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Form an LLC in Tennessee.

$49 + State Fee & 1st Year FREE Registered Agent

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Your LLC’s Name

The name of your new Tennessee LLC must be easy to distinguish from any other business entity’s name registered or reserved with the state, including nonprofit organizations.

Your new LLC’s name must end with the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” The word “Limited” may be abbreviated as “Ltd.” and the word “Company” may be abbreviated as “Co.” Your new LLC’s name may not, however, include the words “corporation” or “incorporated.” It also may not include language that state or implies that:

  • The LLC is organized for any illegal or unlawful purpose
  • The LLC conducts or has the power to conduct any business without actual authorization
  • The LLC is connected with any fraternal, veterans,’ service, religious, charitable, or professional organization, unless certified in writing by the organization
  • The LLC is an agency of or affiliated with ay government agency unless certified in writing

An available LLC name may be reserved for four months for a $20 fee.

Articles of Organization

The formation of a Tennessee LLC means that you have to file articles of organization (along with the $125 filing fee) with the Business Services Division of the Tennessee Department of State. The articles, which must be signed by at least two persons organizing the LLC, must include:

  • The LLC’s name
  • The address of the LLC’s registered office
  • The name of the LLC’s initial registered agent there
  • The names and addresses of the organizer(s)
  • Whether one or more members are personally liable for the LLC’s debts
  • Whether the LLC will be member-managed or board-managed
  • The number of members on the date the articles are filed
  • Whether the LLC’s dissolution can be triggered by action by all or some of the board of governors
  • Whether and how board governance rights can be transferred
  • Whether the LLC will begin when the articles or filed or on a future date (cannot be more than 90 days from the filing date)
  • The street address (including county) of the LLC’s principal executive office
  • Whether the LLC has the power to expel a member
  • The period of the LLC’s duration (may be perpetual or for a specified time period)
  • Whether members or other parties have preemptive rights

The filed articles must be signed by a member, manager, organizer, or fiduciary (if the LLC is the hands of a receiver, trustee, or other court-appointed fiduciary) and indicate the name and title of the person signing the document.

Your new LLC is officially “organized” once the original articles of organization and one duplicate or conformed copy is delivered to the Secretary of State by one or more organizers. The articles must contain a statement which makes it clear that it is being filed pursuant to the Tennessee Limited Liability Company Act.

The articles must be executed (signed) by an organizer if the LLC has not yet been formed, or if the directors or board have not yet been selected. If the LLC has already been formed, or if the directors or board have been selected, a filed document must be executed by the chair of the board of directors, or by its president or other authorized manager if an LLC action is taken.

The articles may also include a grant of authority to one or more members, managers, or governors to execute instruments for the transfer of real property, and any restrictions and conditions with respect to such authority

Registered Agent and Office

Tennessee LLCs have to continuously maintain both a registered agent and registered office in the state—the person or office designated to receive official state legal and administrative correspondence. An LLC registered agent may be an individual who resides in Tennessee or a business entity authorized to conduct business there. The registered agent’s business office must be the same as the corporation’s registered office.

The registered office may be—but doesn’t have to be—the LLC’s place of business.

Operating Agreement

The LLC’s next most critical document is its operating agreement. Having an operating agreement is not officially required by the state, but it’s a very important internal document that sets forth how the LLC will run. The operating agreement should list the LLC’s members, how much each one has invested, how any profits will be distributed, and how much relative weight each member has when voting. It can be amended or repealed as specified in the agreement itself or by state law.

The operating agreement can also include requirements for meetings (notice, quorum, voting rules, etc.) and similar functions, but it doesn’t have to. Often, however, it does include operating constraints and allowances that are already contained in state law and regulations. It also may contain constraints on the members’ authority to change or repeal the operating agreement or any provision thereof.

Membership in the LLC

A Tennessee LLC must have at least one member, who may be a natural person or a business entity. Members may acquire an interest in the LLC either in proportion to their contribution or in some other way that is in accordance with the LLC’s operating agreement or articles of organization.

The contributions of a member to the LLC may consist of cash, property, services rendered, or a binding obligation (such as a promissory note) to make these kinds of contributions in the future.

An LLC member may not resign except in accordance with the operating agreement or articles of organization, or his or her resignation is considered “wrongful.” If a member resigns or withdraws wrongfully, that member forfeits governance rights in the continued operation or the termination process of the LLC. The withdrawing member is only entitled to receive the lesser of the fair market value or the original contribution of the member’s interest—but if the LLC terminates, the member is entitled to receive his or her distribution. In either case, the member is entitled to his distribution or interest within six months of withdrawal, and the member is liable to the LLC and all its remaining members for any damages caused by the wrongful withdrawal.

Tennessee has an unusual statutory structure and naming convention for LLC management. As in other states, Tennessee state law allows for management of the LLC by all members. However, member-managed (and other) LLCs are expected to fill at least two “manager”: positions (which must be held by two separate individuals): a chief manager and a secretary. In reality, these are officer—not manager—positions.

The chief manager functions as LLC president and is responsible for insuring that management orders are executed—a common CEO day-to-day responsibility. The secretary is charged with maintaining the records of the LLC—again, a typical officer job.

The person(s) who can be chosen instead of the members to manage the LLC are not called managers, but “governors,” who are selected to serve on the board of governors.

Most smaller LLCs opt for member management.

Ongoing Requirements

All board-governed Tennessee LLCs must keep the following types of records open and available for inspection at its main office:

  • Names and addresses of the chief manager, secretary, and all members and governors
  • Names and addresses of each assignee of financial rights, and a description of the rights assigned for each
  • A copy of the articles of organization and any amendments
  • A copy of the operating agreement and any agreements about membership interests
  • Copies of the LLC’s federal, state, and local income tax returns for the past three years
  • The LLC’s financial statements and accounting records
  • Records of all members proceedings (if any)
  • Any written consents or agreements from members
  • Records of all board of governor proceedings for the past three years
  • A list of all contributions, who gave them, and their consensus value
  • The LLC’s most recent annual report to the Tennessee Secretary of State

If the LLC is member-managed, the same records are required as if the LLC is board-governed, except for those items relating to governors. The member-managed LLC must also keep available financial information about the status of the business and the LLC’s financial condition.

Dissolution

A Tennessee LLC is dissolved when any one of the following events occurs:

  • When the time for expiration specified in the articles of organization arrives
  • By agreement of the organizers or members as laid out in the articles of organization or operating agreement
  • An event specified in the articles of organization or operating agreement
  • A court order mandating dissolution
  • Action by the Tennessee Secretary of State
  • Withdrawal by a member
  • A merger in which the LLC is not the surviving organization

The LLC may prevent dissolution when a member leaves the LLC if, within 90 days, there is at least one remaining member, and the remaining member(s) agree to continue the business by a majority vote or a percentage provided in the articles of organization.

Taxes

An LLC by its nature offers some specific advantages over a corporation’s organizational structure, especially when it comes to taxes. This includes access to more deductions, since the LLC is not required to be a separate tax entity like a corporation. Instead, it is considered a “pass-through” entity for tax purposes, meaning that LLC owners report business profits and losses on their individual tax returns.

The Tennessee individual income tax rate is six percent of eligible income.

Learn more about forming an LLC in Tennessee

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silver

$49

+ $308 (state fee)

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The Basics To Get You Started Preliminary company name clearance and filing of Articles of Organization.

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$149

+ $308 (state fee)

everything from silver+

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EIN / Tax ID Number Providing an EIN is required to open a
business bank account and is required to
file business tax returns.

Personalized Operating Agreement Includes most common provisions to protect members from liability

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Platinum

$299

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everything from
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Expedited Filing Expedited processing speeds the turn- around time for your order.

Customized LLC Kit Personalized slip binder and embossed seal with your company name and date of fomation.

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Commonly Asked Questions For Starting a Tennessee LLC

How is an LLC Taxed?
For federal income tax purposes the profits of an LLC (Limited Liability Company) "pass through" to the personal income of the members/owners. In the case of a single member LLC it is taxed the same as a sole proprietorship (i.e. typically filed on the schedule C of the owner's personal income tax filing). In the case of a multi member member it is taxed the same as a partnership (i.e. a 1065 partnership return is filed with the IRS, with a schedule K-1 being supplied to each partner/member showing the proportional profit/loss allocated to them, with this being filed on the schedule C or E).
NOTE: These are general tax explanations and may not apply to everyone. You should confer with the appropriate accounting/tax specialists to make sure you understand your personal tax liability.
What is the Management Structure of an LLC?
An LLC is typically managed by its members/owners (referred to as member-managed). In that respect an LLC is unlike a corporation, which has a much more rigid and defined management structure, including directors and officers. All owners of the LLC are typically referred to as members, and they can have control and voting interest proportional to their ownership interest, or in proportions different from their ownership interest; however the members agree.
Are Non-US Residents allowed to own a Corporation of LLC?
There are no citizenship or residence requirements for ownership of a C Corporation or an LLC. The S Corporation however does not allow nonresident aliens to be shareholders (owner), but any US citizen or resident alien may be a shareholder (owner). You would, of course, require an in state street address for the state to forward official legal and tax correspondence including service of process, known as the registered agent address, but neither residency nor citizenship is required for ownership of a C Corporation or an LLC.
Can I form an LLC with just one member?
There was a time when almost every state required the LLC to have two or more members, but that is no longer the case. This important change came in response to revised IRS regulations that clearly permitted single-member LLCs. As a result, in most states, if you plan to be the sole owner of a business and you wish to limit your personal liability, you can choose between forming a corporation or an LLC.
What is an Operating Agreement?
The operating agreement is akin to a partnership agreement for a General Partnership or Limited Liability Partnership (LLP). It is an internal contract amongst the members/owners of the LLC, and it lays out such things as ownership interest, member responsibilities, accounting method, adding or removing members, terms for concluding the LLC, etc. It is generally not required by a given state for forming an LLC (with the exception of New York), although it is certainly recommended. When dealing with private companies for financing issues (loans, mortgages, etc.) it may be required by that company. A customizable operating agreement is included with the LLC/Corp Kit.
Can another business entity be a member of an LLC?

In the majority of states, The members of an LLC can be individuals, corporations, or other LLCs. These members of the LLC can be out of state residents or even foreign nationals. Furthermore there is no limit to the amount of members that an LLC can have.

The flexibility of an LLC in contrast to an S Corporation is stark considering the S corporations are limited to 75 shareholders who must either be United States citizens or Lawful Permanent Residents.

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