How to Start a Business in Tennessee

Introduction

If you’re looking to start a business in Tennessee, you may be surprised to learn that it doesn’t take a lot of time or money. The state welcomes new businesses with open arms—and fortunately, it doesn’t charge taxes on the first $50,000 of income per year. However, there are certain requirements for starting a business in Tennessee (or any other state).

Write a Business Plan

You need to write a business plan. The Tennessee Department of Economic and Community Development recommends that you have a written business plan before you start your company. A business plan is a comprehensive document that outlines the strategy of your enterprise, including its mission, vision and goals, as well as how those goals will be achieved.

This document will guide your decision-making process throughout the launch phase by helping you determine whether or not starting a new venture is right for you based on factors such as:

• Your resources (time)
• Your passion/interests
• The current market demand/opportunity within an industry segment

Form a Legal Entity

The next step is to choose the type of legal entity for your business. If you plan to start a corporation or limited liability company (LLC), you will need a lawyer to help you do this. However, if you are planning on doing any research about what kind of entity would be best for your business, here are some things to keep in mind:

• Corporations have more formal requirements than other types of entities and include things like holding regular board meetings, having directors and officers as well as shareholders, adopting bylaws, keeping corporate records and maintaining stock ownership requirements.
• Limited liability companies (LLCs) are similar to corporations in that they provide limited liability protection for their owners but they also provide other benefits that can make them attractive options such as fewer bookkeeping requirements compared with corporations.
• Partnerships and sole proprietorships aren’t quite as simple as corporations but still allow entrepreneurs who don’t want all those extra responsibilities associated with running their own businesses.

Register your Business

The Tennessee Secretary of State is the state’s chief business registration agency. It handles all new company registrations, as well as updates and dissolutions. Before you can open up a shop in Tennessee, you’ll need to register with this office. The registration process is fairly simple, though there are some things you should know before you get started.

Apply for an EIN

The first step in starting a business is to apply for an Employer Identification Number (EIN). An EIN is a unique identifier that allows you to open bank accounts, hire employees, and pay taxes as a business. You can apply online at the IRS website or by phone.

If you’re just starting out and don’t have any employees yet, it may be tempting to skip this step – but if you do so without an EIN number already in hand, it could cause problems down the road when it comes time for tax season.

Register with the Tennessee Department of Revenue

Registering with the Tennessee Department of Revenue is a crucial step in starting a business. It’s important to remember that you must register with the department even if you have a business license, but not a sales tax license. If you aren’t sure which business license—if any—you need, ask your county clerk for help or contact the state for more information about this process.

Get a Tennessee Sales Tax License

If you’re creating a business that will sell goods or services in Tennessee, you’ll need to apply for a sales tax license from the Tennessee Department of Revenue. You can do this online or in person at your local county clerk’s office. The only items required are:

• A completed application (link provided)
• Proof of U.S. citizenship or lawful presence in the U.S., such as your birth certificate with raised seal or passport
• Social Security number

Business Licenses or Permits

Next, you’ll want to make sure that you are in compliance with any local, county and state requirements. If there are any licenses or permits required for your business, check with your chamber of commerce or research online to see what is needed. Make sure you understand all of the rules and regulations before starting a business; otherwise, you may find yourself in trouble with the law or paying hefty fines later on.

Takeaway

Before starting a business in Tennessee, make sure that your business is in compliance with state and federal laws.

• Get the right licenses and permits. Make sure that you have the proper licenses for your type of business and location. For example, if you’re running a food-related operation, then you’ll need to get a food service license from your city or county.
• Get the right tax registrations and filings. Check with both state and federal agencies to ensure that all taxes are being paid correctly for each type of income for your company (such as sales tax).

Conclusion

Starting a business in Tennessee can be an exciting and rewarding experience. As long as you’re prepared to take the necessary steps to ensure your business is compliant with all state laws, regulations, taxes and licenses, then you should have no trouble getting off on the right foot. We hope this guide has provided some helpful information about what it takes to start a new venture in our great state!