Great job on taking the next step to launch your business and guard your assets! There were no formal filings that you had to do with the state as a sole proprietor. But now that you have a state recognized entity that you need to keep in good standing that changes a bit.
The following are what you will need each year once you have set up your TN LLC:
- You will need to file an annual report for your LLC with the state. The fee to file this report is $50 per member, with a minimum fee of $300 and a maximum fee of $3,000. This report is due by April 1 for businesses with a standard calendar business year.
- You will need to pay the applicable franchise tax on your business. This amount is calculated based on your LLC’s net worth or the value of real and tangible property of the LLC in TN. The minimum amount of franchise tax you’ll be required to pay is $100 and it is due by April 15 for businesses with a standard calendar business year.
- From the IRS perspective, your single member LLC is a disregarded entity. You’ll continue to report your income and loss on a Schedule C to your 1040 and this will flow over to your state return for income tax purposes.
- If you are selling products, you will also need to collect and remit sales tax. This will require filing your sales and use tax returns.
- Depending on what type of business you are running, you may also need to obtain a business license. It will be important that you renew this when needed and keep it active.
These are just the basics. If you have questions about additional steps that may be specific to your business, LawTrades can offer you a free 20 minute consultation with an experienced business attorney who can help you make sure you have your bases covered. Our network provides affordable, flat rate legal services to entrepreneurs from our network of vetted professional attorneys.