Choosing to start a new company is both exhilarating and terrifying. It’s the first of many choices you’ll have to make along the path. Depending on where you reside, you may need to register your company at the state, municipal, and federal levels. This tutorial will lead you through the steps of registering your Tennessee company.
Tennessee Business Registration
Table of Contents
1. Give Your Tennessee Business a Name
Naming a new company may be a difficult job for many people. The name should be memorable, letting people know what you have to offer. A strong name, on the other hand, is much more than that. It is a branding tool that provides an inside peek into your organization’s purpose and future goals. The correct name may help you set yourself up for long-term success; the wrong name can destroy a ship before it ever sets sail.
Considering Your Name
While many entrepreneurs are inclined to speed through the name process, you should take your time and investigate all naming options. Take multiple brainstorming sessions and utilize the free internet business tools available today to assist you come up with a variety of choices, narrowing them down as you go.
Our company name generator is a fantastic, industry-specific brainstorming tool that will not only help you come up with the right name, but will also verify domain name availability for you. If you’re still unsure where to begin, our name guide may help you establish your brand and provides practical recommendations for brainstorming sessions.
Tennessee Name Lookup
To ensure that your name is unique inside the state, use the Tennessee Secretary of State’s business information search tool and the business name availability search tool. You should also make sure that your name isn’t too similar to any existing firm in your state. This will assist to prevent future misunderstanding and legal problems.
It’s time to start legitimizing your firm once you’ve chosen a name that appropriately portrays your brand. These following procedures will differ based on your company structure and the legal requirements of your state. The next section will go through the various company structures.
2. Select a Business Structure for Your Tennessee Company
Now that you’ve picked a good name for your brand, it’s time to start the legalization process. Before you begin the registration procedure, you must decide which company structure is appropriate for you. Each has its own set of perks, drawbacks, and tax advantages.
The sole proprietorship
A single proprietorship is the simplest straightforward business form. This informal corporation was created for entrepreneurs who do not want to work with others. It provides no personal asset protection and does not need state filing.
If you choose this entity, your company will run under your surname. If you wish to register a DBA in Tennessee, you must file in each county where you conduct business. This implies that the prices and processes for renewal differ from county to county. For a complete list of county clerk contact information, go to the Department of Revenue’s website.
Partnership
A general partnership, like a sole proprietorship, is an informal structure established for entrepreneurs who form a partnership with at least one other person. You and your partners’ surnames may be used for the firm, or you can get a DBA name. Profits and losses would be reported on your (and your partners’) personal tax return, and no personal assets would be protected.
All partnerships (including general partnerships, limited partnerships, and limited liability partnerships) in Tennessee are required to submit formal documentation with the state, along with a filing fee.
LLC
If you do not intend to go public in the foreseeable future, a limited liability corporation (LLC) may be the best option. It provides more freedom and protects your personal assets in the case of a lawsuit.
The state of Tennessee requires all LLCs to choose a registered agent who will receive legal papers on their behalf. Your registered agent must be a qualified Tennessee citizen or a company allowed to do business in Tennessee. Many new LLCs choose to use a registered agent service, which costs between $29 and $300 each year.
Tennessee also needs you to follow particular name rules and submit the Articles of Organization, which include important information about your business.
Corporation
A corporation is a kind of business entity for those who have (or want to have) shareholders. So, if you want to go public in the future, this may be the greatest alternative for you.
Corporations, like LLCs, must designate a registered agent to receive paperwork, compliance papers, and government communication on the organization’s behalf. Your registered agent, like an LLC, might be a professional service, a corporate organization, or a person.
In addition to becoming a registered agent, you must also submit a Domestic For-Profit Charter (often referred to as the Articles of Incorporation for Certificate of Formation in other states).
3. Determine whether your company has to be registered in Tennessee.
Once you’ve decided on your formal company structure and registered your new business name, you need check with your state to see what the criteria are for business registration. Each state has its own set of rules, which must be strictly followed.
Sole proprietorships are not required to register with the State of Tennessee in most situations. Check with your local government to discover whether your single proprietorship has to be registered at the county or municipal level.
Furthermore, certain firms (for example, sole proprietorships and single-member LLCs with no workers) are exempt from registering and filing for a Tax ID Number, also known as an Employer Identification Number (EIN), with the IRS. Even if this is not a necessity for your company, you should consider registering regardless since there are various legal and tax advantages.
Even though you are not compelled to register your firm, it is important to recognize that creating an LLC has several legal and financial advantages. Your business debts are considered personal debts if you are a single proprietorship or a partnership. This implies that in the case of a lawsuit, your personal assets might be taken. Personal protection is provided through LLCs, which legally shield your personal assets and minimize your personal liabilities.
Aside from personal protection, LLCs have various additional advantages, including:
Profit distribution, decision-making, and company management flexibility
“Flow-through” taxes permits the LLC’s revenue and costs to pass through to the owners’ personal income tax returns, with no limits on the number and type of owners.
If you don’t have the time or skills to organize your own LLC, there are a variety of trustworthy LLC filing services that may assist you. We analyzed and selected the five finest LLC registration services because we realize how difficult it can be to navigate through the thousands of accessible alternatives. Our LLC service review compares each to ensure you associate with a service that saves you both time and money.
4. Register Your Tennessee Business for Taxes
EINs are used by the IRS to identify firms for tax purposes. Every company with workers is obligated to have one. Our EIN guide will assist you in determining the EIN requirements for your company structure and will coach you through each stage of the procedure.
Once you obtain your EIN, you must first register for unemployment insurance tax. All entities doing business in Tennessee must pay an annual franchise and excise tax. Most enterprises must additionally pay a business tax, and those that sell tangible goods must register for sales tax with the Department of Revenue.
Additional business taxes, such as motor fuel tax, gross receipts tax, or alcoholic beverage taxes, may be required for your company. Visit the Tennessee Department of Revenue website for additional information on Tennessee business taxes and registration requirements.
5. Obtain Tennessee Business Permits and Licenses
As previously stated, most Tennessee firms are required to get a business tax license. Additional licenses and permissions necessary for a Tennessee company are decided by a variety of criteria, including the industry in which you operate and the county in which you operate. A hair salon, for example, may be required to get licensure from the state’s Cosmetology and Barber Examiners Board. For further information, go to the Department of Commerce & Insurance’s Licensing & Regulations page.
Furthermore, certain businesses are governed by a federal agency and need federal licenses and/or permits. A liquor company, for example, would be subject to FDA standards and recommendations. Visit the Small Business Administration (SBA) website to learn more about federal permit requirements and costs.