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Let's start past checking the availability of your company name in Tennessee. Don't worry about adding "Corporation" at this phase; we'll take intendance of that later.

Corporation Tennessee Experts and 5 Steps to Your TN Corporation

Corporations are a popular business blazon because they're treated equally independent legal entities, limiting the liabilities of the owners and allowing the corporation to enter into contracts and maintain stability over fourth dimension.

Corporations autumn into the following iii categories:

C corporations. A C corporation is owned by shareholders who elect a board of directors to oversee operations. They're taxed as a carve up legal entity and provide the greatest amount of protection between business and personal avails.
S corporations. Due south corp earnings are divide among shareholders and are taxed at that level only, not as well separately every bit a business entity.
Nonprofit corporations. Nonprofits can apply with the IRS to be taxation-exempt from federal taxes (employees must nonetheless pay taxes on their wages), but they require significantly more paperwork and must adhere to strict regulations.

How do I course a corporation in Tennessee?

This article will guide y'all through how to showtime a corporation in the land of Tennessee.

To outset a corporation in Tennessee, you lot must file a charter with the Secretary of State. But several actions come both before and subsequently doing so.

To simplify the process of forming a corporation in the state of Tennessee, we've put together x like shooting fish in a barrel steps to form your business:

Step 1: Name your corporation

When it comes to naming your corporation, you demand to brand sure you comply with Tennessee business naming laws, but there are too many other factors to consider during the process. This includes making certain your business proper name is unique, suits your concern well, aligns with all regulations, and includes a corporation designator.

And don't overlook the importance of choosing a proper noun for which you can reserve a matching website domain proper noun that has not been taken. Additionally, yous can consider whatever "doing business every bit" (DBA) names yous may desire.

Naming Requirements for Tennessee Corporations

Here are some guidelines to help you through the naming procedure:

Outset by brainstorming a list of potential names. Names on this list should friction match your business concern's purpose, and the more you take, the better. The next several steps will brainstorm to narrow downwards your options.
The concluding version of whatever name you cull must comprise the word "Corporation," "Incorporated," "Visitor," or the abbreviation "Corp.," "Inc.," "Co.," or words or abbreviations of like import in another language. This is known as a designator.
Search your prospective business names on the Tennessee Secretarial assistant of State's Business organization Name Availability folio to eliminate any that are too similar to existing businesses.
Corporation names also cannot contain language implying they are organized for a purpose other than what is stated in the corporate charter.
The name cannot suggest it is associated with any government agency or include annihilation indicating information technology volition be engaged in illegal business.
One time you've narrowed down your list as described above, the next job is to search for an available domain name to help ensure you can secure a website domain that matches your business proper name.
Before making the last conclusion on your business organisation name, make sure it isn't already trademarked by someone else. You lot can search federal and state trademark databases to encounter if you're in the clear. If then, y'all have the choice of pursuing your own trademark.
If you would like to practice concern under a name dissimilar from your official business name (oftentimes called a "doing business as" or DBA proper name), you volition need to file an Awarding for Registration of Causeless Corporate Proper name and pay a filing fee.
Once you've settled on a name for your business, you may cull to reserve the proper noun if you're non ready to annals it. You tin can practise this by submitting an Awarding for Proper name Reservation with the required filing fee. Proper noun reservations are skillful for 120 days earlier you need to renew the name registration or register your business.

Stride two: Appoint directors

A corporation'south board of directors is responsible for overseeing the operations of the business. As such, your business needs one to get started.

The initial incorporators — those filing the charter for the business — often appoint the initial lath of directors. Later on, the board is elected annually by shareholders (those who agree stock in the company; this can include the original incorporators). In Tennessee, only a single incorporator is needed, and merely one member on the lath is needed, although having more than is generally advisable.

Incorporators may exist directors and shareholders. In fact, a single person can start a corporation and hold all associated titles. But the three titles are associated with unlike roles within the business. To clarify, here are some of the different roles that exist in a corporation:

Incorporators are responsible for starting the business organization and filing the initial paperwork.
The board of directors oversees the performance of the business.
Shareholders finance the concern by owning shares in the company; they besides oft have the voting power when selecting the directors.
Officers execute the duties associated with running the business.

If your business has more than one incorporator, the initial board of directors should be appointed during an incorporators' organizational meeting before filing the lease. The appointed directors should then meet to approve corporate bylaws, decide the share construction, and solidify other matters before filing. That way, your business starts on the right human foot with plans clearly in identify.

Step 3: Choose a Tennessee registered agent

A registered amanuensis is a person or entity that receives service of process and state correspondence on behalf of the corporation. Service of process tin can include legal documents, such as court summons. When filing your lease, y'all must listing a registered agent who is an private or entity with a physical address (non a P.O. box) in the state of Tennessee.

All corporations must maintain a registered amanuensis with a business concern address at the same street address every bit the registered role. The registered agent must be bachelor during normal business concern hours and may be:

an individual who resides in Tennessee;
a Tennessee for-profit or not-profit corporation, LLC, or registered limited liability partnership (LLP); or
a strange (out-of-state) for-profit or not-profit corporation, LLC, or registered LLP that is authorized to transact business in Tennessee (T.C.A. § 48-249-109(a)(2)).

We highly recommend going with a registered agent service for simplicity and protection. We can connect you with a registered agent service in Tennessee with 1 of our packages.

Step 4: File the Tennessee Corporate Charter

Filing the charter registers and establishes your business with the state. In this document, you lot will need to include:

The name of your business organization, forth with the chosen corporation designator
If the company is a financial institution, such as a bank or trust company, this designation will need to be listed
Name and address of the registered agent
Fiscal year schedule
The number of authorized shares of stock (this is often determined by the directors or the incorporators)
The business organisation address of the primary function or location of the business
Name and address of all incorporators
An indication as to whether the corporation volition provide professional services and what those services are
Signature and name of the incorporator

This filing may be completed online on the Tennessee Secretary of State's website or by mail, sent to:

Business organization Services Partition
Tre Hargett, Secretarial assistant of State
Land of Tennessee
312 Rosa L. Parks Avenue, 6th Floor
Nashville, TN 37243-1102

You'll need to include the filing fee (bank check the Tennessee Secretary of State website for the current fee).

Step 5: Create corporate bylaws

The adjacent stride is to accept the incorporators or the directors create the corporate bylaws. The bylaws establish all of the rules and daily activities of your business organisation. This is a good thought, but Tennessee also requires information technology for all corporations.

Your corporation's bylaws may include:

A clear statement of your business organization purpose
A list of founders and the rights, responsibilities, and qualifications of each
A list of the directors and the rights, responsibilities, and qualifications of each
Details of your management structure and the duties of each officer
The annual coming together scheduling and goals for directors and shareholders
How ownership and shares are distributed and how the stock is sold or transferred
How changes are made or voted on
Procedures for adding and removing members of the board of directors
Rules for amending the bylaws
Details of any committees and their responsibilities
How conflicts of interest are to be handled

Store your Tennessee corporation bylaws

While yous're not required to file your bylaws, by law you must keep them in a rubber location with whatsoever other corporate records. It's good to set up a corporate records book where yous tin keep all of your important papers. This corporate records volume can include bylaws, minutes from meetings, and stock certificates.

Since the bylaws are a legally bounden document, it's wise to seek assist when creating them. You lot can utilize our customizable template to get started.

Stride vi: Draft a shareholder agreement

Next on the list of things to tackle is the shareholder agreement. This is a document that outlines the rights and responsibilities of all shareholders and may include:

The names of all shareholders and their contact information (address, telephone number, etc.)
Shareholder responsibilities, including any actions that shareholders are allowed to accept on behalf of the business organisation
Shareholder voting rights, including whether a simple majority or higher per centum may exist needed for certain decisions
How changes to the original agreement may be made
How stock can be sold or transferred
The fiscal obligation and fourth dimension commitment for each shareholder
A articulate outline of how dividends are distributed
A program for the distribution of avails should the business concern shut

Over again, this agreement tin exist drafted from a template, but you may want to employ professional help. Your shareholder agreement should exist kept with your other important corporate records.

Footstep seven: Issue shares of stock

In one case your business is registered and rules are in identify, it'southward time to issue stock. When y'all filed the charter, you lot stated the number of stock shares authorized. The number of shares you issue should e'er be fewer than or equal to this number.

Stock may be issued publicly or privately. Privately issued stock is unremarkably issued to the founders, employees, or a private group of investors. A public corporation makes a portion of its stock shares available for public purchase.

Shares of stock are how your company gets funded. The funds you apply to get started are called capital. Before issuing stock, you should determine how much capital is needed. You can then divide this value amidst the stock shares you lot will issue to shareholders.

Note that when initially issuing shares, some may be issued as compensation for helping showtime the business. As a result, the shareholder they go to does non contribute budgetary capital for them, and this should exist accounted for when determining share price.

Each share is simply issued once, merely after issuance, shares can be traded and sold. All issued shares must be documented in the company's annual report. Companies issuing public stock need to file quarterly statements with the Securities and Commutation Committee (SEC). They must besides track how many shares are issued and to whom. Yous should also check with the Tennessee Section of Commerce and Insurance to run across what might be needed at the state level.

Pace viii: Apply for necessary business licenses or permits

If professional person services are function of your business, yous'll need to make sure you're licensed with the proper licensing bureau.

In Tennessee, most businesses are required to take a business license from the local county clerk. Some cities take their ain business organization license requirement, every bit well. Bank check with your local canton and/or municipal clerk'southward part for details and how to file. You must also register to pay a special tax for businesses.

Bank check at the local level for any business licenses or permits required past your city, depending on your business type and activities. You'll also need to research any federal and/or state licensing is required for your corporation.

Step nine: File for an EIN and review tax requirements

Since corporations are treated every bit singled-out entities separate from the people involved in them, they require a federal employer identification number (EIN). This number acts like the corporation'southward Social Security number for tax purposes.

To utilize for an EIN, you demand to visit the IRS website. The application tin can be completed online for free, after which you will receive your EIN. You should go on rail of this number, as you lot will need it for future documentation and filing your business'southward tax returns.

Recollect that corporations must pay their own taxes separate from whatsoever taxes paid on shareholders' earnings. This must be done at the federal as well as state levels by submitting the advisable return each year. You tin can register your business for paying Tennessee land taxes here.

Other Tennessee Corporation Taxes

Corporations in Tennessee must pay franchise and excise taxes. Franchise taxes are based on net worth, while excise taxes are based on net earnings or income. Yous tin annals online for these.

Well-nigh all businesses selling goods or services in Tennessee will also accept to pay a gross receipts tax the state merely calls a Business organization Taxation. This is really two taxes in one, a country tax and a metropolis tax. The country has an extensive guide to understanding this taxation hither, simply the minimum you take to pay is $22 per year.

Step 10: Submit your corporation'southward starting time annual written report

In Tennessee, all corporations are required to file an annual report to update information with the country. Reports are due by the first day of the fourth month following the end of the company's fiscal twelvemonth.

Your Tennessee annual report can be filed online through the Tennessee Secretary of State'southward website or printed and mailed. A filing fee is required with an additional fee if any changes are fabricated to the registered agent information.

How much does information technology toll to start a corporation in Tennessee?

The cost of starting a Tennessee corporation can vary considerably, depending on the size and blazon of business and location. At a minimum, you will need to pay the fee for filing the charter. Additional fees may include:

Registered agent service costs
Name reservation fee
Assumed proper noun fee
Fees to reserve a domain name and create a website
Fees for assist with paperwork
Licensing and permit fees
Almanac report fee
Fees assessed for amendments or other business concern filings
Costs for an accountant or tax consultant
Costs associated with renting space

We can assistance convalesce whatsoever stress of getting your corporation off the ground past assisting with many of the required steps for a low annual fee.

What are the benefits of a Tennessee corporation?

Many benefits come with starting a corporation in Tennessee. As a business type, the benefits of a corporation include:

Protection of personal assets
Legal recognition as a divide entity in and outside the U.S.
The ability to upshot stock (which can help with funding)

However, there are disadvantages you lot should likewise be aware of to make an informed decision. The disadvantages are the tax structure (nigh corporations are taxed at both the corporate level and over again at the individual shareholder'due south level), and the fact that there's a lot more red record and paperwork involved than other structures, such as limited liability companies (LLCs).

How is a Tennessee corporation taxed?

How your corporation is taxed in Tennessee depends on whether information technology is a C corporation, an S corporation, or a nonprofit.

Types of Tennessee Corporations

C corporations are taxed as separate entities, and most Tennessee corporations will have to pay a franchise revenue enhancement, an excise tax, and the Concern Taxation, equally stated in a higher place. Shareholders also pay taxes on their dividends.

S corporations, on the other hand, are pass-through entities. All profits are passed through to the business owner or owners, who must pay taxes on them. Yet, in Tennessee, this simply applies to federal taxes, as the country does non recognize the S corporation condition. For taxes from the state, your South corporation will basically exist taxed simply as a C corporation would.

Nonprofit corporations can utilize to exist exempt from paying federal and state taxes, provided they stay within the rules for nonprofit activity. However, anyone drawing a salary from a nonprofit corporation volition pay income tax on that bacon.

Visit the Tennessee Department of Acquirement webpage for more than data nearly additional taxes your corporation may be responsible for, including sales and use tax.

Disclaimer: The content on this page is for advisory purposes only, and does non constitute legal, tax, or accounting communication. If yous have specific questions about any of these topics, seek the counsel of a licensed professional.

Tennessee Corporation FAQs

Does running a corporation in Tennessee involve more paperwork than running other types of business organisation entities?

Because corporations are more than complex in construction, they often come with more paperwork than a simpler concern model, such as a limited liability visitor (LLC).

This includes corporate bylaws, the shareholders' agreement, and reports.
What is the difference between an LLC and a corporation in Tennessee?

An LLC is a laissez passer-through entity for revenue enhancement purposes, and it is useful in keeping the owners' assets dissever from business assets.

However, LLCs do not have a directors, practise not issue shares, and aren't recognized internationally.
How practise I alter my corporation'southward proper name in Tennessee?
You can change the name of your corporation in Tennessee by filing Articles of Subpoena with the Secretarial assistant of State. You lot must as well pay a filing fee for this.
How many people are needed to form a corporation in Tennessee?
A single person tin class a corporation in Tennessee.
Can I form my Tennessee corporation online?
Yous can form your Tennessee corporation online through the Tennessee Secretary of State website.
How do I dissolve my Tennessee corporation?
To deliquesce your corporation, y'all will take to file the Articles of Dissolution and pay a filing fee.

Source: https://www.zenbusiness.com/tennessee-corporation/

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