An LLC, or Limited Liability Company, can offer a business owner a number of advantages. As an LLC, you can benefit from limited liability protection, which ensures that your personal assets won’t be at danger if your company runs into legal issues. Additionally, becoming an LLC can assist you in expanding your company, obtaining more money, and establishing the legitimacy of your brand. In Tennessee, changing from a sole proprietorship to an LLC may be a smart move. The actions you must follow to make the changeover are shown below.
You must select a name for your new company entity before you can submit the necessary documents to register as an LLC. Make sure the name you select is distinct from any existing company with the same name registered in Tennessee. The Tennessee Secretary of State’s database can be used to see whether your desired name is available.
Articles of Organization must be submitted to the Tennessee Secretary of State in order to form an LLC there. This document serves as the necessary legal documentation to formally establish your LLC. You must include details like your company name, the name and address of your registered agent, and the members’ names and addresses of the LLC.
A unique nine-digit tax identification number given by the IRS is known as an EIN, or Employer Identification Number. An EIN is required to open a bank account, hire staff, and file taxes. Through the IRS website, you can submit a free online EIN application.
You must modify any business licenses or permits that your sole proprietorship previously held to reflect your new LLC status. A local business license, a state tax permission, or a license for a particular industry can fall under this category. What Does DBA Legally Mean?
DBA, which stands for “doing business as,” is a legal term for a company that conducts business under a name different than its official name. If John Smith, for instance, runs the sole proprietorship “John Smith’s Landscaping” but wishes to market his company as “Green Thumb Landscaping,” he can legally use that name by submitting a DBA.
You are essentially giving your company an alias when you file a DBA. As a result, you can conduct business under a different name without having to establish a different legal corporation. It’s crucial to remember that a DBA does not offer your company any kind of legal or liability protection.
It’s often advised to open a separate bank account for your business using the DBA name, even though a DBA is not a distinct legal organization. This can make it simpler for you to keep your personal and corporate funds separate and maintain tabs on your earnings and outgoings.
You must include both your legal name and the name you intend to use for your business when you file a DBA. Your legal name must be spelled exactly as it appears on any identity provided by the government or other official papers. If you are operating under a name other than your given name, you must follow the complete name of your company with “doing business as” and your selected name. An illustration might be “John Smith’s Landscaping, doing business as Green Thumb Landscaping.”