Becoming an LLC in Tennessee can be quite expensive. It’s not difficult, but it’s one of the states with the highest filing fees every year. LLC means Limited Liability Company, and it’s highly beneficial to consider doing business as an LLC in Tennessee. This allows you to forgo personal liability for any financial issues your business faces. Your business runs much like a sole proprietorship, but you get to reap the financial and legal benefits of a corporation. Most all the paperwork required to become an LLC in Tennessee can be filed online to ensure you are able to finalize your registration as soon as possible. All the forms you need to register your business as an LLC are available on the Tennessee Secretary of State website.
Naming Your LLC
It’s not a challenge to name your business, but it’s a challenge to register your name if it’s already in use. No one can register an LLC using a name already in use by another registered entity. If the name of your business is already in use, you have to choose another. The Secretary of State’s website proves a business name database that allows all future LLCs to check their name for registration. If it’s available, you must spend $20 to file a reservation for your name. This reservation is good for four months, and it allows you time to file the rest of your paperwork to become a registered LLC. It must be filed by mail, which is a problem for some. It’s suggested you do this as soon as possible to avoid the problem of another business registering with your name before you.
Filing Required LLC Paperwork
Once your name reservation is approved, it’s time to find a registered agent. This is the person or business who is legally responsible for any legal issues thrown your way as a business. If a lawsuit is filed, this person or business will accept it and work with you to handle the situation. This person cannot be affiliated with your business in any other capacity. Once you have a registered agent, it’s time to file your Articles of Organization in Tennessee. You must file with the appropriate information:
- Name of your LLC
- Address of your LLC
- Name of your registered agent
- Address of your registered agent
- The duration of your LLC
- Information discussing whether your LLC is member or manager managed
- Filing Fees
LLC filing fees in Tennessee can be very expensive. The minimum filing fee is $300, but it can be as high as $3,000. You will pay at least $300, and then you will pay another $50 for every member of the LLC up to $3,000. If you file online and pay by credit card, you’ll also pay a credit card fee for convenience. This entire process is easily filed online, but it’s more expensive. This sometimes encourages people to file this paperwork by mail.
Understanding LLC Tax Laws
Every state requires business to handle their own tax obligations. In Tennessee, you are required to know what tax laws are associated with the type of business you open. You need to know whether or not you need an Employer Identification Number, and you have to file for it with the IRS. All businesses must obtain the proper licenses, which depend on the type of business you run as well as your location. If you sell goods, you must register your business with the Tennessee Department of Revenue.
Once you become a registered LLC in Tennessee, you become responsible for filing annual reports. You’ll file this report no later than four months after the close of your business year every year. The fee is a minimum of $300, but it’s $50 for every registered member up to $3,000. It’s one of the most expensive states in which to register an LLC.
Becoming a registered LLC in Tennessee is a good idea for anyone looking to protect their personal assets from their business liabilities, but it’s expensive. The biggest challenge in forming an LLC in Tennessee is often filing the fees. It’s too expensive for some, and that might deter people from forming an LLC.