Tennessee LLC

Tennessee LLC

Form a Tennessee LLC

At LawInc, we keep things simple and allow you to easily form your Tennessee (TN) Limited Liability Company online or over the phone (800-989-5294).

Tennessee LLC formation is simple with LawInc.com. Once you submit your application, we check name availability, prepare your Articles of Organization and file your paperwork with the Tennessee Secretary of State. As soon as your Tennessee LLC is formed, we forward you your final paperwork.

A Tennessee LLC can help protect your personal assets, such as your home, car or family savings. In the event of a lawsuit or if your business should fail, your personal assets cannot be touched, assuming you have properly formed, capitalized and maintained your LLC. This limited liability feature of a Tennessee LLCs is not available in a sole proprietorship or general partnership, where the business owners are personally liable for all business debts.

Let LawInc walk you through the Tennessee Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.

Tennessee LLC Name

The first step in forming a Tennessee Limited Liability Company (LLC) is selecting the business name. Tennessee LLC names:

  • Must contain, limited liability company, or limited company, or the abbreviation, L.L.C., LLC, L.C., or LC. Limited may be abbreviated as Ltd. And company may be abbreviated as Co.
  • Muse be distinguishable upon the records of the secretary of state from the name of any corporation, limited partnership, or company incorporated, organized or authorized to transact business, in this state; a name reserved or registered; and a fictitious name approved for a foreign company authorized to transact business in this state because its real name is unavailable.

An available Tennessee LLC name may be reserved for 120 days.

LawInc.com permits you to choose up to three names and will conduct a name search for your Tennessee LLC, prior to filing.

Tennessee LLC Formation

Tennessee LLC Filing Procedure: When forming a Tennessee LLC, the Tennessee Articles of Organization must be filed with the Tennessee Secretary of State. The Tennessee Articles of Organization must state:

  • The Tennessee LLC name.
  • Name and address of each Tennessee LLC organizer.
  • Street address of Tennessee registered agent.
  • Street address of principle place of business.

Tennessee LLC Organizers: An Tennessee limited liability company can be formed by one (1) or more organizers.

Tennessee LLC Members: Tennessee LLCs require 1 or more members. There is no residence or age requirement. Tennessee LLC members are not required to be listed in the Articles of Organization.

Tennessee LLC Duration: The period of duration of a limited liability company shall be perpetual unless the Tennessee Articles of Organization place a limitation on the company’s existence or until dissolution or termination.

Tennessee LLC Purpose: A Tennessee Limited Liability Company may be formed to transact any or all lawful businesses for which LLCs may be organized under the Law, except the business of banking or insurance.

Tennessee Registered Agent: An Tennessee LLC must maintain a registered agent and office to receive service of process in Tennessee. The Tennessee registered agent should be available, at an Tennessee physical address, during normal business hours to accept important legal and tax documents on behalf of the Tennessee LLC. The registered agent can either be (1) a domestic entity or a foreign entity that is registered to do business in Tennessee or (2) an individual resident of the state. A Tennessee LLC may not act as its own agent.

Tennessee LLC Operating Agreement: After filing, it is highly advised that an operating agreement is drafted which dictates the LLC internal affairs and management. There is no set criteria, but an Tennessee LLC operating agreement should reference how the Tennessee LLC is managed, allocation of profits and losses and member capital contributions. The Tennessee LLC operating agreement does not need to be filed.

Tennessee LLC Post-Filing Requirements

Tennessee LLC Annual Report: Tennessee LLCs are required to file annual reports on April 1st, or on the first day of the 4th month after the close of the accounting year. To file your Tennessee LLC annual report online, visit: http://tnbear.tn.gov/Ecommerce/AnnualReportInstr.aspx

Tennessee LLC Taxes

Tennessee State Income Tax: The LLC tax rate for Tennessee is variable, depending on Tennessee taxable net income.

Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:

  • Sole proprietorship
  • Partnership, or
  • Corporation.

Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on Tennessee LLC net income must be paid just as you would with any self-employment business.

Most Tennessee multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, Tennessee LLC profits are reported and allocated to each of the owners according to the Tennessee LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all Tennessee LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.

If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election. Additionally, an LLC can be taxed like an S corporation by filing IRS Form 2553.

Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. An EIN is typically required if the Tennessee LLC has more than one owner or any employees.

Tennessee LLC Dissolution/Cancellation

Tennessee LLC Dissolution/Cancellation: In order to dissolve or cancel an Tennessee LLC, the members or managers must file Articles of Termination with the Tennessee Secretary of State.

Acts Triggering Tennessee LLC Dissolution: A Tennessee LLC can be dissolved upon the happening of one of the following:

  • At a time specified in the Articles of Organization or operating agreement;
  • Upon occurrence of events specified in the Articles of Organization or operating agreement;
  • Consent by the specific number or percentage of members indicated in the operating agreement;
  • At any time there are no members; or
  • Judicial decree to dissolve by a Court