Tennessee Pllc | Lovie — US Company Formation

A Professional Limited Liability Company (PLLC) in Tennessee is a business structure specifically designed for licensed professionals. Unlike a standard LLC, a PLLC offers liability protection while also adhering to state regulations that require certain professions to operate under specific entity structures. This structure is crucial for individuals like doctors, lawyers, accountants, architects, and other licensed practitioners who want to shield their personal assets from business-related debts and malpractice claims. Forming a Tennessee PLLC involves understanding the state's unique filing requirements, ongoing compliance obligations, and the specific rules governing professional service entities. It's a critical step for ensuring your practice operates legally and efficiently, providing both operational flexibility and personal financial security. Lovie is here to guide you through every step of the Tennessee PLLC formation process.

Understanding Tennessee PLLC Requirements

To form a Professional Limited Liability Company (PLLC) in Tennessee, you must meet specific criteria set forth by the state. Primarily, a PLLC is reserved for licensed professionals. This means that at least one member of the PLLC must hold a valid professional license in Tennessee to practice the specific profession the PLLC is formed to provide. Professions eligible for PLLC formation in Tennessee typically include, but are not limited to, law, medicine, dentistry, accounting, architecture, e

• PLLCs in Tennessee are exclusively for licensed professionals.
• The business name must include 'Professional Limited Liability Company' or an abbreviation.
• A registered agent located in Tennessee is mandatory.
• The state filing fee for Articles of Organization is $300.

LLC vs. PLLC in Tennessee: Key Differences

While both LLCs and PLLCs in Tennessee offer liability protection for their owners, their primary distinction lies in the type of business they can accommodate. A standard Limited Liability Company (LLC) is a flexible business structure suitable for a wide range of businesses, from retail stores and tech startups to consulting firms. Any individual or group can form an LLC, regardless of professional licensing. The liability protection in a standard LLC shields the personal assets of the members

• Standard LLCs are for any business type; PLLCs are for licensed professionals.
• Both structures offer protection of personal assets from general business debts.
• PLLCs do not shield individuals from liability for their own professional malpractice.
• Choose the structure that aligns with your profession's regulatory requirements.

Step-by-Step Guide to Forming a Tennessee PLLC

Forming a Tennessee PLLC involves several distinct steps, starting with selecting a business name. Your chosen name must be unique and include the designation "Professional Limited Liability Company," "P.L.L.C.," or "PLLC." You can check for name availability on the Tennessee Secretary of State's website. Once you have a name, you must appoint a registered agent. This individual or entity must have a physical street address in Tennessee and be available during normal business hours to accept ser

• Choose a compliant business name and secure a registered agent.
• File Articles of Organization with the Tennessee Secretary of State ($300 fee).
• Draft a comprehensive Operating Agreement, though not state-mandated.
• Obtain an EIN from the IRS for tax and banking purposes.

The Importance of a Tennessee PLLC Operating Agreement

An Operating Agreement is a foundational document for any LLC, and it's equally critical for a Tennessee PLLC. While the Tennessee Secretary of State does not mandate its filing, this internal document serves as the rulebook for your professional practice. It clearly defines the ownership structure, outlining each member's percentage of ownership and their respective rights and responsibilities. This clarity is essential for preventing misunderstandings and disputes among professional partners,

• An Operating Agreement governs internal PLLC operations, ownership, and management.
• It is crucial for outlining procedures related to professional conduct and malpractice.
• A strong agreement enhances the PLLC's legal standing and liability protection.
• It is highly recommended, even if not legally required by Tennessee.

Ongoing Compliance and Annual Requirements for Tennessee PLLCs

Operating a Professional Limited Liability Company (PLLC) in Tennessee requires ongoing attention to state and federal compliance. Beyond the initial formation, PLLCs must adhere to certain reporting requirements to maintain their good standing with the state. While Tennessee does not impose an annual franchise tax on LLCs or PLLCs, it does require businesses to file an annual report. This report is filed with the Tennessee Secretary of State and serves to update the state on your business's cur

• Tennessee PLLCs must file an annual report with the Secretary of State.
• The annual report filing fee is $300.
• The deadline for the annual report is generally April 1st for calendar-year businesses.
• Maintaining federal tax compliance, including payroll taxes if applicable, is essential.

Frequently Asked Questions

Can a non-licensed individual be a member of a Tennessee PLLC?

No, in Tennessee, a Professional Limited Liability Company (PLLC) is exclusively for licensed professionals. At least one member must hold a valid professional license in the state for the services the PLLC provides. Non-licensed individuals cannot be members, though they may sometimes be employees.

What is the difference between an LLC and a PLLC in Tennessee regarding liability?

Both LLCs and PLLCs in Tennessee offer protection of personal assets from general business debts. However, a PLLC does not shield individual members from liability for their own professional malpractice or negligence. An LLC is for general businesses, while a PLLC is specifically for licensed professionals.

How much does it cost to form a PLLC in Tennessee?

The primary cost is the $300 filing fee for the Articles of Organization with the Tennessee Secretary of State. There are also potential costs for a registered agent service and an EIN, if applicable. Annual reports also incur a $300 fee.

Do I need an Operating Agreement for my Tennessee PLLC?

While the state of Tennessee does not legally require a PLLC to file an Operating Agreement, it is strongly recommended. This internal document outlines ownership, management, and operational procedures, preventing disputes and clarifying roles.

Can I use any business name for my Tennessee PLLC?

No, your Tennessee PLLC name must be unique and distinguishable from other registered businesses in the state. It must also contain the words 'Professional Limited Liability Company' or an approved abbreviation like 'P.L.L.C.' or 'PLLC'.

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