How to Start an LLC in Tennessee

Woman at computer holding mug, and text that says, "Start an LLC."

How To Use This Guide

It’s easy to form an LLC, just follow these steps:

  1. Name Your LLC
  2. Choose A Registered Agent
  3. File Formation Documents
  4. Create an Operating Agreement
  5. Get an EIN

Use A Professional Service

A professional LLC service will handle the entire formation process on your behalf, allowing you to focus on the other needs of your new business.

4.7 out of 5 starsZenBusiness ($39 + state fee) for basic & quick LLC formation.

3.6 out of 5 starsLegalZoom ($79 + state fee) for the most popular LLC service available.

Setting up a Tennessee LLC is Easy

You can form a Tennessee LLC (Limited Liability Company) yourself by filing the Tennessee Articles of Organization with the Secretary of State. The cost to create an LLC in Tennessee is $50 per member (minimum of $300 and a maximum of $3,000).

Follow our free How to Start an LLC in Tennessee guide below to get started today.

If you are thinking about hiring a professional service to form an LLC, read our Best LLC Formation Services review.

Steps to form an L L C in Tennessee

Step 1: Create A Name For Your Tennessee LLC

First off, in order to launch a successful Tennessee LLC, you need to give it a name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.

Legally, your business name must:

  • Contain the words limited liability company, limited company, or the abbreviation LLC or L.L.C.
  • Not contain the words mortgage, bank, banks, credit union, or trust without approval from the Tennessee Department of Financial Institutions.
  • Be distinguishable from any other entity or trade name registered in Tennessee.

For a complete list of rules, visit the Tennessee Secretary of State.

If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider applying for an assumed name after you’ve nailed down your branding.

What To Do:

Once you’ve decided what you’d like to call your LLC in Tennessee, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Tennessee LLC Articles of Organization.

Need help naming your LLC? Check out our LLC name generator to find the best name for your LLC.

Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use GoDaddy to search for your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.

Find a Domain Now

Service provided by GoDaddy.com

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

Step 2: Appoint A Tennessee Registered Agent

When you file your Articles of Organization, you will be asked to appoint a Tennessee registered agent.

Your registered agent will be responsible for receiving important legal documents like tax forms and service of process notices on behalf of your LLC. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Tennessee.

Tennessee does give you the option to act as your own registered agent, but many business owners choose to appoint a professional instead. Here are a few things to think about before you decide to act as your own:

  • You’ll have to maintain normal (9 am - 5 pm) business hours at the address you provide.
  • If you run your business from home, you’ll be required to make your personal address public.
  • You must keep up on important notices, dates, and deadlines.
  • You could be served in front of your family or coworkers.

What To Do:

If you’re considering acting as your own registered agent, do some research, starting with our registered agent guide. If you decide you’re up for the task, go ahead and list your own name and address on your Tennessee Articles of Organization.

If you’re leaning toward hiring a professional, we recommend using an LLC formation service as your registered agent. Many registered agent services offer up to one year of registered agent service free when you form your Tennessee LLC with them. 

Step 3: File the Tennessee LLC Articles of Organization

Now it’s time to officially form your LLC by filing your Articles of Organization with the state of Tennessee. You can do this on your own, with the help of a lawyer, or through a professional LLC filing service.

What To Do:

You can either file online with the Tennessee Secretary of State or fill out a hard copy of the form and mail it in. The filing fee is $300. If you choose to mail in a hard copy, send the form and payment (payable to the Secretary of State) to the following address:

Secretary of State
312 Rosa L Parks Ave
3rd Floor
Nashville, TN 37243

Or deliver it in person to:

Tennesse Secretary of State, Division of Business Services
William R. Snodgrass Tennessee Tower
312 Rosa L Parks Ave
3rd Floor
Nashville, TN 37243

Or fax it to:

(512) 463-5709

Processing time is 3 days if filing online or 5 to 7 days if filing by mail.

Sure, you can handle this step on your own, but we still recommend considering the help of an LLC formation service. Why? Not only will they take the reins and make sure you file everything properly, but they’ll also provide other necessary products and services at very competitive prices.

One great option is ZenBusiness. In addition to great service, they give you a free year of registered agent service when you sign up.

Step 4: Create A Tennessee LLC Operating Agreement

Creating a Tennessee LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.

Your operating agreement should outline the following:

  • each member’s responsibilities
  • how new members will be admitted
  • how existing members may transfer or terminate their membership
  • how profits and dividends are to be distributed

From there, you can add as many provisions as you want, provided they are not in conflict with Tennessee business law. Learn more about Operating Agreements in Tennessee.

Quick Note: Download a template of create a custom Free Operating Agreement using our tool on How to Start an LLC. No credit card required, ever.

Step 5: Obtain An EIN (Employer Identification Number) For Your LLC

The Employer Identification Number (EIN), Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN), is essentially a Social Security number (SSN) for your company. State and federal agencies use this number to track your business activity.

Your EIN will come in handy when it’s time to:

  • Open a business bank account
  • File Federal and State taxes
  • Hire employees

We think the best way to get an EIN for your LLC in Tennessee is by using the free online application on the IRS website. We prefer this method because it's the most efficient, but you can apply by phone, fax, or mail. You can read through our How to Get an EIN guide to find out how.

Maintain Your LLC's Personal Asset Protection

Using dedicated business banking and credit accounts is essential for personal asset protection.

Now that you’ve made it through the formation process for your Tennessee LLC, you’ll need to take steps to protect your personal assets and establish your business as an independent entity.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Tennessee LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can go a long way in protecting your assets with these three steps:

1. Open a business bank account.

A business bank account separates your personal assets from your company's assets, which is necessary for personal asset protection. A designated business bank account also makes accounting and tax filing easier.

Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.

2. Get a business credit card.

A business credit card helps you separate personal and business expenses. A business credit card will also build your company's credit history, which can be useful to raise capital later on.

Learn about the best small business credit cards.

3. Designate an authorized representative.

Make sure all documents are signed by a representative of your Tennessee LLC and not by you (or other LLC members) directly. This will help separate you from liability incurred by the LLC.

4. Learn how to build business credit

A good business credit score will help establish your business’s fundability. It can help with many things, including credit cards that are issued in your business’s name and score instead of depending on your personal credit score, better interest rates on loans, higher lines of credit, and more.

Reduce the Liability of Your LLC in Tennessee

Business Insurance

Business insurance helps you manage risk and focus on growing your LLC in Tennessee. Carrying the right coverage protects your LLC from liability and keeps you safe in the event of a loss.

The most common types of business insurance are:

  • General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
  • Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers claims of malpractice and other business errors.

There are free services available that quickly assess your business’s insurance needs. These services suggest customized policies with various insurance carriers so that you can choose the best value. One such reliable service is CoverWallet.

Labor Law

You can reduce your LLC’s liability by being fully compliant with employment laws such as:

  • Verifying new employees are allowed to work in the US.
  • Reporting employees as "new hires" to the state.
  • Withholding employee taxes.
  • Printing workplace compliance posters and placing them in visible areas of your workspace.

If you plan to hire employees, you might also be required to invest in Workers' Compensation Insurance. This type of policy provides coverage for employee job-related illnesses, injuries, or loss of life.

Find out more information from the Tennesse Department of Labor and Workforce Development.

Stay Compliant

As a new LLC in Tennessee, you will need to stay compliant with permits, licenses, taxes, and state filings. This is serious business; failure to comply can lead to fines, tax penalties, and dissolution (the end) of your Tennessee LLC.

Business Licenses and Permits

To operate your Tennessee LLC, you must comply with federal, state, and local government regulations. The details of business licenses and permits vary from state to state, so make sure you research carefully and plan accordingly.

Find out how to obtain necessary licenses and permits for your business or have a professional business licensing service do it for you:

Federal: Use the U.S. Small Business Administration (SBA) guide.

State: Use Tennessee Secretary of State's website.

Local: Contact your local county clerk and ask about local licenses and permits.

Sales Tax

If you are selling a physical product, you’ll typically need to register for a seller's permit through the Tennessee Department of Revenue website.

This certificate allows a business to collect sales tax on taxable sales.

Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.

Here’s a sales tax guide to find out more.

Employer Taxes

If you have employees in Tennessee, you will need to register for Unemployment Insurance Tax through the Tennessee Department of Labor and Workforce Development.

Tennessee LLC Annual Report

Tennessee requires all LLCs to file an annual report. If you miss state filings like the annual report, you could face fines or even automatic dissolution. A quality registered agent service can help protect your assets by keeping track of filing requirements for you.

File online with the Tennessee Secretary of State.

Mail to:

Secretary of State Capitol Office
Attn: Business Filings and Information
312 Rosa L. Parks Avenue
6th Floor
Snodgrass Tower
Nashville, TN 37243-1102

Due Date: Due by the first day of the fourth month following the close of the LLC's fiscal year.

Late Filings: Tennessee does not charge late fees if you miss your filing deadline, but may dissolve or revoke your LLC after 60 days of failing to file an annual report.

Fee: Filing fee is $50 per member with a minimum fee of $300 and a maximum fee of $3,000.

Reduce Administrative Burden

There will be lots of demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go.

Accounting For Your Tennessee LLC

It's important to get your books in order — even if you haven't officially opened for business. A well-managed accounting system will help you:

  • Track your business finances, including bills, expenses, and income.
  • Simplify and file your annual taxes.

You can maintain your accounting in two ways:

  • Use DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
  • Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.

Recommended: For most small businesses, we recommend using a reputable accounting service. Schedule a free tax consultation for your business now to avoid costly errors in the future.

Employee Payroll

If you have employees for your Tennessee LLC, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.

Gusto is a reliable and good payroll service for small businesses.

Need Help Forming an LLC in Tennessee?

Have A Professional Service Form Your Tennessee LLC For You

If you’ve got too much on your agenda to worry about all the paperwork and state-requirements, there are a handful of LLC formation services that can take care of everything for you.

Here are the two most popular:

ZenBusiness ($39 + state fee) = Best Price & Overall Value

LegalZoom ($79 + state fee) = Best For Brand Recognition

Useful Links for your Tennessee LLC