In a way, starting a business means learning a new language. In the business world, there are many, many terms that aren’t used in everyday conversation. Terms like LLC formation, registered agent, Articles of Organization, and annual report.
To help business owners launch a business in Tennessee, we’ll explain the steps that you have to take. One of the steps includes naming a registered agent for your company. A registered agent is a point of contact who accepts official documents for the company. These official documents are often sent by registered mail or delivered in person.
The person selected to serve as a company’s registered agent must be trustworthy, reliable, and able to communicate with the owner quickly.
To better assist entrepreneurs with establishing a business and selecting a registered agent, this guide will provide useful answers to common questions.
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How is an LLC formed in Tennessee?
A Tennessee LLC is established in the state by filing LLC formation documents known as Articles of Organization. In some states, the name of these documents vary. You may have heard them called Certificate of Organization, for example, but no matter what the name they’re meant to legally set up an LLC.
However, filling out the Articles of Organization is not the first thing entrepreneurs need to do. Follow these steps to get started:
1. Name the company
The company needs a unique name. A unique name is one that’s not used by any other business in the state of Tennessee. The state law will not allow two businesses to have the same name, so before settling on a name it’s important to check availability. To see if a company name is available, visit the Tennessee Secretary of State website and conduct a search.
Availability is just the first naming hurdle. Every company name must also follow these rules:
- The name should have “Limited Liability Company” or “LLC” in the name.
- The name can’t allude to the government in any way.
- There are certain names that could trigger additional state approval. For instance, a company called “Kids Academy” may be need to provide proof that it’s an actual academy.
While you’re working through the company name, it’s also a good idea to see if the matching domain is available. In some cases, entrepreneurs pick a company name only to find out that the domain name isn’t available, which means the company website won’t match the company name. It’s something to research before officially selecting a company name.
2. Pick a registered agent
A registered agent is required by law to be listed on the Articles of Organization. The business owner should know who they plan to select and have that person’s approval to list him or her as the registered agent with the state.
Some states require signed authorization from a registered agent to show a person’s willingness and awareness of the role. Tennessee doesn’t require such a document, but the person or company selected to serve in this role should give consent.
3. File the Articles of Organization
It’s time to file the Articles of Organization for your company. To do so, you can find the necessary documents online and can mail them in or submit them on the secretary of state’s website.
The Articles of Organization won’t take long to fill out since you know the company name and who will serve as the registered agent.
The Articles of Organization will also ask you for the company name and address, the registered agent’s name and address, a list of managing members, the company start date, and it may ask for a list of products or services that the company offers. The document must be signed by the LLC organizer, which is usually the business owner, and submitted.
There is a filing fee that must be paid too. The filing fee is $50 per LLC member, with a minimum of $300 and a maximum of $3,000. This is different in Tennessee than in other states. Most states have a flat filing fee.
It will take the state three to five days to approve the document. Once approved, the company is an official Tennessee LLC.
4. Create a company operating agreement
Every company, no matter what state it resides in, should have an operating agreement. An operating agreement explains how a company is set up, how decisions are made, and lists responsibilities, both functional and financial, or each managing member. This document becomes a contract once it’s signed by all parties.
While the operating agreement doesn’t need to be filed with the state, business experts say it’s a vital document that should be completed before opening to the public.
For those who need help developing this document, run a Google search for an operating agreement template to get started.
5. Obtain an EIN
As a business, a nine-digit number from the IRS is required for many financial transactions. To hire employees, pay taxes, and open a business checking account, for example, an EIN, or an employer identification number, is required.
To get an EIN, simply log onto the IRS website, answer a few questions, and an EIN is issued at the end of the session. It’s a five-minute process.
6. File an annual report
Be aware that all Tennessee LLCs must file an annual report and pay a filing fee. The annual report can be filed on the Tennessee Secretary of State website. The filing fee is the same as the Articles of Organization. It’s $50 per LLC member, with a $300 minimum and a $3,000 maximum.
What is a Tennessee registered agent?
A Tennessee registered agent is a person or company that receives official documents for the company. The business owner must pick a person or a company to fill this role and file the person’s name and address with the state.
Do I really need a registered agent in Tennessee?
Yes. The State of Tennessee requires all LLCs to list a registered agent. The state needs to know that there’s a person on file ready and willing to accept documents if necessary.
Can I be my own registered agent in Tennessee?
Yes. The owner of a company can also be its registered agent. It’s common for an owner to fill this role, especially if he or she works out of the company office consistently. However, the owner can elect another person or company.
Who can be a registered agent in Tennessee?
In Tennessee, a registered agent can be an adult resident of the state who has a physical street address or a company that’s in good standing with the state that has a street address. In addition, the person or the company must be available to accept documents during regular business hours.
Why would a company choose to work with a registered agent service?
The company owner can select a registered agent service to accept documents for the company. If a company is selected, documents are directed to the service and the owner is notified if something is received. There are benefits to working with a registered agent service. The benefits include:
- Convenience. Paying a company a few bucks to be on call for document delivery is ideal for some business owners. It’s easy to set up and provides a level of convenience that owners like.
- Peace of mind. A registered agent service provides reassurance to most owners. They know that documents won’t be missed or mishandled with a company in place.
- Privacy. One of the documents that a registered agent could receive is the service of process papers, which are served during a lawsuit. To avoid “being served” at the company office, some owners opt for a registered agent service to ensure a level of privacy should something like that happen.
List of Tennessee registered agent services
There are many registered agent services to choose from in the state. The secretary of state’s office can provide a list of options, but for those wondering about choices, here’s a list of a few companies and their features:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Tennessee?
Costs are a concern for every business owner, but a registered agent service is fairly affordable. For a company to accept documents and notify the owner, expect to pay $50 a year. For more advanced features like same-day document scans and assistance with compliance reports, expect costs to hover around $100-200 a year.
How does an owner select a registered agent in Tennessee?
A registered agent is selected by listing the person or company on official paperwork that’s filed with the state.
Can a company change its registered agent?
Yes. There is a change form on the Tennessee Secretary of State website to switch a company’s registered agent. There is a $20 filing fee. The form can be submitted online or it can be downloaded and mailed to the state.
What’s a statutory agent?
A statutory agent, resident agent, and service of process agent, are all the same as a registered agent. Different states use different titles. Most, however, use the title registered agent.
What’s a commercial registered agent?
A company has a commercial registered agent if a registered agent service is hired. If the owner or another employee serves as the company’s registered agent, the company has a non-commercial registered agent.