How to Start a Business in Tennessee


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start a Business in Tennessee

Starting your own business in Tennessee is one of the most exciting and profitable things you can experience. But where do you begin? There are numerous strategies to establish a business, each with important factors to consider. If you wish to start a business in Tennessee, there are many things that you should consider. Doing business in Tennessee, popularly known as The Volunteer State, will give you many opportunities because of the current estimated population, which consists of 7,080,262. Considering the large numbers, you will cater to a lot of customers.

Follow our in-depth guide on how to start a business in Tennessee. We will help you remove the doubt from the process and explore your chances of success. It will start from defining your business idea to establishing, launching, and expanding your business. And we will guide you every step of the way.

How to Start a Business in Tennessee?

To form a business in Tennessee, you must follow a few steps that include creating a business plan, choosing a business entity type, determining your Tennessee business costs, naming your business, registering a business, and lastly, marketing your Tennessee business. Starting a business is not something you can do overnight. The processing, planning, and preparation take a lot of time. If you want to start a business in Tennessee, you must have everything ready beforehand.

Continue reading to learn more about the procedure as a whole and what new small business owners should keep in mind as they carry out each phase.

Step 1: Create a Business Plan

The first thing you need to start your business is a solid plan. In creating a business plan, you should consider many things when you are in the decision-making phase. Your business plan in Tennessee is a road map for your successful business.

A business plan should consider the detailed purpose of your business. You should know what product or service you will serve in Tennessee. A purposeful business plan is important because that plays a key role in knowing how your business will make a profit. If the purpose of the business plan is vague and not aligned with what service you are giving, it will affect the business you are forming. Make sure to be SMART (specific, measurable, achievable, realistic, and in a certain timeframe) with your business goals. Also, researching your competitor’s service is a great deal to knowing what strategy you will form for your Tennessee business. And lastly, you should include the funding of your business.

A business plan should be created before you start a business. Without it, you have nothing but a blank slate. This document will help you understand the key parts of your business and the plan for success. Regarding the potential funding for your business in Tennessee, you can avail of business loans in bank and investor funding.

You can continue working on the legal structure of your business once you have the whole plan in your possession. You may create an LLC for your business legally. You can check other business guides shared by the LLCBuddy Editorial Team.

Step 2: Choose a Business Entity in Tennessee

A business entity refers to a legal structure formed to conduct business activities. It is a separate and distinct organization recognized by the law, which possesses rights, responsibilities, and liabilities distinct from its owners or members. Choosing a business entity for your Tennessee business is significant.

You must decide on a business entity structure while beginning your own business. The form of company entity you choose will significantly impact how well your personal assets are protected, how much tax you pay, and how much paperwork you have to deal with. You should consider forming a business entity in Tennessee through having Sole Proprietorship, LLC, LLP, and Corporation.

Sole Proprietorships

A sole proprietorship is a simple and common type of business structure where an individual owns, operates, and manages the entire business. It is the easiest and least expensive form of business organization to establish and maintain. One of the most appealing aspects of a sole proprietorship is the owner’s direct control over all aspects of the business.

A key characteristic of a sole proprietorship is that the owner and the business are considered a single legal entity. This means that all profits, losses, assets, and liabilities are the owner’s personal responsibility. Although this can lead to increased risk exposure, it allows the owner to control their business operations completely.

Consider a sole proprietorship if you want to start a business in Tennessee by yourself. For legal and tax reasons, the owner and the business are regarded as one and the same. The business owner takes on liability for the business. Therefore, the owner is liable for all business debts in the event that the company fails.

Limited Liability Company

A Limited Liability Company, also known as an LLC, is a business structure ideal for entrepreneurs and start-ups. It is perfect for start-ups and aspiring entrepreneurs since it has limited liability issues for a company. The Tennessee LLC is mainly used for the legal structure of a business between two or more companies that share management and profits. It also protects its owners from liabilities, debts, and responsibilities that may cause them in the future.

LLCs offer pass-through taxation, meaning that the profits and losses flow through to the members’ personal tax returns, avoiding double taxation that corporations may experience. Additionally, LLCs have fewer formal requirements and administrative burdens compared to corporations. Read Tennessee classification of LLC tax to get more information about tax.

Another advantage of an LLC is the flexibility in the management structure. Members can choose to manage the company themselves or appoint managers to oversee the business operations. This allows for customization based on the unique needs and preferences of the owners.

Limited Liability Partnership

Limited Liability Partnerships (LLPs) are a unique business structure combining partnerships and corporations’ elements. An LLP offers limited liability protection to its partners, meaning that each partner is only responsible for their actions and debts rather than jointly and severally liable for the entire partnership’s obligations.

This structure is particularly popular among professional service providers such as lawyers, accountants, and architects, as it allows them to maintain the collaborative nature of a partnership while enjoying the liability protection typically associated with corporations.

In an LLP, each partner’s income is subject to self-employment taxes, and the profits and losses are passed through to the partners’ personal income tax returns, similar to a general partnership. This pass-through taxation avoids the double taxation issue faced by some corporations.

Corporation

Forming a Tennessee corporation reduces your personal liability for business debts as an LLC does. A corporation can be taxed as an S-corporation (S-Corp) or a C-corporation (C-Corp). If a small corporation satisfies certain Internal Revenue Service (IRS) standards, then S-corporation status is available, providing pass-through taxation. However, most larger businesses and startups seeking venture financing are taxed as C-corps.

Step 3: Determine your Tennessee Business Costs

In Tennessee, you should determine the business costs that you will form. You should consider paying the Articles of Organization fee for LLCs, Charter for Profit Corporation fees for corporations, business licenses fee, office supplies and equipment, payroll, office rent, utilities, transportation, and taxes.

Usually, filing an initial Tennessee Articles of Organization fee costs $300, while the annual fee costs $50 per member in Tennessee. Read about the overall cost of LLC registration in Tennessee cost to know more about Tennessee LLC cost. If you wish to know more about how much it costs to form an LLC, you should look up and be guided by the LLC formation costs. For a corporation, you must pay the $100 for online and by mail filing. Besides, you need to pay taxes as a corporation.

Step 4: Name Your Business in Tennessee

Naming your business doesn’t take a lot of time. With the help of Tennessee LLC name search, you can acquire a name for your business. If you form an LLC in Tennessee, you must follow the below rules while naming your business-

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Tennessee, if you do not wish to file your business right away but want to hold the name that you have decided on, then you can reserve your business name for 4 months. You must file a name reservation application in the Tennessee Secretary of State to keep the name. There is a complete guide on LLC name guidelines for you to have a proper LLC business name.

Step 5: Register Your Business in Tennessee

In order to register a business in Tennessee, you need to file it with the Tennessee Secretary of State. Before that, you must have a Tennessee Registered Agent for your business. The Registered Agent is a person who is responsible for receiving important legal documents on your behalf.

Get the Tennessee Registered Agent

You must get your Tennessee Registered Agent before you file your business. The person should be eligible to conduct business in Tennessee. Also, they must be aged above 18 years. You can be your own registered agent. However, that will not be a wise decision. Appointing a professional will be much more beneficial for your business than doing it on your own.

Apply For Tennessee Formation Document

After you have a Registered Agent, you need to file the Tennessee formation document. If you are filing an LLC in Tennessee, you must file the Articles of Organization and if you want to have a corporation structure, you need to file the Tennessee Charter for Profit Corporation.

Request For an EIN

In addition to the paperwork, you should apply for an Employer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website. You can obtain the EIN for free from IRS.

The application of an EIN in Tennessee can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone (for International Applicants)– International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your LLC the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 6: Apply for Business License and Permit

Obtaining a business license and operating permit is necessary to run any business in Tennessee. Before launching your new business, you should request any required business license or permission. Most Tennessee businesses need licenses or permits to operate. Federal, state, and local governments may all require businesses to have licenses and permits. The business license fee depends on the type of license you are applying for. You must contact Tennessee Secretary of State for more details.

Step 7: Get a Bank Account

Your business dealings in Tennessee might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, keeping separate finances helps you avoid combining personal and professional finances.

Step 8: Market your Business in Tennessee

Now that your Tennessee business is already registered, you can market it with an ideal marketing plan. An ideal marketing plan can help a start-up business to become known. Making a comprehensive social media network like META, Facebook, Instagram, Twitter, and YouTube falls within this category. While creating an SEO campaign for your company website, you may also look at specialized communities on Facebook and LinkedIn.

Important Information

Do you need to have Business Insurance?

Your company needs insurance even if it’s a home-based business or you don’t have employees. Depending on your business planning and the risks you face, you may require different types of insurance. As your business expands, you might require more than one type of insurance. If you have employees, you are typically legally required to carry workers’ compensation insurance. You must contact Tennessee Department of Commerce and Insurance, Insurance Division to ensure what type of insurance is required for your business.

What is the most profitable type of business?

The most profitable type of business will vary depending on a number of factors, including your industry, location, target market, and business strategy. However, some companies, such as those that provide expensive products and other services, tend to be more profitable than others. If you’re unsure about the kind of business to launch, think about your abilities and interests and the demands of your target market to guide your decision on an effective business.

FAQs

What types of businesses can I start in Tennessee?
You can start any type of business in Tennessee, including sole proprietorships, partnerships, LLCs, and corporations.
What steps do I need to take to start a business in Tennessee?
The first step to starting a business in Tennessee is to register your business name with the Secretary of State. Next, you may need to obtain any applicable permits or licenses from the state or local government. Finally, you will need to pay any applicable state and local taxes.
Do I need to register with the Tennessee Department of Revenue?
Yes, most businesses in Tennessee will need to register with the Department of Revenue for sales and use tax, income tax withholding, and other taxes.
Is there any help available for entrepreneurs starting a business in Tennessee?
Yes, there are several organizations in Tennessee that offer help to entrepreneurs starting a business, including SCORE and the Tennessee Small Business Development Center.
What is the process for starting a business in Tennessee?
The process for starting a business in Tennessee includes registering with the Tennessee Secretary of State, selecting a business structure, obtaining any necessary licenses and permits, and registering for state and local taxes.
Where do I register my business in Tennessee?
You can register your business with the Tennessee Secretary of State by submitting the appropriate forms and fees online or in-person.
Does Tennessee offer any incentives for starting a business?
Yes, Tennessee offers a variety of incentives for businesses, including tax credits, grants, loans, and workforce training.
What types of business structures are available in Tennessee?
The most common business structures available in Tennessee are sole proprietorships, partnerships, corporations, and limited liability companies.
What taxes do I need to file in Tennessee?
Depending on your business structure, you may be required to file Tennessee income, sales, and/or use taxes. You may also need to file local taxes.
What licenses and permits do I need to operate a business in Tennessee?
The types of licenses and permits you may need to operate a business in Tennessee depend on the type of business you are operating and where it is located.
What are the labor laws in Tennessee?
Tennessee labor laws regulate minimum wage, overtime, minimum break periods, and other labor-related matters.
What are the requirements for hiring employees in Tennessee?
Employers in Tennessee must comply with federal and state laws, including verifying employee eligibility to work in the United States, paying required taxes, and providing workers’ compensation insurance.
What are the laws regarding business insurance in Tennessee?
Tennessee business owners must carry certain types of insurance, including workers’ compensation and liability insurance. Some industries may be subject to additional requirements.
What are the laws regarding intellectual property in Tennessee?
Tennessee law protects intellectual property, including trademarks, copyrights, and patents. It is important to understand your rights and obligations regarding intellectual property in order to protect your business.
What is required to start a business in Tennessee?
In order to start a business in Tennessee, you must register the business with the Tennessee Secretary of State, obtain a business license, and register with the Tennessee Department of Revenue for sales and use tax purposes.
Do I need to obtain a business license to open a business in Tennessee?
Yes, all businesses in Tennessee must obtain a business license from the Tennessee Secretary of State.
Is there a fee to register my business in Tennessee?
Yes, there is a fee for registering your business in Tennessee. The fees vary depending on the type of business you are registering.
What taxes do I need to pay when starting a business in Tennessee?
When starting a business in Tennessee, you must register with the Tennessee Department of Revenue to pay sales and use taxes. You may also need to pay other taxes such as unemployment tax, payroll tax, and income tax.
Do I need to register with the IRS when starting a business in Tennessee?
Yes, you must register with the IRS for federal tax purposes when starting a business in Tennessee. This is typically done through the IRS website.
What types of businesses are allowed in Tennessee?
Tennessee allows any type of business, from sole proprietorships to limited liability companies and corporations.
How long does it take to start a business in Tennessee?
It typically takes between one to three weeks to start a business in Tennessee, depending on the type of business and the paperwork required.
What types of support is available for entrepreneurs in Tennessee?
The state of Tennessee provides various types of support for entrepreneurs, such as business incubators, accelerators, and funding programs. There are also several private organizations and nonprofits that offer assistance to entrepreneurs in Tennessee.
What is the cost of doing business in Tennessee?
The cost of doing business in Tennessee is relatively low compared to other states. The cost of labor and real estate are typically lower than in other states, as well as the cost of doing business such as taxes and fees.
What is the minimum capital required to start a business in Tennessee?
There is no minimum capital required to start a business in Tennessee. However, you should have enough capital to cover the startup costs of your business, such as registering the business, obtaining licenses and permits, and paying for any necessary equipment or supplies.
How do I obtain the necessary permits and licenses for my business in Tennessee?
You can obtain the necessary permits and licenses for your business in Tennessee by registering with the Tennessee Secretary of State and the Tennessee Department of Revenue. You may also need to obtain additional permits or licenses depending on the type of business you are starting.
What are the legal requirements for starting a business in Tennessee?
The legal requirements for starting a business in Tennessee include registering the business with the Tennessee Secretary of State, obtaining a business license, and registering with the Tennessee Department of Revenue for sales and use tax purposes. You may also need to obtain additional permits or licenses depending on the type of business you are starting.
Is there a tax incentive for starting a business in Tennessee?
Yes, the state of Tennessee offers a number of tax incentives for new businesses, including credits for job creation, sales and use tax exemptions, and real property tax exemptions.
What types of resources are available for entrepreneurs in Tennessee?
There are a number of resources available for entrepreneurs in Tennessee, such as business incubators, accelerators, funding programs, and private organizations and nonprofits.
What is the climate like for starting a business in Tennessee?
The climate for starting a business in Tennessee is generally positive. The state has a favorable tax and regulatory climate, and there are a number of resources available to help entrepreneurs get started.
Are there any local business organizations that I can join in Tennessee?
Yes, there are a number of local business organizations in Tennessee that you can join, such as the Tennessee Chamber of Commerce and the Tennessee Small Business Development Center.
Are there any government programs available to help me start a business in Tennessee?
Yes, the state of Tennessee offers a number of programs to help entrepreneurs start and grow their businesses, such as the Tennessee Business Assistance Program and the Tennessee Business Matching Fund.
Are there any venture capital firms in Tennessee that I can contact for funding?
Yes, there are a number of venture capital firms in Tennessee that you can contact for funding, such as the Tennessee Venture Capital Group and the Tennessee Angel Network.

Also Read

Why Start Business Tennessee is So Important

One of the key reasons why starting a business in Tennessee is so important is the state’s robust economy. Tennessee has seen significant economic growth in recent years, attracting businesses of all sizes and industries. The state’s low taxes and business-friendly environment have made it a magnet for companies looking to establish or expand their operations.

Furthermore, Tennessee is home to a diverse and skilled workforce, making it easier for businesses to find the talent they need to succeed. With top-notch educational institutions and training programs, entrepreneurs can rest assured that they will have access to a talented and well-educated workforce to help their business thrive.

In addition to its strong economy and talented workforce, Tennessee also offers numerous resources and support for startups and small businesses. Whether it’s through business incubators, accelerators, or networking events, the state provides ample opportunities for entrepreneurs to connect with mentors, investors, and potential partners.

Moreover, Tennessee’s strategic location in the heart of the Southeast makes it an ideal base for businesses looking to reach a wider market. The state’s excellent transportation infrastructure, including major highways, railways, and airports, makes it easy for businesses to connect with customers and suppliers across the country.

Another reason why starting a business in Tennessee is so important is the state’s pro-business policies and regulations. With initiatives to streamline permitting processes, reduce regulatory burdens, and provide tax incentives for businesses, Tennessee has created a business-friendly environment that fosters innovation and growth.

Furthermore, the state’s commitment to fostering entrepreneurship and supporting small businesses has led to the creation of various programs and initiatives designed to help startups succeed. From government grants and loans to mentorship programs and networking opportunities, Tennessee offers a range of resources to help entrepreneurs get their businesses off the ground.

Overall, starting a business in Tennessee is important not only for individual entrepreneurs but also for the state’s economy as a whole. By supporting startups and small businesses, Tennessee can create jobs, stimulate economic growth, and drive innovation across various industries.

In conclusion, Tennessee’s vibrant economy, talented workforce, business-friendly environment, strategic location, and supportive resources make it an ideal destination for entrepreneurs looking to start a business. With the state’s commitment to fostering entrepreneurship and supporting small businesses, there has never been a better time to launch a business in Tennessee.

Why Open a Bakery in Tennessee

One of the main reasons why starting a business in Tennessee is so important is the state’s business-friendly environment. From low corporate tax rates to business-friendly regulations, Tennessee has created a favorable business environment that fosters growth and innovation. Unlike other states, Tennessee values entrepreneurship and understands the importance of supporting small businesses. By starting a business in Tennessee, entrepreneurs can take advantage of the state’s pro-business policies and initiatives that are designed to help businesses succeed.

Another reason why starting a business in Tennessee is crucial is the state’s affordable cost of living. Tennessee offers entrepreneurs a high quality of life without breaking the bank. From affordable housing to a low cost of doing business, Tennessee offers entrepreneurs the opportunity to build their businesses without worrying about high living expenses. This allows entrepreneurs to focus on growing their businesses and achieving their goals without the burden of financial stress.

Furthermore, starting a business in Tennessee provides entrepreneurs with access to a supportive community that is dedicated to helping businesses thrive. Tennessee is home to a strong network of mentors, investors, and business organizations that are committed to helping entrepreneurs succeed. Whether it’s through networking events, workshops, or mentorship programs, Tennessee offers entrepreneurs a wealth of resources to help them navigate the challenges of starting a business. This supportive community is essential for entrepreneurs who are looking to grow their businesses and make a positive impact on the state’s economy.

In addition to the business-friendly environment, affordable cost of living, and supportive community, starting a business in Tennessee is also important because it offers entrepreneurs the opportunity to be a part of a thriving business ecosystem. Tennessee is home to a diverse range of industries, including healthcare, technology, manufacturing, and agriculture. This diversity creates a dynamic business environment that allows entrepreneurs to tap into new markets and explore new opportunities for growth. By starting a business in Tennessee, entrepreneurs can position themselves to take advantage of the state’s growing economy and diverse business landscape.

In conclusion, starting a business in Tennessee is crucial for entrepreneurs who are looking to make their mark in the business world. With its business-friendly environment, affordable cost of living, supportive community, and thriving business ecosystem, Tennessee offers entrepreneurs the resources and opportunities they need to succeed. Whether you’re a seasoned entrepreneur or just starting out, Tennessee provides a fertile ground for businesses to grow and thrive. So, if you’re thinking about starting a business, why not consider Tennessee? It may just be the perfect place to turn your entrepreneurial dreams into reality.

Why Tennessee Property Management Business is So Important

First and foremost, starting a business in Tennessee can lead to job creation. Small businesses are often referred to as the backbone of the economy, and for good reason. By starting a business, entrepreneurs have the opportunity to hire employees, provide training and job opportunities, and contribute not only to their families but also to the state’s workforce. Job creation can help reduce unemployment rates and stimulate economic growth, ultimately benefiting the entire community.

Furthermore, starting a business in Tennessee allows individuals to pursue their passions and talents. Many aspiring entrepreneurs have innovative ideas and unique skills that can be channeled into successful businesses. Tennessee offers a supportive environment for these entrepreneurs to bring their ideas to life, with resources such as business development programs, mentorship opportunities, and networking events. By starting a business, individuals can turn their dreams into reality and make a meaningful impact on both the local community and the world.

In addition to job creation and pursuing passions, starting a business in Tennessee can also have a positive impact on the state’s economy. Small businesses play a crucial role in promoting economic growth and stability. They contribute to revenues through taxes, increase consumer spending, and foster competition, which in turn can lead to lower prices and better quality products and services for consumers. By starting a business in Tennessee, entrepreneurs can play a key role in driving economic development and prosperity in the state.

Moreover, starting a business in Tennessee can help build a strong sense of community and support local businesses. Small businesses are often deeply rooted in the communities they serve, and they can help create a sense of belonging and pride among residents. By starting a business, entrepreneurs can contribute to the growth of their neighborhoods, support local charities and causes, and foster a culture of entrepreneurship and innovation. This can create a domino effect, inspiring others to start their businesses and further strengthen the state’s economy.

In conclusion, starting a business in Tennessee is incredibly important for a variety of reasons. From job creation and pursuing passions to contributing to the economy and building a sense of community, entrepreneurship holds immense value for individuals and the state as a whole. Tennessee’s pro-business environment and supportive community make it an ideal place for aspiring entrepreneurs to start and grow their businesses. By taking the leap and starting a business in Tennessee, individuals have the opportunity to make a lasting impact, create opportunities for others, and contribute to the vibrant and thriving business landscape of the state.

Conclusion

In conclusion, embarking on the entrepreneurial journey of starting a business in Tennessee, also known as The Volunteer State, requires thorough research, planning, and dedication. Understanding the local business landscape, choosing the right structure, and complying with all regulatory requirements are essential steps to ensuring your venture’s success. This article has provided valuable insights and guidance for aspiring entrepreneurs looking to seize the opportunities present in Tennessee’s dynamic economy. By leveraging available resources and approaching the process with diligence and determination, you can lay the foundation for a thriving and prosperous business in Tennessee.

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