The first step in forming a Tennessee Limited Liability Company is to make sure the name you want is available.  

It’s critical to do a name search before registering an LLC name, as the name of each LLC must be distinguishable from other entity names registered in the state of Tennessee. The Tennessee Secretary of State makes it easy to search and verify if your LLC name is available.  Here is more information on how to do a Tennessee LLC name search. If the name of your LLC is being used and the current name registrant provides written consent for you to use that name, you would still be able to use it.

In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:
– Limited Liability Company
– L.L.C.
– LLC

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

If there is a name you want to use but aren’t ready to form the LLC, the Application for Reservation of Name (Form ss-4228) can be filed with the Tennessee Secretary of State to hold the name for up to 4 months.

Before settling on an LLC name, you may want to do a domain name (also called a URL) search to try to find one that matches your business name.

Tennessee Code § 48-208-101 requires that every LLC in Tennessee have a registered agent. A registered agent will act as a central point of contact to receive legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.

The basic requirements to be a registered agent in Tennessee include:
– The agent must be a Tennessee resident at least 18 years of age or a commercial registered agent service with a registered office in the state.
– The agent must have a physical address in the state (PO Boxes aren’t allowed).
– The agent must generally be available during normal business hours at the address provided to receive service of process.

Learn more about the requirements for a registered agent in Tennessee.

If you are going to use a commercial registered agent service, be sure to have their SOS Control Number before filing the Articles of Organization (Step 3).

Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially those working from home or still employed.  Hiring a commercial registered agent service like Northwest Registered Agent will help keep the owner’s names from being listed on the state’s website.

The paperwork to officially create an LLC in Tennessee is called the Articles of Organization. To submit the paperwork, either file online through the Tennessee Secretary of State’s website or fill out and mail the Articles of Organization (Form SS-4270).

Related: How to fill out the Tennessee Articles of Organization

There can be some confusion when filling out the Articles of Organization for the first time. Let’s go over a few of these sections to help get your LLC started right.

Formation Locale –
– Domestic Tennessee Business – A “Domestic LLC” is one that originates and is based in Tennessee. Most filers select Domestic LLC.
– Foreign Business – If the LLC was originally formed in another state and wants to do business in Tennessee, select “Foreign Business.”

Business Type – This is an optional section for the Series LLC designation.  A Series LLC provides liability protection across multiple asset groups or businesses, each of which would be protected from liabilities from the other series. The Series LLC is not a common choice and is more commonly used with real estate investment companies.

Period of Duration – In this section, you can indicate how long the LLC intends to remain in existence.  Most LLCs will choose a Perpetual duration; however, some businesses (usually investment-related) will have a specific closure date.

Fiscal Year Close – Select the last month of the fiscal year for the LLC.  Most LLCs will choose December.  Single-Member LLCs and LLCs taxed as a partnership will automatically choose December.

Delayed Effective Date – Leave this field blank if you want the LLC to start immediately.  If you want the LLC to start on a later date, enter a date less than 90 days in the future.  The main reason for delaying the LLC start date is when the filing is made close to the end of a calendar year, and the business isn’t going to have any activity until the start of the year.  You can eliminate the need to file a partial-year business tax return by delaying the start date until the following year.

Management Structure – This section asks if the LLC is Director-Managed, Member-Managed, or Manager-Managed.
– Director-Managed LLCs have a board of directors that have the power to make decisions for the business.
– Member-Managed LLCs have an active involvement in the management and have the authority to act on behalf of the LLC.
– Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation.  This is generally used when there are passive members in the LLC, and the members do not actively manage or operate in the affairs of the business.

Most LLCs are member-managed.

Related: What is the Difference Between a Member-Managed LLC and Manager Managed LLC?

Obligated Member Entity – This is an optional section.  An OME is exempt from the Tennessee franchise and excise tax but is offered no liability protection, which is one of the major benefits of having an LLC.  If you are considering this selection, be sure to consider the legal aspects.

Principal Office Address -In this section, enter the street address, city, state, and zip code of the initial principal office.  This address can be the LLC’s physical address, or it can be the address where the business records are stored.  You may not use a PO Box for the designated office.

Mailing Address – If correspondence from the Secretary of State should go to a different address from the Principal Office, enter that information in this section.