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Last Updated on May 15, 2024 by Dr. Gabriel O’Neill, Esq.
Starting a business venture can be an exciting and rewarding endeavor. However, navigating the process of registering your business in Tennessee might feel daunting, especially for newcomers to the entrepreneurial world. But fret not! With the right guidance and resources, you can simplify the registration process and make it hassle-free.
In this blog post, our goal is to provide you with a comprehensive guide to help you register your business in Tennessee effortlessly. We’ll also share valuable tips and resources to streamline the process. Whether you’re launching a new business or formalizing an existing one, our guide will walk you through the process in seven easy steps.
We understand that business registration can still present challenges, which is why we’ve curated a selection of top-notch business registration services like Northwest Registered Agent, known for their expertise in facilitating this process. So, let’s dive into the details and expedite the registration of your business in Tennessee!
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How to Register Your Business in Tennessee in 7 Simple Steps
If you plan to register a business in Tennessee, it’s important to be aware of the following 7 steps. By following these instructions meticulously, you can ensure a prompt and efficient establishment of your Tennessee-based business.
Step 1: Choose Your Business Structure
The most suitable business structure for your enterprise in Tennessee depends on the nature of your business and your plans for growth. We have already discussed the different types of incorporated and unincorporated businesses available in Tennessee. Now, let’s examine each of these options and their operational aspects.
Please keep in mind that if you opt for a structure that requires incorporation, you will need to register your business with the Tennessee Secretary of State.
Sole Proprietorship
A sole proprietorship is the simplest business structure in Tennessee, where the owner and the business are considered one legal entity. This means that the owner assumes personal responsibility for the business’s debts and liabilities. Establishing a sole proprietorship is straightforward, with minimal legal and administrative requirements. In Tennessee, you’re not required to register your sole proprietorship with the state, but you may need to obtain local permits or licenses.
General Partnership
A general partnership is a business owned by two or more individuals who share in the profits and losses. Each partner is personally liable for the business’s debts and legal obligations. In Tennessee, there is no requirement to register a general partnership with the state, but you may need to file a “Tennessee Assumed Business Name Certificate” (DBA) in the county where your business is located.
Limited Partnership (LP)
In Tennessee, a limited partnership consists of one or more general partners who manage the business and have unlimited personal liability, along with one or more limited partners who contribute capital but have limited liability. To establish an LP in Tennessee, you must file a “Certificate of Limited Partnership” with the Tennessee Secretary of State.
Limited Liability Company (LLC)
An LLC is a flexible business structure that combines the liability protection of a corporation with the tax benefits and simplicity of a partnership. In Tennessee, you need to file an “Articles of Organization Limited Liability Company” with the Tennessee Secretary of State and create an Operating Agreement to outline the company’s management and ownership structure.
Corporation
A corporation is a separate legal entity from its owners (shareholders) that provides limited liability protection. There are two types of corporations in Tennessee:
- C-corporations
- S-corporations
To establish a corporation in Tennessee, you must file an “Articles of Incorporation For-Profit Corporation” or “Articles of Incorporation Nonprofit Corporation” with the Tennessee Secretary of State, depending on your business type. Corporations involve additional formalities, such as creating bylaws, issuing stock, and conducting regular board and shareholder meetings.
Choose the business structure in Tennessee that best suits your needs in terms of liability protection, taxation, and management requirements. If you require assistance in making this decision, consult with a legal or business professional.
Step 2: Select a Unique Business Name
In Tennessee, there are multiple options available for naming your business. You can register a legal entity name, obtain a trademark, or register a legal name and operate under a different one. The specific rules and regulations governing business naming vary from state to state, so it’s important to familiarize yourself with the requirements specific to Tennessee.
Much like the process of incorporating your business, the naming approach you select in Tennessee will depend on the unique needs and circumstances of your entity.
While it may be advisable to pursue all three options to ensure the exclusivity of your chosen name, you can also opt for a single method. Although not mandatory, maintaining consistency across all registration methods by using the same name is generally recommended.
Let’s explore each of the naming options available in Tennessee in more detail:
Legal Entity Name
In Tennessee, businesses are required to register a legal entity name, which serves as the official identification for the company as recognized by the state. To ensure that your chosen name remains distinct and avoids potential conflicts with other businesses, it must be distinguishable.
Tennessee’s naming laws include guidelines regarding company suffixes (e.g., LLC, LP, or Corp) and mandate that the name accurately reflects the nature of the registered business. You can verify the availability of a name by utilizing the database provided by the Tennessee Secretary of State.
Trademark
In Tennessee, a trademark serves as a means of intellectual property protection for a business name or logo at the national level. It’s crucial to conduct a comprehensive search in the USPTO database to ensure that the name or logo you intend to protect has not already been registered.
Once registered, a trademark grants you exclusive rights to the name or logo, prohibiting others from using a similar name or logo for similar goods or services nationwide. However, it’s important to note that obtaining a trademark does not automatically confer unrestricted usage rights for the name or logo in all circumstances.
Operating Under a Different Name (DBA)
In Tennessee, you have the option to register your business under an official name while operating under a different name, commonly referred to as a Doing Business As (DBA) name. To establish a DBA, you must file a Certificate of Assumed Name with the appropriate county clerk’s office in the county where your business is located. While DBAs are subject to federal trademark laws, there is no requirement for a DBA to be unique at the state level.
By understanding and carefully considering these naming options, you can successfully register your business name in Tennessee while safeguarding your brand identity.
Step 3: Consider Taxes and Other Costs in Tennessee
Tennessee LLCs are subject to a variety of taxes, including:
- Sales Tax: Tennessee has a 7% state sales tax, which is imposed on most goods and services sold in the state. There are a few exemptions to the sales tax, such as groceries and prescription drugs.
- Franchise Tax: Tennessee corporations and LLCs must pay a franchise tax of $25 per year. The franchise tax is due on the anniversary date of the corporation or LLCs formation.
- Income Tax: Tennessee corporations and LLCs are subject to a state income tax. The corporate income tax rate is 6.75%, and the LLC income tax rate is 5.75%. Several deductions and credits can be claimed against Tennessee income taxes.
- Property Tax: Tennessee businesses are subject to property taxes on real and personal property owned by the business. The property tax rate is set by the local taxing authority.
- Withholding Taxes: Tennessee employers are required to withhold state income tax from the wages of their employees. The amount of withholding tax is based on the employee’s filing status and income.
- Employer’s Unemployment Insurance Tax: Tennessee employers are required to pay an unemployment insurance tax. The tax rate is 2.7% of the first $10,000 of wages paid to each employee.
If you’re considering forming a Tennessee LLC, you should consult with a tax advisor to determine the specific taxes that your LLC will be subject to.
For enhanced convenience during the registration process, business owners in Tennessee can opt for online services, such as ZenBusiness. ZenBusiness provides a wide array of services to support entrepreneurs in registering their businesses, encompassing tasks such as filing with the Secretary of State, obtaining an Employer Identification Number (EIN), and establishing an operating agreement. Additionally, continuous compliance support is offered to help businesses maintain a favorable position within the state.
Step 4: Register and Acquire Licenses and Permits in Tennessee
To ensure legal compliance and operational legitimacy, it’s necessary to complete the process of obtaining licenses and permits for your business. Here are the essential steps:
Tax Registration: If you intend to sell goods in Tennessee, it’s mandatory to register with the Department of Revenue to collect sales tax. Additionally, you may need to register for other business-related taxes as required by the DOR.
Employer Identification Number (EIN): If your business has employees or is subject to separate taxation, obtaining a federal Employer Identification Number (EIN) from the IRS is necessary. Even if not mandatory, having an EIN is often beneficial for business purposes. It’s commonly required by banks to open a business account, and other companies may also request an EIN to facilitate payment processing. You can apply for an EIN through an online application without any filing fees.
Regulatory Licenses and Permits: These licenses and permits are specific to various areas such as health and safety, environmental compliance, building and construction, and industry-specific regulations. Different agencies issue these licenses and permits. Key issuing agencies include the Alcoholic Beverage Commission, the Department of Agriculture’s Plant Industry Services, the Department of Environment & Conservation, and the Department of Health.
It’s important to consult the respective agency for detailed information. Additionally, for local licenses and permits, it’s advisable to refer to the websites of the cities or counties where your business operations will be conducted.
Professional and Occupational Licenses: These licenses pertain to individuals working in specific fields or professions. The Department of Commerce & Insurance (TDCI) oversees many regulatory boards and commissions for licensed professions and occupations; however, not all professions fall under their jurisdiction. It’s essential to identify the relevant regulatory board or commission for your particular field and adhere to their licensing requirements.
By following these professional guidelines, you can ensure that your business adheres to legal requirements, maintains compliance, and operates within the parameters set by the appropriate regulatory bodies.
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Step 5: Open a Bank Account For Your Business in Tennessee
After obtaining your EIN, it’s crucial to establish a business bank account in Tennessee.
The regulations governing LLPs, LLCs, and corporations mandate the necessity of a business bank account. However, sole proprietors and unincorporated partnerships are not legally required to maintain separate personal and business bank accounts.
To initiate the process, visit a local bank in Tennessee and complete the necessary paperwork. Before finalizing your choice, it’s prudent to compare the rates and benefits offered by different banks to ensure the most advantageous option.
Even if you currently operate as a sole proprietor or unincorporated partnership, having a designated business bank account in Tennessee is advisable for maintaining financial segregation. By taking this proactive step, you will avoid potential complications in the future should you decide to incorporate your business.
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Step 6: Protect Your Intellectual Property in Tennessee
When starting a business in Tennessee, it’s crucial to protect your valuable intellectual property (IP), depending on the type of company you have.
For instance, most businesses strive to ensure that their name and logo cannot be copied or used by other entities. Depending on whether your business involves selling goods or offering services, you may also want to safeguard the design of your products or the creative works you produce, such as writing, designs, or music.
Tennessee provides several options to accomplish this, and initiating the necessary applications promptly is advisable to prevent unauthorized use of your IP.
Trademark
In Tennessee, a trademark refers to a recognizable symbol, phrase, word, or design that distinguishes a product or service from similar offerings in the market.
To obtain legal protection, trademarks must be registered with the United States Patent and Trademark Office (USPTO). The registration process typically takes four to six months to complete. Once registered, the trademark is protected nationwide, allowing legal action against unauthorized use.
Businesses in Tennessee can protect their trademarks by registering them with the USPTO. This not only safeguards their brand and reputation but also provides legal recourse against unauthorized use of the trademark.
Copyright
Tennessee’s copyright law protects original works of authorship, including literary, dramatic, musical, artistic, and certain other intellectual works. This includes written content, software, web content, films, sound recordings, images, and various forms of creative expression.
When you create a new work in Tennessee, copyright protection is automatically granted to the creator. As the owner of exclusive rights to distribute, reproduce, create derivative works, and sell intellectual property, you have the legal authority to control the utilization of your work.
However, registering your copyright with the U.S. Copyright Office in Tennessee can provide additional legal protection and serve as evidence of ownership. Registering your copyright in Tennessee can help protect your work against infringement and provides a means to enforce your rights through the judicial system if necessary.
Patent
If you invent a new product or piece of machinery in Tennessee, obtaining a patent is crucial. A patent grants exclusive rights to the holder, preventing others from making, selling, or importing the patented item for a specified period.
The patent application process is complex and can take up to five years to complete, so initiating it early is advisable if you have a unique invention that requires protection. Patent applications are submitted to the United States Patent and Trademark Office (USPTO).
By protecting your intellectual property in Tennessee, you can safeguard your brand, products, and creations, ensuring your business maintains a competitive edge and continues to thrive.
Step 7: Set Up Your Payment Infrastructure in Tennessee
To ensure that your Tennessee-based business is ready to serve customers promptly upon registration, it’s essential to establish a smooth and convenient payment acceptance system.
There are several payment processing services available that offer user-friendly interfaces and seamless integration with your website or point-of-sale (POS) system. Popular options such as Square, Stripe, and PayPal provide flexible and customizable systems that align with your business objectives.
These payment processors enable you to accept a wide variety of payment methods, including credit and debit cards, ACH transfers, digital wallets like Apple Pay and Google Pay, and more. By selecting a reliable payment processing service, you can provide your customers with the flexibility to pay using their preferred methods through a secure platform, ensuring a seamless transaction experience for both your business and clients.
In addition to selecting a payment processor, it’s crucial to establish sales tax compliance in Tennessee. This involves obtaining a Tennessee Sales and Use Tax Certificate from the Tennessee Department of Revenue, granting you the authority to collect sales tax on taxable goods and services.
Once your payment infrastructure is set up, your Tennessee-based business will be well-prepared to serve customers and generate revenue efficiently and securely.
By following these steps, you will be on your way to establishing a legally compliant business in Tennessee.
Top 5 Business Registration Services for Tennessee Entrepreneurs
When it comes to registering a business in Tennessee, entrepreneurs and small business owners have access to various business registration services. These services provide comprehensive solutions to help businesses establish themselves and comply with state and federal regulations. Here are some of the top business registration services available for Tennessee entrepreneurs:
ZenBusiness
ZenBusiness is an online business registration service that specializes in business formation, registered agent services, annual report filing, and more. With affordable pricing and packages, they offer personalized support and resources to assist businesses in maintaining compliance and driving growth. ZenBusiness provides a user-friendly website and a streamlined process, making business registration straightforward for Tennessee entrepreneurs.
Swyft Filings
Swyft Filings is a popular business registration service known for its fast and easy business formation, including LLC formation, incorporation, and compliance. They provide personalized support and resources to guide Tennessee businesses through the registration process and ensure compliance with state and federal regulations. Swyft Filings has a user-friendly website and offers affordable pricing, making the registration process convenient for entrepreneurs.
Tailor Brands
Tailor Brands is an online branding and design service that helps businesses create a professional and cohesive brand identity. They offer a range of branding packages, including logo design, business card design, and social media branding. Additionally, Tailor Brands provides design tools and resources, allowing businesses to customize their branded assets. While not a traditional business registration service, Tailor Brands assists Tennessee entrepreneurs in establishing an appealing brand image to attract customers.
Northwest Registered Agent
Northwest Registered Agent is an online LLc registration service specializing in registered agent services, compliance management, and document filing. Renowned for their quality and exceptional customer service, they offer personalized support to help Tennessee businesses maintain compliance with state and federal regulations. Northwest Registered Agent provides various business formation services for LLCs, corporations, and nonprofits.
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Bizee (Previously Incfile)
Bizee is an online business registration service that offers fast and affordable business formation services. They provide packages that include registered agent services, compliance management, and document filing. bizee platform is user-friendly and streamlined, making the business registration process easy and hassle-free for Tennessee entrepreneurs. Additionally, they offer ongoing support and resources to help businesses maintain compliance and drive growth.
Each of these business registration services brings unique features and benefits to assist Tennessee entrepreneurs in registering their businesses. By researching and comparing these services, entrepreneurs can find the best option to meet their specific needs and make the registration process efficient and effective.
Business Registration Laws in Tennessee
In Tennessee, the process of registering a business involves several steps and requirements. Here are some key aspects of business registration laws in Tennessee:
- Business Structure: Determine the structure of your business, such as sole proprietorship, partnership, corporation, or Limited Liability Company (LLC).
- Business Name: Choose a unique name for your business. Ensure that the name isn’t already in use by another business in Tennessee. You can search for existing business names using the Tennessee Secretary of State’s website.
- Trade Name Registration: If you plan to operate your business under a name that differs from your own legal name (for sole proprietorships) or the official name (for partnerships, corporations, or LLCs), you must register a trading name, also known as a “doing business as” (DBA) name, with the county clerk’s office in the county where your business is located.
- Entity Formation: If you choose to form a corporation, LLC, or partnership, you must file the necessary formation documents with the Tennessee Secretary of State’s office. This typically involves submitting articles of incorporation or organization, along with the required fees.
- Business Licenses and Permits: Depending on the nature of your business activities, you may need to obtain specific licenses and permits from state and local authorities. The Tennessee Department of Commerce and Insurance provides information on various professional licenses and permits that may be required for certain industries.
- Tax Registration: Register your business for tax purposes with the Tennessee Department of Revenue. You will need to obtain a tax identification number, also known as an employer identification number (EIN), from the Internal Revenue Service (IRS) if you plan to hire employees or have a business structure that requires it.
- Business Insurance: Consider obtaining appropriate insurance coverage for your business. Although it may not be a legal requirement, it’s generally recommended to protect your business from liability and other risks.
It’s important to note that the registration process and requirements may vary depending on the type and location of your business. It’s advisable to consult with an attorney or a business professional who can provide guidance tailored to your specific situation. Additionally, you can visit the official website of the Tennessee Secretary of State for detailed information and resources related to business registration in the state.
Alternative Business Registration Methods in Tennessee
In Tennessee, there are several alternative business registration methods available for individuals who want to start a business. Here are a few options:
Online Registration
The Tennessee Secretary of State’s website provides an online platform called “TN SOS” (Tennessee Secretary of State), where you can register your business online. This method is convenient and allows you to complete the registration process from anywhere with internet access.
Mail-in Registration
If you prefer a physical registration process, you can request the necessary forms from the Tennessee Secretary of State’s office and submit them via mail. You will need to fill out the required forms, attach any necessary documents, and mail them to the appropriate address provided by the Secretary of State’s office.
In-Person Registration
Another option is to visit the Tennessee Secretary of State’s office in person and register your business. This method allows you to interact directly with the staff, ask questions, and receive assistance during the registration process.
It’s important to note that the specific requirements and procedures for business registration may vary depending on the type of business entity you want to form (e.g., sole proprietorship, partnership, LLC, corporation). It’s recommended to consult with an attorney or a professional business advisor to ensure you understand the legal and regulatory obligations associated with starting a business in Tennessee.
Benefits of Registering Your Business in Tennessee
Registering your business in Tennessee offers several benefits. Here are some of the advantages:
- Legal Recognition: Registering your business with the state of Tennessee provides legal recognition and establishes your business as a separate legal entity. This separation ensures that your assets are protected from any liabilities or debts incurred by the business.
- Limited Liability Protection: One of the significant benefits of registering as a Limited Liability Company (LLC) or a corporation in Tennessee is the limited liability protection it offers. As an owner, your assets are typically shielded from the business’s debts and legal obligations.
- Tax Advantages: Tennessee has a favorable tax environment for businesses. The state does not impose personal income tax on wages and salaries, which can be advantageous for business owners. Additionally, Tennessee has a low corporate income tax rate, making it an attractive state for businesses looking to minimize their tax burden.
- Access to Funding and Resources: Registering your business in Tennessee makes it easier to access various funding opportunities and resources. The state offers several programs and incentives to support small businesses, including grants, loans, tax credits, and technical assistance. Registering your business can also enhance your credibility and improve your chances of securing financing from lenders or investors.
- Business-Friendly Environment: Tennessee is known for its business-friendly environment. The state has a relatively low cost of living, affordable real estate, and a skilled workforce. It also boasts a strong transportation infrastructure, making it easier to ship products and reach customers. The state government is committed to fostering economic growth, and there are numerous networking and collaboration opportunities available for entrepreneurs and business owners.
- Brand Protection: Registering your business in Tennessee helps protect your brand identity. By registering your business name, trademark, or service mark, you gain exclusive rights to use that name within the state. This prevents others from using a similar name, which could lead to confusion among customers and potential legal issues.
- Compliance with regulations: Registering your business ensures compliance with state regulations and requirements. It allows you to obtain necessary licenses and permits specific to your industry, ensuring that you operate legally and avoid penalties or fines. Complying with these regulations helps build trust with customers, partners, and suppliers.
It’s worth noting that while these benefits generally apply to registering a business in Tennessee, it’s important to consult with a legal or financial professional to understand the specific requirements and implications for your unique business situation.
Is Business Registration Required in Tennessee? Find Out Here
Certainly, in Tennessee, most businesses are obligated to register with the state authorities. The specific registration obligations may vary depending on factors such as the business structure, industry type, and other pertinent considerations. Some common registration requirements involve obtaining a Tennessee Sales and Use Tax Permit, registering a Tennessee Limited Liability Company (LLC) or Corporation, and obtaining professional licenses or permits as required for certain industries.
It’s crucial to conduct thorough research on the specific requirements applicable to your business and ensure complete compliance with all registration obligations to mitigate any potential legal and financial consequences.
How to Register Your Business in Tennessee – Frequently Asked Questions
What Do I Need to Register a Business in Tennessee?
In Tennessee, the process of registering a business entails choosing a business name, determining the legal structure, and filing the necessary paperwork with the Tennessee Secretary of State. This typically involves submitting Articles of Organization or Articles of Incorporation, designating a registered agent, and obtaining any mandatory licenses or permits based on the type and scope of your business activities.
How Much Does It Cost to Register a Company in Tennessee?
In Tennessee, the cost of registering a company varies based on the legal structure and filing type. The filing fee for an LLC’s Articles of Organization is $300, whereas for a corporation, the fee is $100. It’s essential to consider that supplementary fees might be applicable for other obligatory filings and permits for your business activities.
Can a Foreigner Start a Business in Tennessee?
Tennessee extends its support to foreign individuals interested in commencing a business within its borders, contingent upon adherence to the applicable legal provisions. Foreign entrepreneurs intending to establish businesses in the state should ensure compliance with visa or work permit requirements and complete the required registration procedures as mandated by relevant state and federal authorities.
Do I Need to Register My Online Business in Tennessee?
Running an online business in Tennessee may require you to register your business with the state, depending on various factors. The registration requirements can vary based on the type of business entity you have established and the nature of your online operations. While sole proprietorships and partnerships may not be obligated to register, corporations and LLCs are typically required to do so.
Furthermore, it’s important to determine if any permits or licenses are necessary for your online business activities in Tennessee, such as a sales tax permit from the Tennessee Department of Revenue.
Seeking guidance from a qualified attorney or accountant who is well-versed in Tennessee’s business regulations is advisable to ensure compliance with the relevant laws.
Bottom Line on How to Register Your Business in Tennessee
Registering your business in Tennessee is a vital undertaking to ensure adherence to state laws and regulations. While it may seem daunting, adhering to the prescribed steps and criteria diligently enables you to lay a sturdy foundation for your venture.
It’s imperative to meticulously choose a business name and legal structure that meets the Tennessee Secretary of State’s requirements. Furthermore, completing requisite paperwork and securing relevant licenses and permits tailored to your industry and locale is indispensable. Utilizing a business registration service such as Northwest Registered Agent can streamline the process and guarantee compliance with all obligations.
Investing the effort to properly register your business in Tennessee can assist in averting potential legal and financial hurdles down the line, setting the stage for your prosperity.
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About the author
Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.