Step 1) Verify & Secure Your LLC Brand Name
To secure and register your brand name should be unique, not too similar to another registered name in TN, and shouldn’t contain any restricted wording.
Your name should contain the words ‘Limited Liability Company’ or ‘Limited Company’. Abbreviations for these words like ‘L.C.’ or ‘L.L.C.’ are also acceptable. If needed, you may file an Application for Reservation of LLC Name with the Sec. of State that’s valid for 120 days.
Filing Fee: $20
Remember, this isn’t optional in Tennessee-- it’s mandatory.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Appoint A Registered Agent
When starting a Tennessee LLC, a Registered Agent is your intermediary or a representative of your brand who accepts and helps handle/process all official documents like state filings, tax forms, legal notices, and so forth.
Typically it comes down to either hiring a 3rd-party professional and paying up to $160/yr, or you can get a certified agent free of charge when you form an LLC with a service like IncFile. They take care of handling the paperwork in a timely manner for you along with a lot more depending on your specific startup package.
Step 3) File Articles Of Incorporation
Download the Tennessee Articles of Organization (if being formed in TN vs transferred from another state) and read all the instructions very carefully. There are four ways to file: e-File through the NewBiz system, mail, walk-in, or paper submission.
This is a serious declarative document that discloses the basics of your LLC for the public record.
Filing Fee: $50 per member; $300 min & $3,000 max.
Step 4) Get An EIN
An EIN, or Employer Identification Number, is more essential red tape which makes it possible to legally hire employees, set up an official bank account in step 5, and get through tax time.
You can't conduct business without one, but thankfully it's a snap these days to get synced with "the system" so to speak.
Quick, easily, and free of charge you can get yours through the IRS Website.
Step 5) Open A Business Bank Account
With your EIN setup, start researching to see which state/local/national bank or credit union offers the most in terms of overall perks and services.
Aside from this aspect, its important that your company has its own completely separate account or financial persona apart from any other accounts of any kind. This is about protecting yourself, your assets, your team, and the brand. Don't be sloppy!
Step 6) Draft An Operating Agreement
While this document isn’t mandatory or a legal requirement, what it does is add another layer of safety for everyone involved and details duties/responsibilities.
It also, “defines each member or manager’s rights, powers, and entitlements. This includes capital accounts, membership interest, distributions of profit and allocated tax responsibility, etc.” It may be optional, but it shouldn’t be in our opinion.
To get started, consider checking out an online Operating Agreement template which you can customize yourself for your specific circumstances.
Step 7) Cover All LLC Taxes & Licensing/Permits
Tennessee is an awesome place to be in business, but to be honest, do your research on this step.
Adhering to business licenses, permits and taxes are important. That said, depending on the nature of your business it may be a breeze to get the licensing and taxes taken care of.
To get started yourself bookmark the Nashville district office of the Small Business Administration, and the state's Business Enterprise Resources page because they’re going to be go-to sources. If you need help with this step, consider professional Business License Research packages that handle the legwork.
Need Help Forming an LLC?
If you'd like help forming an LLC in Tennessee, feel free to read our reviews of the two most popular services.