Establish a Business Name
- Visit the Small Business Association website for tips on how to select your business name.
- The Secretary of State’s Business Name Availability database may be a helpful resource. You can search to see if your business name is already in use by a business chartered in the state.
- Building structures of brick and mortar will have a physical location address. If your business is online, your location address is the physical place where your records are maintained. A business's location address can not be a post office box.
- Your mailing address is where you will receive letters and other important documents from the Department of Revenue.
Determine Business Structure or Entity Type
Anyone who registers a business in Tennessee must ensure they indicate their business structure, which is necessary to establish tax accounts.
A sole proprietorship is typically one individual in business alone. Sole proprietorships are the most common form of business structure.
- The primary entity number for a proprietorship is the social security number (SSN) of the sole person.
- Federal name: Sole Proprietorship
- Ownership information needed: Name and SSN of owner.
An additional type of sole proprietorship is a marital joint account. Married individuals that own the business together can set up this business structure.
- The primary entity number for a joint ownership is the SSN of the primary spouse. However, the other spouse’s SSN is also needed. Upon registration, the state will assign a joint identification number to the business's tax account.
- Federal name: Sole Proprietorship—each spouse completes a separate Schedule C for their portion of earnings and attaches it to their 1040 federal income tax return.
- Ownership information needed: Names and SSNs of both spouses.
Registration for a sole proprietorship will be under the owner's legal name. However, the business's operational name, "doing business as" name (DBA), may be entered during the registration process.
A general partnership is an entity composed of two or more persons who agree to contribute money, labor, and/or skill to a business. Each partner shares the profits, losses, and management of the business and each partner is personally and equally liable for debts of the partnership.
- The primary entity number for a partnership is the entity’s federal employer identification number (FEIN).
- Federal name: General Partnership.
- Ownership information: Name and social security number (if available) of each owner.
A limited partnership (LP) or limited liability partnership (LLP) is a business type composed of one or more general partners and one or more limited partners. The general partners have full management and control of the business and have full personal responsibility of all debts and liabilities of the business. The limited partners have no personal responsibilities for debts and liabilities beyond the amount of their investment interest and cannot participate in the management of daily operations.
- The primary entity number for a partnership is the entity’s FEIN.
- Federal name: Limited Partnership.
- Ownership information: Name and social security number (if available) of the general partner.
A single-member limited liability company (SMLLC) is formed by one individual or entity through a special written agreement. This entity has one member.
- The primary entity number for the LLC is the owner’s social security number or an entity’s federal employer identification number (FEIN).
- Federal name: Limited Liability Company.
- Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the SMLLC.
A multi-member limited liability company (MMLLC) is formed by one or more individuals or entities through a special written agreement.
- The primary entity number for a multi-member LLC is either a person’s social security number or the owning entity’s FEIN.
- Federal name: Limited Liability Company.
- Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the LLC.
A professional limited liability company (PLLC) is formed under a state professional limited liability company law and is a company engaged in the rendering of professional services.
- The primary entity number for a PLLC is the entity’s federal employer identification number (FEIN).
- Federal name: Professional Limited Liability Company.
- Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the PLLC.
Corporations have more complex business structures. As a chartered legal entity, a corporation has its own rights, privileges, and liabilities. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control. Corporations may be formed for profit or nonprofit purposes. Corporations chartered in Tennessee are Tennessee domestic corporations. Corporations chartered in other states are foreign corporations.
- The primary entity number for a corporation is the entity’s federal employer identification number (FEIN).
- Federal name: Corporation, C Corporation.
- Ownership information: Name and social security number or FEIN (if available) of the person or entity owning the corporation.
A S corporation is one which has elected S status and is generally exempt from federal income tax other than on certain capital gains and passive income. Its shareholders include on their tax returns their share of the corporation's separately stated items of income, deduction, loss, and credit. These amounts are referred to as "flow through item."
- The primary entity number for an S Corp is the entity’s FEIN.
- Federal name: S Corporation.
- Ownership information: Name and social security number or FEIN (if available)of the person or entity owning the S corporation.
Register Your Business with the Secretary of State
Any corporation, limited partnership, limited liability company or business trust chartered/organized in Tennessee or doing business in this state must register with the secretary of state and file annual reports. Click here for more information.
Determine Effective Business Start Date
The effective business start date is the date tax obligation begins. If you have chartered with the Secretary of State prior to registering with Department of Revenue, you will use the effective date of the charter.
Apply for an Employer Identification Number (EIN)
An employer identification number (EIN) is also known as a federal tax identification number and is used to identify a business entity. Generally, businesses need an EIN. However certain business structures do not need to provide an EIN and use a social security number (SSN) instead.
Identify Your Business NAICS Code
A NAICS Code is a North American Industry Classification System Code. It is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. The Department of Revenue requires a NAICS code for all business tax and sales tax registrations.
Use this website to help you determine your NAICS code.
Determine Fiscal Tax Year
You must figure your taxable income on the basis of a tax year. A “tax year” is an annual accounting period for keeping records and reporting income and expenses. An annual accounting period does not include a short tax year.
The tax years you can use are:
- Calendar year - 12 consecutive months beginning January 1 and ending December 31.
- Fiscal year - 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.
Identify Directors, Officers, and Shareholders
A typical corporation's structure consists of directors, officers, and shareholders. The officers handle the day-to-day operations of the business, the directors oversee the affairs of the organization and protect the interests of the shareholders, while the shareholders are looking for a return on their investment. One of the first steps a new corporation will take is to name the members of its board of directors.
When registering your business as a corporation, you must provide an address, phone number and social security number for each officer or shareholder.