After drafting your business plan, you’re probably already gearing towards the legal registration of your company. While managing Tennessee LLC fees seems easy, non-compliance could cost you more than you’d think. Fortunately, our business experts curated this post to help you avoid unintended expenses that could damage your company budget. So let’s get into it, shall we?
Formation Costs for a Tennessee LLC
Business Name Reservation
For a company to legally operate within the state of Tennessee, you’ll have to select a unique LLC name not similar to any existing businesses in the area. While it’s easy to check its availability in the state’s public records, there’s no predicting when another entity may apply for the name ahead of your registration.
If you’re not yet ready to officially hand over your articles of organization, you can request a business name reservation and hold onto the name for 120 days. This procedure costs a $20 one-time fee and extending its duration adds up to another $20.
Articles of Organization
After selecting the perfect name to represent your LLC, it’s now time to accomplish your articles of organization. This crucial document contains all the information about your company, including your members and registered agent address.
Similar to its significance, filing your articles of organization can be the most costly among all Tennessee LLC fees that you need to cover during the formation. Depending on the number of members involved with your entity, you have to pay $50 for each with a minimum amount of $300 and a maximum of $3,000.
Technically, operating agreements aren’t mandatory documents to have during the formation of your business. However, with its crucial provisions inclusive of specific guidelines on management rights and decisions, any business enthusiast like us could assure you of its perks .
Most formation companies include crafting this internal document in their offered services, but you can create one on your own to dispel the charges. However, we highly advise seeking assistance from legal professionals to avoid lapses.
Like any other business entity, you’ll be taxed by the state depending on your business activities. To properly identify your company and impose charges, you’ll need to request an Employer Identification Number (EIN) or Federal Tax ID Number.
Besides tax documents, you’ll also need this nine-digit requirement to open a business bank account or hire employees. Obtaining an EIN online or in-person bears no charges, but expect additional service fees if you let a professional company handle this process.
Next to submitting your articles of organization, one of the most crucial steps you should take is acquiring business-specific licenses and permits. For example, certain companies offering professional services may need to get licensure requirements from state agencies before proceeding into legal operation.
Now, let’s move on to another critical requirement you must maintain to keep your good standing and limited liability perks. In most states, you must select top-tier registered agent with an actual address and available during working hours to receive time-sensitive documents from the government.
While you have the option to act as your own registered agent with no expenses involved, dealing with this role isn’t that easy. Our trade experts advise you to let the professional agents handle it if you plan to focus more on generating business income to ensure full compliance.
Foreign LLC Registration
Suppose your LLC is already formed in another state, and you’re thinking of expanding here in Tennessee. In that case, you have to register your business by submitting an Application for Certificate of Authority. This submission costs the same as filing a domestic LLC’s articles of organization.
(For easier processing, there are available online incorporation services you can hire here)
LLC Formation Services (Optional)
While we highly commend some business owners for being hands-on with the registration process and all the legwork, there are times when you have to hand it to industry professionals. These LLC formation services offer to make all your submissions accurately and efficiently for an annual payment of $0- $300.
Tennessee LLC Annual State Fees
Aside from one-time formational costs, you’ll be obliged by the state to file periodic reports yearly attached with a maintenance fee of $50 for each LLC member (approximately $300 – $3000). This submission must be made every first day of the fourth month of your fiscal year.
Although LLCs are considered as pass-through entities, your business is expected to pay different business-specific taxes such as Franchise Tax. The minimum charge for this type of tax is $100 with a taxation rate of 0.25% of the LLC net-worth or tangible properties.
(For overall costs and expenses, you can also check out our page about the cost of forming and running an LLC here)
How much does an LLC cost in Tennessee?
An LLC in Tennessee costs a minimum of $300 to $3000, depending on the number of members involved in your company. The same recurring expenses applied when filing required periodic reports, which must be submitted every first day of the fourth month of your business’s fiscal year.
Is there an annual fee for LLC in TN?
Yes, there’s an annual fee for LLC in TN. During the first day of the fourth month of your LLC’s fiscal year, the state government will require you to submit annual reports, along with the maintenance fee amounting to $300-$3000, depending on the number of members involved in the business.
Depending on your business and type of transactions, all Tennessee LLC fees you’ll need to cover highly vary. Therefore, our team of business enthusiasts recommends combing through your financial capability and straightening out your budget before proceeding with the registration.