A glance into the processes of starting a business in Tennessee:
We see people every month, if not every week, starting a new business. In most cases, we are helping the client understand the basics of the different types of entities and what best suites them based on their needs and desired outcome of the business in the long term.
Currently, most new businesses are choosing either to be a Limited Liability Company (LLC) or a Sub-Chapter S Corporation (S-Corp). In either case, there are certain reporting and registration requirements with both types of entities in the state of Tennessee.
The following is a quick checklist of the processes that need to be undertaken in order to be in compliance with these ongoing requirements:
Apply for an Employer Identification Number (EIN).
This number will be used for a multiple of items:
- Preparing annual tax returns
- Federal payroll returns
- Setting up a bank account in the Company’s name
Register with the Tennessee Secretary of State.
A Company will need to file annual reports in order to keep legally active.
Register with the Tennessee Department of Revenue for various taxes
A few of the more usual taxes that are required:
- Business tax (County and City)
- Sales tax
- Franchise and Excise taxes
Obtain a business license with the local municipalities (County and City)
If the company will have employees – register with the Tennessee Department of Labor and Workforce Development (State Unemployment Taxes)
All these items are normal and necessary processes of starting a business. We encourage clients to think of the professionals at TH&W as partners when it comes to registering, advising and planning business strategies; whether it’s tax, budgeting, or forecasting possible outcomes.
We encourage you to give us a call before taking the leap into the business world to ensure that you are starting out in the right direction.
Kevin C. Sizemore, CPA