Tennessee residents who own Limited Liability Companies (LLCs) are liable for both federal and state taxes. Since LLCs are treated as pass-through organizations for tax purposes in Tennessee, the company itself is not taxed on its income. Instead, the LLC’s gains and losses are distributed to each member individually, who then reports them on their individual tax returns.
Tennessee LLCs are exempt from state income tax because the state of Tennessee does not have one. However, a yearly franchise tax is due by LLCs in Tennessee. Regardless of the LLC’s earnings or losses, the franchise tax is a fixed amount of $300 each year.
In Tennessee, LLCs may be liable to additional state taxes such as the sales tax and use tax in addition to the franchise tax. An LLC must gather and send Tennessee’s sales tax to the state whenever it sells products or services there. Similar to this, an LLC might need to pay use tax if it buys products or services to use in Tennessee.
A registered agent is a person or business that an LLC appoints to accept legal documents on its behalf. You must choose a registered agent and include their name and address in the articles of organization when incorporating an LLC in Tennessee. In order to receive legal documents, your registered agent must have a physical address in Tennessee and be accessible during regular business hours.
It’s crucial to pick a trustworthy and accountable person for your registered agent. It is crucial to select a person who will swiftly notify you of any such documents because your registered agent will be in charge of receiving crucial legal documents, such as lawsuits and government notices. Risks Associated with Serving as a Registered Agent You should be informed of the potential hazards if you decide to serve as your own registered agent. You will be expected to accept legal documents on behalf of your LLC as the registered agent. The legal standing of your LLC may be in jeopardy if you don’t receive or reply to these documents on time.
Additionally, if you serve as your own registered agent, the LLC’s registration address will be publicly disclosed to be your home address. This could lead to unsolicited letters and other types of solicitations.
A member of an LLC is referred to as the owner. Members may be people, businesses, or other LLCs. Members’ personal assets are often shielded from corporate creditors and they are not personally accountable for the debts or obligations of the LLC. Managing members of an LLC Owners of an LLC are not always the same as its managers. An LLC may even include managers who are not at all members. Managers are in charge of running the LLC’s day-to-day operations and making business decisions on the organization’s behalf. They might not necessarily have stock in the business, though.