four ways in which LLC will be taxed:

  • Sole-proprietorship: a business owned by single person
  • Partnership: a business owned by multiple people
  • C – Corporation: income is split, or segregated, for taxation
  • S – Corporation: tax liability is split between the business and its owners

Federal Tax Obligations

If you’re a single-member LLC, your default taxation type will be that of a sole proprietor or ‘disregarded entity’. The LLC has to report its activities under Schedule C, Schedule E and/or Schedule F of Form 1040

If your LLC has more than one member, it will be taxed as a ‘partnership’ by default. In this case, apart from filing Form 1040, you’ll have to file your partnership return in Form 1065 and provide information in K-1 of each partner. 

If you would like your LLC to be taxed like a C-Corp or S-Corp, you can do so by filing Form 8832 and Form 2553, respectively.

State Tax Requirements

Sales Tax- You will be required to register to get a seller’s permit if you plan on selling physical products. This will give you the right to collect sales tax from your customers. You can apply for a seller’s permit by visiting Tennessee’s Revenue Department website.

If your LLC has hired employees, you must sign up for Unemployment Insurance Tax.

Miscellaneous Taxes

Tennessee laws require you also to file Franchise and Excise Taxes for your LLC. These taxes are essentially the taxes you pay to Tennessee to avail yourself the privilege of doing business under limited liability status in the State. The revenue department administers the taxes together under one structure even though they are two separate taxes.

While excise tax is assessed on net income, the franchise tax is determined by the taxpayer’s net value. The former is levied at 25% for every $100, while the latter is imposed at 6.5% per fiscal year. You can fulfill these tax compliances via the revenue department’s online site. The tax has to be filed on or before the 15th day of the LLC’s fourth month (after the initiation of a tax year).

Permits and Licenses

An LLC operating in Tennessee must comply with State and Federal regulations. Accordingly, your business will be subject to three licensing jurisdictions: Federal, State and Local.

Federal Licensing requirements will depend on the business activity carried on by your LLC. If your company is engaged in any area of business regulated by the Federal Government, you will be required to obtain relevant Federal Licenses and Permits.

Some business activities requiring Federal Licenses and Permits are

At the State level, your LLC should get a seller’s permit if it sells specific physical products or services to which sales tax applies. You can apply for a retail license online using Tennessee’s Department of Revenue’s website.

Depending on where you operate your business, you may also be required to get the local government’s license and permit. Some cities/counties have specific permit and license requirements depending on the nature of your business. You can get in touch with your local government office to know more.

For more information regarding;

Business Bank Account & Phone Number

It is always beneficial to watch your steps when it comes to starting a new company. Always use a different bank account for your business so as to avoid your personal assets coming at risk during any contingency. All you need to do is get the required documents handy. After this, visit your banker to open a bank account properly.

It is also advised to get a business phone number for your LLC. This way, you can not only keep your personal numbers safe from identity theft but also keep a track of the business calls more efficiently.

Final Thoughts

Double checking all the form applications and required document attachments can be an excellent way to avoid a last-minute frenzy. Remember to add the application fee wherever needed, so your LLC formation process is not delayed. You can also check out any other information and get more details in the business section of the Tennessee State Secretary’s official website.

Leave a Comment

We Have Compared the Best LLC Services in 2021

Our lawyers have compiled a list of the top LLC services available in 2021 by ranking them on the basis of important metrics such as trustworthiness, value-for-money, support, and convenience.

Read Our Comparison