A limited liability corporation is ideal for new businesses.A limited liability company limits your personal liability for business losses.An limited liability company makes filing your business taxes more efficient.If you want to arrange your business in Tennessee, you will need to file your tax paperwork with the IRS and the Tennessee Department of Revenue.
Step 1: You should name your company.
The words "Limited Liability Corporation" should be in the name of your business.The name of the company should not be confused with an existing company name.Certain terms, such as "bank," "credit union," or "mortgage," will not be allowed for use in your company's name.The Tennessee Secretary of State has a database of business names.It is a good idea to file an Application for Reservation ofLimited Liability Company Name with the Tennessee Secretary of State.There is a fee for the reservation, but it is good for four months from the filing date.If the business name can be made into a URL, you can make a website for your company.If the URL is being used by another company, consider changing your company's name.
Step 2: You can choose a registered agent.
An individual or business that agrees to be the legal representative of the limited liability company in the state of Tennessee is the registered agent.If you want your business operations to be anonymous, or if you live in another state, you need to hire a representative.You can be the registered agent for your own limited liability company.The agent needs to be licensed to operate in Tennessee and have a physical street address.If the company is ever sued, the registered agent will accept papers on its behalf.
Step 3: Decide if you should hire an attorney.
If you want to do this for yourself, you can either hire a lawyer or organize it by yourself.Both approaches have benefits.It is more time- consuming to make your own business arrangements.You could end up paying more in the long run if you don't file the proper paperwork.All paperwork is arranged if you hire a legal firm.They are likely to use standardized documents that don't fit your needs.Less expensive options are more standardized and come in a range of pay grades.Increased individualization within the paperwork can be achieved by more experienced firms.Legal fees associated with setting up an limited liability company are expected to be between $500 and $2,000.
Step 4: The management structure needs to be defined.
You'll have to decide if your company would be best managed by its members or by appointed managers who may or may not be members.Small businesses tend to be member-managed and single-owner limited liability companies are almost always member managed as well.The function of appointed managers is solely administrative.Managers have to follow voting rules and other procedural formats.Consider the number of managers that would be optimal.One manager is likely sufficient for a small business, while a larger team may benefit from it.The likeliness of a voting tie can be decreased by appointing an odd number of managers.You can change your structure at any time, but you need to establish an initial management structure before you can file the articles of organization.
Step 5: The Secretary of State can file the articles of organization.
The documents include the legal name, address, and street address of the limited liability company, as well as the registered agent's name and address.The length of time you anticipate the LLC existing to be should be specified in the articles of incorporated.The articles can be filed online or in the mail.The fee is $50 per member.The maximum filing fee is $3000.It will take three to five business days to process.There is no fast service for the articles.
Step 6: An operating agreement can be created.
If you have more than one member, it's a good idea to create an operating agreement in the state of Tennessee.The operating agreement states the responsibilities of all the members of the company.It is used to structure the company's financial and functional decisions.There's no need to file the operating agreement.Because of the complex nature of some operating agreements, you may wish to consider hiring a lawyer.
Step 7: You need an FEIN or tax number.
A social security number is a unique identification number for tax purposes.You must get an IRS Employer Identification Number if you have more than one member.You will need this tax number even if you don't have employees.If you choose to pay taxes as a corporation instead of a sole proprietor, you must obtain an FEIN for your limited liability company if it only has one member.You can get your FEIN number by completing an online application.There is no fee for an FEIN.
Step 8: You have to register for state taxes.
Tennessee companies have to file with the Department of Revenue.Businesses are required to pay taxes.If you sell a product within the state of Tennessee that requires sales tax, you will need to register for state taxes.Online or by mail, you can register with the Tennessee Department of Revenue.Extra taxes may be required in certain counties or cities within the state of Tennessee.
Step 9: Prepare to file an annual report.
The annual report should be submitted by April 15.The information in the report is meant to be updated with the state.Original signatures are not required for an authorized member, officer or partner to file.The minimum fee is $300.The fee is $50 per member with a maximum of $3,000 and an optional $8.25 fee for online filing.You can either send your annual report to the Tennessee Secretary of State or use the online filing method.
Step 10: Prepare to pay franchise and excise taxes.
Businesses located in the state of Tennessee have to pay taxes on the value of the limited liability company.There is a minimum franchise tax payment.The excise tax is an income tax rate of 6.5% on the federal tax earnings.April 15 is the due date for excise and franchise taxes.All franchise and excise taxes have to be paid electronically.You can register online at the Department of Revenue.The registration can be done in seven to 10 business days.
Step 11: All required licenses and permits should be filed.
Depending on the nature of the company and where it is located, there may be additional licensing and permit requirements.You may have to apply for permits through the health department.You may have to get permits to set up your business.Local business licenses and permits can be obtained by contacting your city or county government.Allow time for permits to be issued.Fees may be incurred if commercial transactions are allowed without a permit.
Step 12: You can get insurance for your employees.
You have to offer worker's compensation insurance for your employees if you have more than five.No matter how many employees you have, you must provide worker's compensation for them.If you have more than one employee in the coal-mining industry, you must have worker's comp.The National Council on Compensation Insurance can help you find the required insurance coverage for your employees.