Start an LLC in Tennessee

First things first: Your LLC needs a name. The full rules for naming your business are detailed in TN Code § 48-249-106. But in general, your LLC name should:

• Have an accepted indicator such as “limited liability company,” “L.L.C.,” or “LLC.”
• NOT include words or abbreviations like “corp” or “incorporated” or “limited partnership.” In other words, leave out anything that could imply your LLC is a different type of entity.
• Not already be in use by another Tennessee business.

If you’ve already grown attached to a potential name, the Tennessee Secretary of State’s office can tell you if it’s available via a business name search. If you want to reserve a name before filing formation paperwork, you can submit an Application for Name Reservation. This form lets you pay a $20 fee to reserve a business name for up to 120 days.

All businesses in Tennessee are required by law to have a registered agent. That registered agent can be you, a friend, a stranger, or company like Northwest that you hire. But no matter who they are, they have to be willing to accept legal mail, notably service of lawsuits, on behalf of your business. Then they must forward that legal mail to you quickly. Other than that, your Tennessee registered agent must:

• Have a physical address within Tennessee. This means no PO Boxes.

• Be available during regular business hours to accept legal mail

To officially create your Tennessee LLC, you must file Articles of Organization with the Tennessee Secretary of State’s Business Services Division and pay a minimum filing fee of $300 for LLCs with six members or fewer. If your LLC has more than six members, it will cost an additional $50 for each member, up to a maximum fee of $3,000.

Also note that everything you list on your Articles of Organization becomes part of the public record.

Below is the required information for your LLC’s Articles.

• Company name. Include an indicator such as “LLC.”
• Name consent (optional). If you want to use the same LLC name as an existing Tennessee business, check this box and get consent from the other company.
• Additional designation (optional). If your LLC isn’t a standard LLC (like a non-profit or professional LLC), you must indicate that here.
• Registered agent name and address. PO boxes aren’t allowed.
• Fiscal year close. List the month your fiscal year ends. For most businesses, this is December.
• Effective date (optional). You can delay the start of your LLC by as many as 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 when you file.
• Duration. If you want your LLC to close on a specific date, indicate that here or choose “perpetual” if your business will exist indefinitely.
• Principal address. This can be a located outside Tennessee, although it must be a physical street address.
• Mailing address. A PO Box is fine here.
• Non-profit LLC (optional).Check this box if your LLC will be a non-profit, or leave it blank.
• Professional LLC (optional). Check this box only if you’re forming a Professional LLC.
• Series LLC (optional). Check this box if you’re forming a Series LLC or leave it blank.
• Obligated member entity (optional). LLCs exist to limit liability by design, but if you there’s some reason 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.
• Prohibited businesses (optional). Check this box if your LLC is (for whatever reason) prohibited from conducting business in Tennessee, but most businesses can skip this.
• 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.

An operating agreement details how your business will be run. This is an internal document, so you don’t have to file it with the state, but you still need to put some work into an operating agreement. The agreement should include information about how voting works, how membership gets transferred, and other important topics.

Contact a lawyer or use our free Tennessee LLC Operating Agreement Template.

Every business needs money to operate, and your Tennessee LLC is no exception. Opening a business bank account helps you keep your limited liability, which is important in case your LLC ever ends up in court. Before you open a bank account, you need to get an EIN.

After your bank account is established, it’s time to fund the LLC. It’s simpler than it sounds: each member needs to make a financial contribution that matches their membership interest, aka the percentage of the LLC they own.

Tennessee LLCs must meet certain tax and reporting obligations. Here’s a breakdown:

• Taxes: A Tennessee LLC’s default tax status is pass-through entity, which means the profits “pass through” the LLC and get distributed to the members. Those members are then obligated to report the profits on their personal tax filings. At the federal level, Tennessee LLCs must pay a 15.3% self-employment tax rate.
• Annual Reports: Like most states, Tennessee requires you to file an annual report to keep the state updated on any changes with your company. For an LLC with six members or fewer, it costs $300 to file. For every additional member after six, it costs an extra $50, although $3,000 is the maximum amount any LLC has to pay. If you aren’t up to handling annual reports yourself, you can hire us to file them for you.
• BOI Report: Most Tennessee LLCs need to submit an additional filing to the federal government. 2024 is the first year you’ll have to file a Beneficial Ownership Information (BOI) Report. There’s no fee to file the form, but you do have to include information about your company’s beneficial owners and, in some cases, the company applicant. That information goes to a government agency called FinCEN. You can also hire us to file your BOI Report on your behalf.

*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.