Choosing the right entity
The entity you choose for your company will primarily be determined by the ownership structure of your business and the potential future of your business.
- If you are the sole owner of the business, you may operate a sole proprietorship or a single-member LLC. There is no need to register as a sole proprietor. If you want legal and financial separation from your business, you can register an LLC.
- For small businesses with multiple ownersYou can register as a , limited liability partnership (LP), limited liability partnership (LLP), or LLC. LLPs are most common for qualified professionals such as lawyers and accountants.
- For more complex businesses, you will likely choose between an LLC or a corporation. A joint stock company is usually needed if you want to attract investors and may make it easier to sell your company in the future.
File your organization's articles of incorporation or charter
You can register your business online through the Tennessee Secretary of State's office. When you register a business in Tennessee, you file articles of incorporation or a charter to form your company.
Articles of organization formally form an LLC, and articles of incorporation form a corporation. The cost to file articles of organization for a new LLC in Tennessee is a minimum of $300 ($50 per member, minimum $300, maximum $3,000).
You will need to provide basic information about your LLC, including:
- Main work address
- Trade name
- Membership
- Closing month
- Duration of LLC
- Registered Agent (RA) name and address
- Business management structure
Please select a registered agent
A registered agent is a person or company designated to receive and file legal and financial documents about your business with the state. You can list yourself or another member of your business's management team, or you can hire a professional Tennessee registered agent to handle your legal documents for a fee.
Member management and manager management
When registering an LLC, you need to be aware of whether the business is member-managed or manager-managed. “Managed” in this case refers to the management of business operations (as opposed to lower-level “management” positions). The differences between member-managed business and manager-managed business are as follows:
Member management means that all members (owners) of an LLC automatically run the company. This is the most common operating structure for small businesses.
Manager management means appointing managers for a company. Members may or may not be members, and not all members need to be managers. This structure is useful for companies that want to attract silent investors, have a large number of owners and want to strengthen leadership with a small group, or need to hire experienced managers who are not owners of the business. It's perfect.
