How to Form an LLC in Tennessee

Tennessee is known for its musical history, low taxes, and for being business-friendly, and now it is increasing its reputation as one of the best states for starting a business.

For local business owners, as well as for foreign investment and entrepreneurs seeking to tap into the U.S. market, setting up a Limited Liability Company (LLC) in Tennessee could be the best alternative for starting a new business.

Like in most states, there is a structured approach to form an LLC in Tennessee. In this guide, we outline the most important things to consider regarding formation, compliance, taxes, and additional tips for non-resident founders.

Tennessee Offers Opportunities for LLC’s

Tennessee offers a number of advantages and incentives to businesses and entrepreneurs, and here are a few of the most important:

✅ Not taxable for the state’s earned income

Entrepreneurs setting up a business in Tennessee are in luck. Tennessee does not have personal income taxes for any wages earned. In layman’s terms, LLC owners will get to keep more of their business profits as compared to states with higher taxes.

✅ Reasonable Pricing for Living and Company Expenditures

Unlike the overpriced states of California and New York, Tennessee is much more affordable when it comes to running a business, paying rent, hiring, and covering utility expenses. This is a game changer for startups and small businesses who are looking to boost their bottom line.

✅ Strategic Geographic Location

Tennessee is centrally located in the southeastern United States and has access to major interstate highways, railroads, and airports, making it a powerful logistics and distribution hub. This is especially advantageous for e-commerce, manufacturing, and export businesses.

✅ Pro Business Climate and Incentives

Supporting businesses with grants, loans, tax incentives, and even workforce training programs is a hallmark of the state. Along with simple tax laws, Tennessee has a lack of complex regulatory environments and red tape making it easier for entrepreneurs.

Forming an LLC in Tennessee Guide

1. Name your LLC

Your Tennessee LLC is required to have a name that is unique and adheres to the state’s naming conventions.

Requirements

• The name you choose must contain one of the following “Limited Liability Company,” “LLC,” “L.L.C.”
• It has to be distinguishable from all other existing business entities in Tennessee.
• It should not contain restricted terms such as “bank” or “insurance” unless proper licensing is obtained.

How to Check Availability

• Use the Tennessee Business Entity Search Tool to see if your prospective name is taken.
• (name reservation is optional as well, learn more below this section in the DIY section)

Optional Name Reservation:

If you are not ready to form your LLC but want to secure your business name, you can submit an Application for Name Reservation. Pay the $20 fee and the name will be held for four months.

2. Choose a Registered Agent in Tennessee

A Registered Agent is a person or business that receives important correspondence such as lawsuits and government notices for your LLC.

Requirements:

• Must be a registered resident of Tennessee or a company authorized to conduct business in Tennessee.
• Must have a physical location, street address. P.O. Boxes are not accepted.
• Must be accessible during regular business hours.

If you’re a non-resident or lack a physical address in Tennessee, professional services to fulfill this requirement are available through Bizstartz, who also assists with compliance.

3. Submit Articles of Organization to the Secretary of State

The Articles of Organization (Form SS-4270) is the document that forms your LLC with the state of Tennessee.

Submission Options:

• Online: Fastest method (1-3 business days)
• Mail: Slower processing.

Filing Fee:

• $50 per member (owner) with a minimum of $300 and maximum of $3,000.

Key Information Needed:

• Name and address of the LLC.
• Details of the Registered Agent.
• How long is the LLC in duration (perpetual or a specific date).
• Names of the organizers.
• Management structure (member-managed or manager-managed).

Filing is accessible through the Tennessee Secretary of State Business Portal.

4. Draft an Operating Agreement

Though optional under Tennessee Law, an Operating Agreement is an essential internal document that details the internal workings and the governance of your LLC.

What It Should Include:

• Equity participation
• Assigned management roles with corresponding voting rights
• Allocation of profits and losses
• Methods of resolving conflict
• Protocols for exiting the company or transfer of ownership stake

This Controlled document limits internal disputes and further protects the LLC’s liability shield.

Pro Tip: If the LLC has multiple members or international co-founders, an Operating Agreement is important to foster trust, structure, and legal clarity.

5. Apply for EIN (Employer Identification Number)

An EIN is also referred to as the Federal Tax ID Number and is mandatory to open U.S. business bank accounts, file taxes, and even hire staff.

How to Get an EIN:

• U.S. Residents: Apply for free online at the IRS EIN Assistant
• Non-U.S. Residents: The online EIN assistant doesn’t support applicants without a Social Security Number (SSN) so you must submit Form SS-4 via fax or mail.

Bizstartz assists non-U.S. founders in obtaining an EIN quickly, even in the absence of an SSN or ITIN.

6. Register for Tennessee Taxes (If Necessary)

Depending on the activities of your LLC, you might need to register with the Tennessee Department of Revenue.

Types of Business Taxes:

• Sales and Use Tax: Applies when selling physical goods or certain digital products.
• Franchise & Excise Tax: Applies to most LLCs and is based on net earnings and net worth.
• Business Tax: Applies to all businesses with gross receipts exceeding $10,000 annually.

You can easily register your business for these taxes through the TNTAP portal.

7. Submitting the Annual Report

Every LLC in the state of Tennessee is required to submit an Annual Report to maintain an active status and compliant standing.

Important Points:

• Deadline: The first day of the fourth month following the close of the LLC’s fiscal year (for most calendar year businesses, it’s April 1).
• Cost: $50 for each member with a $300 minimum.

Corporations risk incurring late fees, penalties, or risk having the LLC administratively dissolved.

8. Setting up a Business Bank Account

You’re eligible to set up a business bank account with a company in the US after receiving your EIN and Articles of Organization.

Documents Needed:

• Articles of Organization
• EIN confirmation letter
• Operating Agreement (optional)
• Passport (for foreign nationals)

Some online fintechs such as Mercury, Relay, or Wise Business permit foreign business owners to set up accounts remotely.

For residents and non-residents, Bizstartz offers expedited banking services to assist you with your business setup.

Costs of Forming and Maintaining an LLC in Tennessee

Important Aspects for Non-U.S. Citizens

On a global scale, a person is able to register and run an LLC company in Tennessee. Here is the information you need to know.

• No U.S. Citizenship Required
• You maintain full ownership.
• A Registered Agent in the U.S. is necessary.
• An ITIN may be needed for tax purposes.
• Funds from U.S. Banks and payment processors.

Checklist Items Before You Start

• Identify a unique name for your LLC.
• Designate a registered agent.
• Draft and submit the Articles of Organization.
• Create an Operating agreement.
• Apply for an EIN.
• Apply for state tax numbers.
• Set up annual reporting.
• Open a business bank account.

Business payments from global clients will become much easier to process and will improve your business’s reputation.

Want to easily and safely start your LLC in Tennessee?

With Bizstartz, both US and non US entrepreneurs can easily and confidently start and manage their LLC. We offer assistance with:

✅ LLC Formation

✅ EIN Application (No SSN Required)

✅ Registered Agent Service

✅ ITIN Assistance

✅ Business Bank Account Setup

✅ Ongoing Compliance Support

👉 Start your LLC in Tennessee today.

Frequently Asked Questions (FAQs)

1. Can I register an LLC business in Tennessee if I do not stay in the USA?

Yes, an LLC can be registered by a foreigner in Tennessee. All that the person requires is to have a registered agent in Tennessee and an EIN.

2. How long does it take to register an LLC in Tennessee?

In Tennessee, LLC online registries are done within a maximum of 3 business days. Sending documents takes 1-2 weeks.

3. What taxes does an LLC in Tennessee pay?

Most LLCs in Tennessee pay Franchise & Excise Tax, Business Tax, and Sales Tax (if applicable). There is no personal state income tax in Tennessee.

4. Are lawyers required to form an LLC?

Not entirely. If there are complex ownership issues or legal matters, it is best to consult a knowledgeable attorney. For most, a DIY approach works best, and as such, they can visit Bizstartz, which offers templates and step-by-step guidance.

5. Can I open a US bank account without visiting the country?

Yes, you can. There are some fintech banks, such as Mercury and Relay, which permit account creation for non-resident founders. Bizstartz helps non-resident founders through these processes.