What is required to start a business in Tennessee?

Entrepreneurs looking to launch a venture in the Volunteer State often ask: what is required to start a business in Tennessee? Tennessee offers a business-friendly environment, but it’s essential to follow the right steps for a legal and successful start. Here’s what you need to know:

1. Choose Your Business Structure

• Decide whether your business will operate as a sole proprietorship, partnership, corporation, or Limited Liability Company (LLC).
• Your choice affects taxes, liability, and filing requirements.

2. Select a Business Name

• Ensure your desired name is unique and complies with Tennessee’s naming rules.
• If operating under a name different from your legal entity, you’ll need to file an Assumed Name (DBA) with your local county clerk.

3. Register Your Business Entity

• LLCs, corporations, and limited partnerships must file formation documents with the Tennessee Secretary of State.
• Fees vary depending on the entity type and number of members or shareholders.

4. Appoint a Registered Agent

• Tennessee law requires every business entity to have a registered agent with a physical address in the state to receive legal documents and government notices.

5. Obtain an EIN (Employer Identification Number)

• Required for tax purposes, opening business bank accounts, and hiring employees. Obtain this from the IRS.

6. Register for State Taxes

• Businesses selling taxable goods or services must register for a sales tax license before commencing operations. Depending on your business activities, you may need to register for:
• Franchise and Excise Taxes
• Sales and Use Tax
• Business Tax (Gross Receipts Tax)

7. Acquire Licenses and Permits

• Licensing requirements vary by industry and location. Check state and local regulations for necessary permits.

8. Stay Compliant

• Maintain good standing by filing annual reports and keeping up with tax obligations.

Some other things to keep in mind

• Most cities and counties in Tennessee require a local business license, even for home-based businesses.
• Annual reports for Tennessee LLCs and corporations are generally due by April 1 each year.

Many entrepreneurs partner with experts like One IBC USA to navigate these steps efficiently and ensure compliance from day one.

So, what is required to start a business in Tennessee? With proper planning and support, your business can thrive in one of the most business-friendly states in the U.S.