LLC Cost In Tennessee - How Much To Pay In Fees & Taxes in TN
To engage in business as a limited liability company, the owner needs to file a set of documents with the Secretary of State.
No less crucial in the formation process is the cost of setting up as well as meeting the financial obligations to keep the LLC compliant. Therefore, in this article, we are going to talk about:
- Mandatory payments during the formation period;
- Optional services and required Tennessee LLC fees;
- Licenses and permits prices;
- Taxes.
How Much Does an LLC Cost in Tennessee?
Far more than just the state fee is included in the cost of forming an LLC. Other expenses can be thrown in as well.
Also, setting up an LLC should follow an explicit algorithm so that you don't make the slightest mistake that will lead to redoing the procedure. The details of setting it up are described here.
Tennessee LLC Online Filing Fee: $300-$3000
Want to have a cheap Tennessee LLC formation? That's not entirely realistic for several reasons:
- First, the initial state filing fee starts at $300;
- Second, there is no flat state Tennessee LLC filing fee. The cost will depend on the number of members. The price of an LLC in Tennessee can go up to $3,000.
The registration fee will be $50 per member, but the minimum fee is $300, and the maximum is $3,000. So, if an LLC has 1-6 members, the owner pays $300, and if there are more than 60 members, the owner is charged $3,000.
Available ways to file Articles of Organization: online (Secretary of State system) or by mail.
Mailing address:
Tennessee Secretary of State
312 Rosa L. Parks Ave.
6th Floor, Snodgrass Tower
Attn: Business Filings & Information
Nashville, TN 37243-1102
Note: When applying through the online system, be ready to pay an additional $8 or 2.29% of the total for the convenience of the service.
Processing time: online registration takes a few business days (or even instantly), while mail-in processing is slower: up to 10 business days + mailing time.
Annual Tennessee Report Fee: $300
To avoid being penalized by the state, business owners are expected to file Tennessee annual reports on time. This document is required so that the state has insight and details on registrants in the state.
Tennessee reports can be filed by any authorized person of an LLC and should be done no later than the first day of the 4th month each year. The document is filed online or in paper form. For online submission, there is an additional fee ($2.29).
The cost of application for both local and foreign limited liability companies starts at $300. The total amount depends on the number of participants (1 participant = $50) but not exceeding $3,000.
Processing time: 5-10 working days for paper documents, 1-2 days online.
Note: LLC owners will not have to pay fines for late filing of an annual report, but it is a reason for cancellation or dissolution of the firm.
LLC Name Reservation
In order to successfully complete the Articles of Organization, the owner needs to register the legal name of the firm. You can do this with the Secretary of State.
Once you have chosen the one you like, be sure to check it for eligibility so you don't have to go through the procedure again.
- Term of the name reservation: 4 months;
- Reservation price: $20;
- Reservation method: send your application via regular mail.
Registered agent (Agent for Service of Process, Resident Agent) Fee
The appointment of a registered agent is a preliminary task for each owner who plans to file Articles of Organization with the Secretary of State.
Note: Avoiding the procedure is not advisable, as it is a state requirement described in statutes §48-15-101 and §48-208-101. If the Articles of Organization do not include RA's data, the firm will not be registered.
The agent's job is to ensure a seamless connection between the business and the state. And the agent's listed address is the official location where notices and letters will be sent.
Who can become an RA? Legally, the owner of the LLC or any other trusted person can become an agent. It should be a person who:
- Is 18 years old or older;
- Resides in the state;
- Is present at the registered address during normal business hours.
A more profitable and favorable option is specialized services, whose work as agents is priced at $49-$500 in the market.
Cost to Form a Foreign LLC in Tennessee
To register a foreign LLC, a person will also need to go through the registration process with the Secretary of State's office.
How is the registration process different for foreign LLCs?
- There is no online filing option for foreign business owners. Instead, the paperwork is expected to be mailed to the Secretary of State in paper form or delivered in person;
- It is not necessary to file Articles of Organization because this requirement is relevant for local firms only. Foreign entities apply for a Certificate of Authorization;
- You have to provide RA data, get a Certificate of Good Standing, fill out an application for a Certificate of Authority, and send it to the Secretary.
Processing time: the processing takes up to 10 days, but you should also take into account the time spent on sending the papers by mail.
The cost of registration of a foreign company is similar to that for local firms. Thus, the state duty payment will be from $300 to $ 3000 as well.
Cost to Form a Series LLC in Tennessee
Owners can form a Series LLC in Tennessee, but there are several extra steps required to register this business entity:
- Fill out the standard Articles of Organization;
- Include the additional "Series LLC" designation in Section 3;
- Check the appropriate box in Section 14.
The service cost is also $300-3000, and the final amount depends on the number of participants in the LLC. There is also a Tennessee LLC transfer fee of 2.29% if paid by credit card.
- You can file documents in person by mail or through the Secretary of State's online platform;
- Processing time is affected by the form of submission chosen. The fastest option is online registration (up to 2 days).
Cost to Form a PLLC (Professional LLC) in Tennessee
In the state, professionals who have earned the right to practice business as doctors or massage therapists can form a professional LLC.
There are no special requirements to create a PLLC. But the owner and members of the firm should have the relevant licenses. Registration will require to:
- Choose a name;
- Appoint an agent;
- Complete and send the Articles of Organization to the Secretary.
The State Secretary will process the documents only accompanied by a check for payment of the state fee. The fee ranges from $300 to $3,000, and the exact Tennessee LLC cost is determined by the number of members.
Documents are accepted by regular mail, online, or in person. Papers submitted via credit card will cost more, as there is an additional convenience fee on top of the standard LLC fees in Tennessee.
Business License Renewal Fee
Firms with over $3,000 in taxable income are required to obtain a business license in order to be eligible to conduct business in the state. There are 2 license options depending on the amount of revenue:
- If the income is under $9,999, a minimum license, which costs $15, is sufficient. The document requires renewal every year ($15).
Note: minimum license holders do not pay business tax.
- A standard business license at $15 is required for firms with revenues of $10,000 or more. It is renewed automatically after income tax is paid.
Note: Standard license holders are required to register and file a business tax return (minimum $22).
Professional Privilege Tax
Tennessee law states that the professional privilege tax should be paid by licensed and eligible persons (attorneys, physicians, agents, etc.).
Annual LLC fee Tennessee: $400 once a year by June 1.
Franchise Tax and Excise Tax
Tennessee levies a franchise tax. This is an annual fee that is based on the worth of the firm's assets.
So, the minimum payment is $100. The calculation is based on book value.
- Franchise tax rate: $0.25 per $100;
- Excise tax: 6.5% of net income.
Other LLC Filing Costs
Let's take a look at the additional costs that may arise in the process of setting up a limited liability company.
Foreign LLC Name Registration
You do not have to re-register the legal name of the company. If the existing name is free in the Tennessee registry and meets its requirements, a name reservation certificate is all you need.
"Doing Business As" (DBA) Name
A DBA or fictitious name gives more advantages to the owner from a marketing and branding standpoint.
Apply to register a fictitious name on the Secretary of State's online portal.
DBA Reservation Cost: $20
Certified Document Copies
Certified document copies in Tennessee are obtained by owners from the Secretary of State. You can request a copy by mail or in person.
Such a document may be required as proof that the firm is registered with the state. For example, bankers often request it when the owners want to get a business loan.
- Copy cost: $20;
- Processing time: up to 2 days + time to send papers by regular mail.
Note: There is no expedited procedure for obtaining Articles of Organization copies in Tennessee.
Certificate of Good Standing
This document can also be requested from the Secretary of State and is known as the Certificate of Good Standing.
Its contents confirm the fact that the company is properly established and complies with the requirements. Also, this Certificate proves that all licenses and permits are in place, taxes are paid on time, and there are no delays in the annual reports.
- The cost of the Certificate: $20;
- Ways to apply: online or by mail.
Note: Ordering a Certificate of Good Standing online may incur an additional online service fee.