How To Start & Grow Your Business

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How to Start a Business in Tennessee

Want to start a new business in the state of Tennessee? You’ve come to the right spot!

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Tennessee is one of only a handful of states that does not have personal income tax. The mixture of no state personal income tax, and no state property tax helps keep the tax burden low. Tennessee’s major industries include agriculture, manufacturing and tourism. Tennessee boasts a pro-business regulatory climate, as well as a top Aaa rating from Moody’s on its general obligation debt. And, Tennessee’s contribution to American music is unparalleled. While Nashville is most famous for being the long-time capital of country music, Bristol is recognized as the “Birthplace of Country Music.” And, Memphis musicians have had an enormous influence on blues, early rock and roll, and soul.

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How to Start a Business

Starting a business can be both exhilarating and challenging. It requires your full attention and energy. It all begins with an idea, an observation that there is a problem and the belief that you have a new solution – or a better one. Allow us to walk you through the steps in this free guide: How to Start A Business.

General resources for starting a business in Tennessee

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Fun facts about starting a business in Tennessee

Famous business founded in Tennessee LifePoint Health

LifePoint Health provides healthcare services in growing regions, rural communities, and small towns. It was founded in 1997 and is headquartered in Brentwood, Tennessee. As of 2013, it operated 60 hospitals campuses in 20 states, with more than $3.5 billion in revenue.

Famous businessperson born in Tennessee Polly Bergen

Polly Bergen (1930-2014) was an actress, singer, TV host, writer, and entrepreneur.
She won an Emmy Award in 1958 for her performance in The Helen Morgan Story. As an entrepreneur, Bergen created the Polly Bergen Company cosmetics line in 1965. She also created multiple jewelry lines and shoe brands, and wrote three books on beauty.

“The secret I’ve lived by ever since I started earning money is this: Always buy a house with an extra bedroom adjoining the master. And that’s always my closet.”

Polly Bergen
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Which type of legal structure is best for my business in Tennessee?

We strongly recommend you incorporate, but you must consider the tax, legal, and liability implications carefully before deciding on the best legal structure for your business.

Here are five steps to help you determine the best legal structure:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Tennessee.
LLC (Limited Liability Company)
A limited liability company (LLC) is a unique business entity that combines the taxation benefits of a partnership or sole proprietorship with the limited liability status of corporations. The owners of an LLC are referred to as “members,” and can range from one to several.

Steps to starting an LLC in Tennessee:

  • Step 1 — Name your LLC.
  • Step 2 — File Articles of Organization.
  • Step 3 — Appoint a Registered Agent.
  • Step 4 — Prepare an Operating Agreement.
  • Step 5 — Comply with any publication requirements.
  • Step 6 — Comply with other tax and regulatory requirements.
  • Step 7 — File Annual Reports.
  • Step 8 — Register foreign LLCs doing business in Tennessee.

For help forming your LLC in Tennessee we recommend CorpNet (there are fees for their service).

Alternatively, visit the Tennessee Secretary of State website.

Other Tennessee resources for LLCs:

Secretary of State Business Name Database: Search for the availability of your LLC name here.
File your “Application for Registration of Assumed Name” here.
File your “Articles of Organization” here.
File your Annual Report here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your LLC here. If your LLC has more than one member, you must get an EIN, even if you have no employees.

Tennessee Department of Revenue: If you will have employees or will be selling goods, you’ll need to register with this site.

Sole Proprietorship
Popular among individual self contractors or business owners, a sole proprietorship is a business entity that is owned and run by one person, and in which there is no legal distinction between the owner and the business. The owner is in direct control of all elements and is legally accountable for all profits, debts, losses, and liabilities.

Steps to starting Sole Proprietorship in Tennessee:

  • Step 1 — Give your sole proprietorship a name.
  • Step 2 — File your fictitious business name.
  • Step 3 — Obtain licenses, permits, and zoning clearance.
  • Step 4 — Get an Employer Identification Number (EIN).

For help forming your sole proprietorship in Tennessee we recommend CorpNet (they have fees for their service).

Alternatively, you can visit the Tennessee Secretary of State website.

Other Tennessee resources for Sole Proprietorship:

Secretary of State Business Name Search: Search for the availability of your business name here. A sole proprietor may use his or her given name, or an assumed business name.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your sole proprietorship here. If you hire employees, you will need an EIN.

Tennessee Department of Revenue: If you will have employees or will be selling goods, you’ll need to register with this site.

Partnership
In a partnership, two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business. There doesn’t have to be a written agreement to form the partnership.

Steps to starting Partnership in Tennessee:

  • Step 1 — Choose a business name.
  • Step 2 — File a fictitious business name.
  • Step 3 — Create a partnership agreement.
  • Step 4 — Obtain licenses, permits, and zoning clearance.
  • Step 5 — Get an Employer Identification Number (EIN).

For help forming your partnership in Tennessee we recommend CorpNet (there are fees for their service).

Or, visit the Tennessee Secretary of State website.

Other Tennessee resources for Partnership:

Secretary of State Business Name Search: Search for the availability of your business name here. A partnership may use the surnames of the individual partners, or a fictitious business name.

U.S. Patent & Trademark Office: Federal database for existing trademark registrations. Click on the “TESS” link to conduct a search.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your partnership here. Partnerships must have an EIN, whether you have employees or not.

Tennessee Department of Revenue: If you will have employees or will be selling goods, you’ll need to register with this site.

S Corporation
An S corporation (sometimes referred to as an S Corp), is a special type of corporation created through an IRS tax election. A business electing to incorporate with S corporation status has its business income taxed only once, similar to how sole proprietorships and partnerships are taxed. By electing to become an S corporation, a small business can gain the legal advantages available to businesses with a corporate structure, as well as the tax advantages available to partnership firms.

Steps to starting S Corporation in Tennessee:

  • Step 1 — Choose a corporate name.
  • Step 2 — Prepare and file a corporate charter.
  • Step 3 — Appoint a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with Tennessee Annual Report requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Tennessee.

For help forming your S corporation in Tennessee we recommend CorpNet (there are fees for their service).

Alternatively visit the Tennessee Secretary of State website.

Other Tennessee resources for S Corporation:

Secretary of State Business Name Search: Search for the availability of your corporate name here.
File your “Application for Reservation of Name” here.
File your “Corporate Charter” here.
File your Annual Report here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Tennessee Department of Revenue: Register here to fulfill business tax requirements.

C Corporation
A C corporation (or C corp for short), under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. However, C corporations have greater tax planning flexibility and can shield shareholders from direct tax liability.

Steps to starting C Corporation in Tennessee:

  • Step 1 — Choose a corporate name.
  • Step 2 — Prepare and file a corporate charter.
  • Step 3 — Find a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — Comply with Tennessee Annual Report requirements.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Tennessee.

For help forming your C corporation in Tennessee we recommend CorpNet (they have fees for their service).

Or, you can visit the Tennessee Secretary of State website.

Other Tennessee resources for C Corporation:

Secretary of State Business Name Search: Search for the availability of your corporate name here.
File your “Application for Reservation of Name” here.
File your “Corporate Charter” here.
File your Annual Report here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your business here.

Tennessee Department of Revenue: Register here to fulfill business tax requirements.

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Why choose Tennessee for my business?

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