Tennessee LLC Filing Requirements

An LLC is a business structure that combines the liability protections of a corporation with the ease of management of a partnership. Tennessee treats LLCs as pass-through tax entities, meaning that the entity itself does not pay income taxes; instead, profits and losses are passed through to individual members, who report them on their individual income tax returns. In addition, LLCs that manufacture, sell, rent, or lease tangible personal property or offer taxable services must register and pay sales and use tax in Tennessee. The Department of Revenue’s Franchise and Excise Tax Manual provides details about the state’s tax rates, credits, and exemptions.

All Tennessee LLCs and foreign LLCs authorized to do business in the state must file an annual report with the Secretary of State. The fee is $50 per member, and the report must include the registered agent’s name, address, and phone number. The filing deadline is the first day of the fourth month following the LLC’s fiscal year closing.

How to Form an LLC in Tennessee?

Forming an LLC in Tennessee involves a few steps:

Choose a Business Name: Pick a unique name for your LLC that complies with Tennessee naming regulations. You can also reserve your chosen name for a limited time if needed.

Select a Registered Agent: All Tennessee LLCs must designate a registered agent who maintains a physical address in the state. This can be you or another member of the LLC, or a commercial registered agent service. The registered agent must be available during normal business hours to receive legal documents and notices.

File Articles of Organization: File the Articles of Organization (Form SS-4270) with the Tennessee Secretary of State. This document establishes your LLC and includes details like your business name, registered agent, and management structure. There’s a filing fee associated with this, with a minimum of $300 and a maximum of $3,000.

Create an Operating Agreement (Optional but Recommended): This internal document outlines ownership, profit-sharing, voting rights, and other operational aspects of your LLC. While not mandatory in Tennessee, having one for clear communication and resolving future disputes is highly advisable.

Obtain an Employer Identification Number (EIN): If you plan on hiring employees or opening a business bank account, you’ll need an EIN from the IRS. This federal tax ID number is free to apply for online.

Tennessee LLCs Franchise and Excise Tax?

In addition to an EIN, Tennessee LLCs must file a state franchise and excise tax. The franchise tax is based on the LLC’s net worth or the book value of its real and tangible property in the state, while the excise tax is based on the LLC’s gross receipts or income for the tax year. The LLC must also register for and collect state unemployment insurance taxes if it has employees. The IRS offers help and guidance for small business owners registering and paying these taxes.