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Written by : Reinaldo Pezzica |
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hey i'm eric and in today's video we're talking about how to start an llc in tennessee so what i'm going to do is in this video it's kind of two parts one is i'm going to show you three different ways that you can start and set up an llc but throughout the video i'm also going to be talking about things that you should be aware of and potential pitfalls of setting up an llc so some of those pitfalls are terms such as piercing the corporate veil registered agents co-mingling funds if you're not familiar with these terms it's super important that you stay on this video because i'm going to share with you what these terms mean and why it's important when you're getting set up with an llc so first things first as far as cost so this site that we're looking at here is called ink file it's an online legal tool to set up an llc but they have this nice page here that shows you what the cost is for setting up your llc so you're going to be at 308 for your state filing fee do know that there's no way around this if you're setting up through the state website which i'm going to show you how to do going through online tools such as ink file or going with an attorney they may bake that you know cost into the price of their services you're going to pay that 308 dollars to the state of tennessee now if you're going through the state website they will charge a service fee as well to cover their costs for credit card transactions so the first thing i want to do is if you go to google and search tennessee llc the first listing that comes up is the state website right here this is a great time to mention that any links or resources mentioned in this video will be in the description below if any of them are affiliate links i'll mark them as such as i will get a commission but what we're looking at right now is the state website completely free to use and i'm going to show you how to go through the steps of setting up your llc what you would click on when you get to the state website is form or register a new business right here so once you get started here you would click the start now button as i mentioned before a service fee may be charged if filing fees are paid online by credit or debit card another thing to be aware of is depending on what you end up doing you may have to actually mail in documents and print them up if you're going through the state website as you can see in this section here so just things to be aware of now when you click the start now button what you'll do is you'll click limited liability company i'm gonna click guide test here and continue now this section here i've actually got this all filled out because i wanted to be able to go through this quickly and just share a few things with you okay so one of the first things i want to share though is when you're doing the name i'd imagine the name volunteers llc would be taken in the state of tennessee right so one of the things that i don't like about the state website is i would assume this name is gone in the state of tennessee a lot of other sites what it will do is automatically pop up and say that is a already registered name where i'm not seeing that service being done on the state website i'm going to skip over detail because that's pretty simple but agent is definitely one that i want to cover here so please provide the details for your registered agent in tennessee note the registered office address must be a physical address or tennessee address not a post office box so this is one of my biggest gripes with state websites for setting up an llc there is really no mention of what a registered agent is what that person will do for your business and why they are important now before we get into explaining what a registered agent is i think it's important to understand exactly what an llc is so then we can start kind of breaking it down a little bit and the different bits and pieces that you need to be aware of so some people think that a limited liability company an llc will help you with taxes it will not it is strictly a mechanism to create an entity online which 80 of all new businesses set up are llc so you're in good company but it helps to limit your liability so when you have a business you have your business assets and then you also have your personal assets and now your personal assets your personal home car bank accounts etc what that llc does is it draws a division between these assets it's known as the corporate veil that's kind of the legal jargon of that division between those assets so in the unfortunate case if you're sued what's going to happen is is the attorney suing you is going to want to be able to come after not only your business assets but your personal assets as well but if you have a proper llc set up what it's going to do is it's going to create that division so they can't come after your personal assets as well now the term mentioned earlier in the video piercing the corporate veil so that is what that attorney is going to try to do they're going to try to pierce that corporate veil which is essentially they're going to try to find cracks in your llc one of the ways that they can do that is if you don't have a proper registered agent set up for your business so that's why it's important to understand what a registered agent is so what we can do is uh there's a nice article on this on ink file they have a great learning center here uh if you want to check it out and what i did is i went to about registered agents now we're going to scroll down and what does a registered agent do so officials letters and correspondence from your secretary of state service of process notices so this just means if you were sued that you're actually getting that notice and you're showing up to court like you should be official federal government correspondents information notifications tax forms and request for payment and request to complete permits company filings or reports so the difficulty here is sometimes people may go through an online form like this and to save some money they'll say you know it's going to be my cousin susie q is going to be my registered agent well that person may not actually know what's involved with being a registered agent they may not be doing all these things for you correctly and then what happens is you're not dotting your eyes and crossing your t's and then what that does is it creates a crack in your llc so what's gonna happen is when you're sued the attorney's suing you is gonna be oh is this person actually up to date on company filings and reports well it turns out susie q dropped the ball over there and never actually reminded you or sent you you know the right paperwork for that and then you have a crack in your llc so we talked about piercing the corporate bail now you understand what a registered agent is and why they're important so when you're going through this process just know it's important but they really don't explain the importance of a registered agent so as you go through it's pretty simple too it's just you know providing the address of the principal office confirmation etc now at this point what i'd like to sh
Thanks for your comment Neil Brogren, have a nice day.
- Reinaldo Pezzica, Staff Member
how to form an LLC in Tennessee Tennessee is an excellent place to form a new LLC with low tax burdens high ease of doing business and one of the strongest economic climates in the country every state has slightly different requirements for forming an LLC follow along closely to learn the required steps for creating your own limited liability company in the state of Tennessee there are two ways to form an LLC in Tennessee you can form one yourself or you can hire a service to do it for you let's start by looking at the five basic requirements to form an LLC and Tennessee on your own you can also find these steps in more detail on our website linked in the description below one name your LLC every state has its own rules about what kind of names are allowed for LLC's in general you will need to observe these naming guidelines your name must include the phrase limited liability company or one of its abbreviations LLC or LLC with a period following each letter restricted words such as Bank Attorney law office etc may require additional paperwork and may also need a licensed professional to be part of the LLC your name cannot include words that could confuse your LLC with a government agency such as FBI Treasury State Department etc you cannot use a name that has already been registered to see if your name is available in your state you will need to do a name search this free service is available on your state's Secretary of State website check out our free guide for finding the direct link to your state we also recommend that you check to see if your business name is available as a web domain even if you don't plan to make a business website today you may want to buy the URL in order to prevent others from acquiring it to choose a registered agent Tennessee requires that you nominate a registered agent for your LLC who is your business's point of contact with the state the registered agent can be an individual within the company including yourself or you can hire a professional service authorized to do business in Tennessee they will send and receive legal papers on your behalf these documents include official correspondence like legal summons and document filings which your registered agent will receive and forward to you your registered agent will help remind to file the necessary reports failure to properly maintain your LLC can result in fines and dissolution so this assistance is valuable three file the articles of organization to register your Tennessee LLC you will need to file the articles of organization with the Tennessee Secretary of State this can be done online by mail or in person you will need to state whether your LLC will be member managed or manager managed member managed means all members of the LLC manage the company this is good for small organizations where everyone is involved in the day-to-day operations the second option is manager managed where individuals are appointed to manage the LLC this is appropriate for larger organizations where not everyone is involved in the day-to-day affairs of the business for create an operating agreement although not every state requires it you should always create an operating agreement to establish ownership terms and member roles for your LLC this foundational document is the core of your LLC and will help you maintain your organization as well as further establish your LLC is a separate legal entity there are six main sections of an operating agreement organization outlines when and where the company was created who the members are and how the ownership is structured management and voting addresses how the company is managed as well as how the members vote capital contributions covers which members financially support the LLC and how more funds will be raised in the future distributions outlines how the company's profits and losses are shared among members membership changes describes the process for adding or removing members as well as if and when members can transfer their ownership shares and dissolution which explains the circumstances in which the LLC may be dissolved an operating agreement is an internal document it does not need to be filed with the state however it should be updated every time there is a change in membership or management at the company you can download a free sample operating agreement or create a custom one using our free operating agreement tool at how to start an LLC comm 5 obtain an EIN lastly you'll need to get an employer identification number or ein from the IRS also known as a federal tax identification number your EIN is like a social security number for your LLC and how the IRS tracks your business for tax purposes an ein is also necessary to open a business banking account and legally hire employees he insr free of charge and can be obtained from the IRS online or through the mail and with that you'll have formed a Tennessee LLC on your own option to hire professional service the second way to create a Tennessee LLC is to hire professional service to create your LLC for you hiring a professional service to file your forms and act as your registered agent for the LLC will cost you an additional fifty to one hundred and fifty dollars however there are several benefits to working with a pro a hired registered agent helps with getting your reports filed on time helps you stay organized by keeping your business mail separate and is available at all regular business hours to accept official mail and legal papers on your LLC's behalf a final and important additional benefit of using a service is privacy a professional service will provide a level of privacy by withholding your personal name and home address from the LLC's contact information there are many reasons why you might not want your personal information easily accessible and associated with your business hiring a professional LLC for mation service is an easy way to accomplish this now that you have seen the different requirements and ways you can form an LLC in tennessee visit our site and take some time to research your options and establish a solid foundation for your business activities click on the links in the description below to research the top five professional formation services or get more information on how to form a Tennessee LLC on your own now you know all the steps to form an LLC in your state for a more detailed guide go to how to start an LLC com you can also create an operating agreement and use our business plan tool free of charge give the video a like if you found it useful and subscribe if you'd like to see more and if you have questions or encounter any roadblocks leave a comment below good luck and starting your small business you
Thanks omarvelazqueza your participation is very much appreciated
- Reinaldo Pezzica
About the author
I've studied statistical mechanics at Concordia University Wisconsin in Mequon and I am an expert in ecosystem ecology. I usually feel sleepy. My previous job was physics professor I held this position for 14 years, I love talking about scuba diving and jigsaw puzzles. Huge fan of Michael Bubl+¬ I practice rowing and collect eggs.
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