How to Start an LLC in Tennessee

If you're looking to start a business in Tennessee, you can opt to form a limited liability company (LLC). An LLC is a popular business structure that combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. If you're looking to limit your personal liability for business debts and lawsuits, you should consider forming an LLC.

Follow the steps below to form an LLC in Tennessee. (For more on how to form an LLC in any state, see our article on how to start your LLC.)

1. Choose a Name for Your Tennessee LLC

Before you legally create your LLC, you need to pick a business name. Be sure to follow Tennessee's rules for LLC names.

LLC name must be distinguishable. Your LLC's name must be distinguishable from the names of other business entities already on file with the Tennessee Secretary of State (SOS). You can check which business names are available on the SOS's business entities database. (Tenn. Code § 48-249-106 (2024).)

LLC name must include an entity designator. Under Tennessee law, an LLC name must contain the words "limited liability company," the abbreviation "LLC" or "L.L.C.," or comparable words or abbreviations in another language. (Tenn. Code § 48-249-106 (2024).)

Name reservation. You can reserve an available business name for exclusive use for four months by filing an application with the SOS. To reserve a name, file an Application for Name Reservation (Form SS-9425). You can re-reserve the business name after the four-month period. As of 2024, the filing fee is $20. (Tenn. Code § 48-249-107 (2024).)

Using an assumed name. When you register your LLC with the SOS, the name you choose for your LLC on your articles of organization becomes your business's legal name. But you don't have to use your LLC's legal name when doing business in the real world. Instead, you can use an assumed business name, also called a "fictitious business name," "DBA" (short for "doing business as"), or "trade name." In Tennessee, you must register your assumed name with the SOS. As of 2024, the filing fee to register your assumed name is $20. You can file the application online or mail a completed Form SS-4402 to the SOS. (Tenn. Code § 48-249-106 (2024).)

You can find a list of forms and fees on the SOS website.

2. Appoint a Tennessee Registered Agent

Every Tennessee LLC must have an agent for service of process (called a "registered agent") in the state. This agent is an individual or business entity that agrees to accept legal and government papers on the LLC's behalf. For example, a registered agent would be expected to receive and forward court documents to the LLC if someone sues the company.

In Tennessee, a registered agent must be either a:

• Tennessee resident
• domestic corporation
• domestic nonprofit corporation
• domestic LLC
• domestic limited partnership
• domestic registered limited liability partnership, or
• foreign company authorized to do business in Tennessee.

The registered agent must have a physical street address in Tennessee.

(Tenn. Code § 48-249-109 (2024).)

3. File Articles of Organization

You can create a Tennessee LLC by filing Articles of Organization with the SOS. The articles must include:

• the name of the LLC
• the name, street address, and county of the LLC's registered agent
• the street address and county of the LLC's principal office
• a mailing address for the LLC if mail can't be delivered to the principal office address
• a statement as to whether the LLC will be member-managed, manager-managed, or director-managed
• if the LLC has more than six members when the articles are filed, a statement of the number of members the LLC will have
• whether any of the LLC members will be personally liable for the LLC's debts, obligations, and liabilities
• if the LLC will begin on a future date or at the occurrence of a specified event, the future date or a description of that event
• if the LLC won't do business in Tennessee, a statement that the LLC is prohibited from doing business in the state, and
• a date of dissolution, if any.

(Tenn. Code § 48-249-202 (2024).)

You can read more about the different LLC management structures in our article on member-managed vs. manager-managed LLCs.

You can file the Articles of Organization online through the SOS's Business Services Online. You can also submit the articles by mailing or hand-delivering them to the SOS's office. You can either complete and print out the application online through Business Services Online or use the blank Form SS-4270 provided on the SOS website.

As of 2024, the filing fee for the Articles of Organization is $50 per member with a minimum filing fee of $300 and a maximum filing fee of $3,000.

4. Prepare an Operating Agreement

In Tennessee, an LLC can—but isn't required to—create an operating agreement. It's highly recommended that your LLC create an operating agreement and put it in writing. However, you don't need to file this document with the state.

An operating agreement regulates:

• the affairs of the company
• the conduct of the LLC's business, and
• the relationships among the members, managers, directors, officers, and the LLC itself.

(Tenn. Code § 48-249-203 (2024).)

Without an agreement, state LLC law will govern how your LLC operates. Apart from allowing the LLC members to establish their own operating rules for their company, an operating agreement has other advantages. It can help preserve your limited liability by showing that your LLC is truly a separate business entity. In addition, investors and banks typically like to see an LLC's operating agreement when determining whether to invest or loan money to the company.

For help creating an LLC operating agreement, check out Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use our online LLC formation service.

5. Get an EIN and Comply With Other Tax and Regulatory Requirements

Other tax and regulatory requirements might apply to your LLC. For instance, your LLC might need to obtain an EIN, apply for business licenses and permits, and register for business taxes.

EIN. If your LLC has more than one member, it must obtain a federal employer identification number (EIN), even if it has no employees. If you form a single-member LLC, you must obtain an EIN for your LLC only if either you elect to have your business taxed as a corporation instead of a sole proprietorship (disregarded entity) or your single-member LLC has employees. You can get an EIN by completing an online EIN application on the IRS website. There's no filing fee.

Business licenses. Tennessee requires most businesses to get a general business license. The type of business you need will depend on your gross sales. You must contact your county clerk to obtain your required business license. Depending on your LLC's business activities and locations, you might need to obtain other local and state business licenses or permits. For further guidance on regulatory requirements for your business, read how to get a small business license in Tennessee.

Tennessee Department of Revenue. You'll need to register your LLC with the Tennessee Department of Revenue (DOR) to file and pay taxes. You can register your business online through TNTAP. Your LLC will need to pay franchise and excise taxes. You might also be responsible for Tennessee's business tax, gross receipts tax, sales and use tax, and employer taxes, among other taxes. For more information on Tennessee LLC tax registration, check out the LLC annual report and tax filing requirements in Tennessee.

FAQ About Tennessee LLCs

Here are some other questions you might have about your Tennessee LLC.

• Should I form an LLC in Tennessee?
• How much does it cost to form an LLC in Tennessee?
• Do I need to submit an annual report for my LLC in Tennessee?
• Are there any other maintenance requirements for Tennessee?
• Do I need an operating agreement for my Tennessee LLC?
• Do I need a business license in Tennessee?
• Can a foreign LLC do business in Tennessee?
• Can I form a single-member LLC in Tennessee?
• Can I form a professional LLC in Tennessee?
• How do I dissolve my LLC when I'm done?

Should I form an LLC in Tennessee?

If you're just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business.

To learn more about LLCs and decide if it's the right business structure for you, see our article on LLC basics.

How much does it cost to form an LLC in Tennessee?

Below are the fees (as of 2024) you might need to pay to form your LLC in Tennessee:

• The SOS charges $50 per LLC member to file the Articles of Organization. The minimum filing fee is $300 and the maximum filing fee is $3,000.
• You can reserve your LLC name with the SOS for $20.

Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but it will often cost you hundreds, if not thousands, of dollars in the process. If you'd like help completing all the filings, try our online LLC formation service.

To learn more about the costs associated with forming and running an LLC, see our article on how much it costs to form an LLC.

Do I need to submit an annual report for my LLC in Tennessee?

All LLCs doing business in Tennessee must file an annual report with the SOS. The report is due each year on or before the first day of the fourth month following the LLC's fiscal year closing. For example, if your LLC's fiscal year is the calendar year, the report is due by April 1. (Tenn. Code § 48-228-203 (2024).)

You can file your LLC annual report online using the SOS's Business Services Online. You can also print out the report you prepare online and mail it to the SOS. As of 2024, the fee to file an annual report is $50 per member with a minimum filing fee of $300 and a maximum fee of $3,000.

Are there any other maintenance requirements for LLCs?

Yes. LLCs must file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury. You must file your BOI report online through FinCEN's BOI E-Filing System.

For more details about this reporting requirement, read our guide to the 2024 FinCEN BOI report.

In addition to submitting your LLC annual report, you'll likely need to keep up with local, state, and federal reports and taxes. You can get legal help with your legal and tax obligations from a Tennessee business attorney.

Do I need an operating agreement for my Tennessee LLC?

You're not required to have an operating agreement in Tennessee. But it's highly advantageous to have this foundational document. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default.

Do I need a business license in Tennessee?

Your LLC will most likely need a business license in Tennessee. Unless your LLC will make less than $3,000 in gross annual sales, you'll need to obtain a license from your county clerk where your business is located. You'll be required to obtain one of two licenses depending on your business's annual gross sales:

• a minimum activity license (if your LLC will make between $3,000 and $100,000 in gross sales), or
• a standard business license (if your LLC will make more than $100,000 in gross sales).

Each business license costs $15. You might need to obtain other licenses, registrations, and permits at the local, state, or federal levels. For example, you might need to apply for a professional license with the state or a certificate of occupancy with the city.

For state license information, check out Tennessee SmartStart. You can also find more information in our article on how to get a small business license in Tennessee.

Can a foreign LLC do business in Tennessee?

To do business in Tennessee, all LLCs organized outside of the state (called "foreign LLCs") must register with the SOS. Foreign LLCs must appoint a registered agent for service of process physically located in Tennessee.

To register your foreign LLC, file an Application for Certificate of Authority (Form SS-4233). The minimum fee is $300, and the maximum fee is $3,000. The completed application must be accompanied by a certificate of legal existence or good standing from the foreign LLC's home state issued not more than two months before the application is filed.

You can file the application online through the SOS's Business Services Online or by mail. As of 2024, the filing fee is $50 per LLC member.

Before filing the application, make sure the LLC's name is available in Tennessee by checking the Tennessee business name database. If your LLC's name isn't available, your LLC must register or adopt an alternative available name.

(Tenn. Code §§ 48-249-901 and following (2024).)

See our guide to qualifying to do business outside your state for more information.

Can I form a single-member LLC in Tennessee?

Yes. For most formation purposes, a Tennessee single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Tennessee are generally the same as those listed above.

Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see our article on how single-member LLCs pay federal income tax.

Can I form a professional LLC in Tennessee?

Yes. If you provide a licensed professional service in Tennessee and want to form an LLC, you can form a professional LLC (PLLC). Examples of providers of professional services include architects, dentists, nurses, certified public accountants, and more. Generally, if you provide a service that requires you to be licensed by the state, then you provide a professional service.

Only licensed professionals are allowed to provide professional services under your PLLC. Unless your licensing authority allows you to have unlicensed members, all LLC members (including individuals and businesses) must be licensed or authorized to provide the service provided in your articles of organization.

Your PLLC's name must include one of the following designations:

• "professional limited company"
• "professional limited liability company"
• "professional LLC"
• "limited liability professional company," or
• the following abbreviations with or without punctuation: "PLC," "PLLC," or "LLPC."

(Tenn. Code §§ 48-249-1101 and following (2024).)

How do I dissolve my LLC when I'm done?

When you're ready to close your business, you should legally dissolve your LLC to limit your liability for lawsuits and government fees. To dissolve an LLC in Tennessee, you should:

• have a majority of the LLC members vote in favor of the dissolution (or another occurrence listed in your operating agreement must happen)
• discharge and settle the LLC's debts, obligations, and other liabilities
• settle and close the LLC's activities
• distribute the company's remaining assets
• provide notice of the dissolution to the SOS, and
• file Articles of Termination with and pay the required fee to the SOS.

(Tenn. Code §§ 48-249-601 and following (2024).)

You also need to close your tax accounts and take any other steps necessary to close out your business. See our article on what you need to do when closing your business for more in-depth information and guidance.