Form a Tennessee LLC
Ready to start your limited liability company? Transform your organization into a legal business entity in three easy steps today with LegalZoom. As an LLC, you'll gain the ability to protect your personal assets from financial risk and enjoy the benefits of a corporation with fewer formalities. We'll help you choose how you want to organize your LLC and walk you through the whole process.
When you form your Tennessee LLC, with LegalZoom, we prepare and file your articles of organization with the Tennessee Secretary of State. We also conduct a name search for your Tennessee LLC to assist you in the preparation of your operating agreement and other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your Tennessee LLC begins its existence as a legal business entity.
LegalZoom LLC Overview
Registering a Limited Liability Company Name: Choosing a business name is one of the first steps in the process of forming your Tennessee Limited Liability Company. The name that you choose:
Must contain, as the last words of the name, "limited liability company" or "L.L.C." or "LLC"
Must not contain the word "corporation" or "incorporated" or an abbreviation of either words
Must not contain language stating or implying that the LLC is organized for any unlawful purpose
May not contain language stating or implying that the LLC transacts or has the power to transact any business without actual authorization
May not contain language stating or implying that the LLC is organized as, affiliated with, or sponsored by, any fraternal, veterans', service, religious, charitable, or professional organization, unless that fact is certified in writing by the organization with which affiliation or sponsorship is claimed
May not contain language stating or implying that the LLC is an agency or instrumentality of, affiliated with or sponsored by the United States or any state thereof or a subdivision or agency thereof, unless such fact is certified in writing by the appropriate official of the United States or the state or subdivision or agency thereof
Must be distinguishable from the names of any Tennessee Limited Liability Company, corporation, or LLP authorized to do business in this state
Must be distinguishable from any Tennessee Limited Liability Company, corporate, or LLP name reserved or registered
Must be distinguishable from the name of a not-for-profit corporation authorized to transact business in this state
LegalZoom allow you to choose up to 3 names, in order of preference. We will conduct a name check before filing to see which names are available.
Registering a Name: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Articles of organization: In any Tennessee LLC formation process, articles of organization must be signed and delivered to the Secretary of State. State law requires that certain information be included in your articles of organization during the Tennessee LLC formation process. This information must include:
The company name
The street address, zip code and county of the registered office and the name of registered agent at that office;
The name and address of each organizer
A statement as to whether one or more members are personally liable for the debts of the LLC
A statement as to whether the LLC will be board-managed or member-managed
The number of members at the date of the filing of the articles
If the LLC is board-managed, and dissolution events may be triggered by an action approved by the governors or a subset of the governors and/or that transfers of governance rights may be permitted only by consent of the governors or a subset of the governors, either of such provision(s) must be set forth in the articles or the articles must contain a statement that the operating agreement may so provide
If the LLC's existence is to begin at a future date or because of a specific event, the articles must state the future date or describe the happening of the specific event neither of which can be more than 90 days from filing
The street address, zip code, and county of the principal executive office of the LLC
If the LLC has the power to expel a member, a statement that such power exists
The period of the LLC's duration (this period may be perpetual or for a set amount of time)
A statement that members or parties have pre-emptive rights
If the LLC, although under Tennessee law, is not to engage in business in Tennessee, a statement prohibiting the LLC from engaging in business in Tennessee
May contain a grant of authority to one (1) 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
Filing: Your LLC is considered organized once the original articles of organization and one duplicate or conformed copy is delivered to the Secretary of State by one or more persons. The document must contain a statement which makes it clear that it is being filed pursuant to the Tennessee Limited Liability Company Act.
A filed document must be executed by an organizer if the LLC has not yet been formed or the directors or board have not been selected or by a fiduciary if the LLC is the hands of a receiver, trustee or other court appointed fiduciary. If the LLC has been formed or the directors or board has been selected, a filed document must be executed by the chair of the board of directors, by its president or other authorized manager if an LLC action is taken, by a general partner if partnership action is taken or by equivalent person of another business entity.
The filed document must include a signature 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 the title (capacity) of the person signing the document.
The document may contain:
An attestation by the secretary or an assistant secretary;
An acknowledgment, verification, or proof; or
The date the document is signed, except that such date shall be required for the annual report for the secretary of state.
Additionally, the Tennessee LLC formation procedure generally requires inclusion and/or consideration of the following:
Operating agreement:: Although not required, LLC member may adopt an operating agreement to regulate the internal affairs of the company, which may be amended or repealed as allowed by the agreement or applicable law.
Membership: A limited liability company must have one or more members. Requirements:
Minimum Number of Members: One or more
Eligibility Requirements: Natural person or Entity
Procedure for Membership: A member may acquire an interest in the LLC upon the approval of all members or board of governors (as determined by the LLC) as to the new person or entity, the interest and the contribution and in accordance with the operating agreement or articles of organization.
Resignation of Membership: Certain prohibitions exist surrounding the ability of a member to resign from the company.
For LLCs formed prior to July 1, 1999, if the member events are eliminated as cause for dissolution in the operating agreement or articles, a withdrawal or termination shall be deemed wrongful.
If a member resigns or withdraws wrongfully:
o The member forfeits governance rights in the winding up, termination process or continued business
o The member is only entitled to receive the lesser of the fair market value of the member's interest but if the LLC terminates, the member is entitled to receive the member's distribution
o The member is entitled to his distribution or interest within 6 months of withdrawal
o The member is liable to all other members and the LLC for damages caused by the wrongful withdrawal
Contribution: The contribution of a member to a limited liability company may be in cash, property, or services rendered or a promissory note.
Registered Agent In Tennessee
LegalZoom can also provide your business with a registered agent in Tennessee. Every LLC must continuously maintain a registered agent in Tennessee. A registered agent in Tennessee is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit.
Eligibility Requirements: The registered agent may be an individual who resides in this state, a domestic corporation, a not-for-profit domestic corporation, an LLC, or a foreign corporation, not-for-profit foreign corporation, or foreign LLC authorized to transact business in this state. The registered agent must maintain a business office that is identical with the registered office.
Registered Office: The registered office may be the LLC's place of business.
Tennessee Secretary of State
Once a Tennessee LLC has been created, the Tennessee Secretary of State will require certain recurring responsibilities and duties. The most important of these are explained below. For further information, refer to the Tennessee Secretary of State office.
Records: Each limited liability company shall keep the following records open to inspection at its office if it is board managed:
A current list of the full name and last-known business, residence, or mailing address of the chief manager, secretary and each member and governor;
A current list of the full name and last-known business, residence, or mailing address of each assignee of financial rights and a description of the rights assigned;
A copy of the articles and all amendments to the articles;
Copies of the currently effective operating agreement and/or any agreements concerning classes or series of membership interests;
Copies of the LLC's federal, state, and local income tax returns and reports, if any, for the three (3) most recent years
Financial statements and accounting records of the LLC
Records of all proceedings of members, if any
Any written consents obtained from members
Records of all proceedings of the board of governors for the last three (3) years
A statement of all contributions, identity of the contribution and the agreed value of the contribution
A copy of all contribution agreements and contribution allowance agreements
A copy of the LLC's most recent annual report delivered to the secretary of state
If it is member-managed:
All above records except those relating to the board of governors, identity of governors & their actions
Financial information sufficient to provide true and full information regarding the status of the business and financial condition of the LLC.
Acts Triggering Dissolution: A limited liability company is dissolved upon the happening of any one of the following events:
When the company expires (according to the time fixed in the articles of organization)
By action of the organizers or members specified in the articles of organization or operating agreement
Event specified in the articles of organization or operating agreement
Action by the Secretary of State
For LLCs created before July 1, 1999, the following events will act as dissolving events unless the articles or operating agreement state otherwise:
o Death, Retirement, or Insanity of a member
o Resignation or Withdrawal of a member
o Acquisition of a member's complete membership interest by the LLC
o Assignment of a member's governance rights
o Dissolution or Expulsion of a member
o Bankruptcy of a member
o Any other event that terminates the members of a member in the LLC
For LLCs formed after July 1, 1999, the LLC is dissolved upon the happening of the following events:
o Events of Withdrawal by member
o Procedure stated in the articles or operating agreement
o A merger in which the LLC is not the surviving organization
The LLC may avoid dissolution when a member leaves the LLC, if within 90 days, there is at least one (1) remaining member and the remaining member or members agree to continue the business by a majority vote or vote provided in the articles
A LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, a LLC is not required to be a separate tax entity like a corporation; instead it can be a "pass-through entity" so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
Federal Income Tax: Unless you elect to tax the LLC as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
State Income Tax: The LLC tax rate for Tennessee is variable, based on Tennessee taxable net income.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so.
Filings must be made with the Tennessee Secretary of State along with the appropriate filing fee. When appropriate a check must accompany the document payable to the State of Tennessee, covering all charges for the Department of Commerce.