How to Register a Sole Proprietorship in Tennessee

By Elizabeth Rayne

Tennessee has no filing requirement to register a sole proprietorship. Instead, the entity is legally formed when a business transaction is completed. A sole proprietorship may remain unincorporated, and the sole owner of the proprietorship owns all of the business's assets and is personally liable for its debts. However, a sole proprietor should take a number of steps to comply with tax law and local business licensing requirements.

Step 1

Search for the availability of your fictitious business name if you wish to do business under a different name than your own. Although it is not a legal requirement in Tennessee for sole proprietorships to register their fictitious business name, the search will assure that there is no other business in the state with the same name. To complete the search, visit the Tennessee Secretary of State website. From there, click on "Business Services," then select "Business Name Availability" under "Business Search Services." Type in your desired business name to find out if it is available.

Step 2

Apply for a business license in the county where you plan to do business. There is no requirement to obtain a business license at the state level, so you must contact your local town or county clerk to discover the filing requirements for a business license. Ask the clerk if there are any other required licenses for your type of business. Some professions require professional licenses or permits that must be acquired at the state level in Tennessee.

Ready to start your LLC? Start an LLC Online Now

Step 3

Apply for an Employer Identification Number. An EIN is a distinct number for your business enterprise that will be used on tax documents, and may also be used for your bank account. To apply for an EIN, visit the Internal Revenue Service's EIN web page and click on "Apply for an EIN Online." From there, follow the on-screen directions, and you will be issued an EIN.

Step 4

Register for Tennessee state taxes. If your business will involve manufacturing, selling or renting personal property or providing taxable services, you must apply for a Certificate of Registration with the Department of Revenue. Visit the Tennessee Department of Revenue's Online Tax Registration page to register your business and obtain a Certificate of Registration.

Step 5

Pay federal and state taxes. There is no federal corporate tax for sole proprietorships, but the income will pass to the owner as personal income. Further, depending on the type of business, you may be liable to the state for sales or use tax, franchise tax, alcoholic beverages tax or other taxes. In addition to the state taxes, all businesses must pay a local business tax in their county.

Ready to start your LLC? Start an LLC Online Now
How to Form a Sole Proprietorship in Ohio

References

Related articles

Do You Need a DBA for Sole Proprietorship?

A sole proprietor can work under her own name or operate under a catchy business nickname. A DBA, which stands for "doing business as," can help you create a marketable trade name and identity. State laws regarding DBAs vary. A reputable, online legal document provider can complete DBA registration requirements that may apply to you.

How to Set Up a Sole Proprietorship Using a DBA

A sole proprietorship functions as an alter ego of its owner. State law requires you to operate the business under your own name, so the public knows who to hold responsible for business activity. For example, a personal trainer named John Smith must have his customers pay him by writing a check to “John Smith.” He cannot call his sole proprietorship “In Shape Personal Training” and operate under that name unless he registers the name with the state as a fictitious business name, also known as a “doing business as” (DBA). Most states process DBAs at the county level, so the name registration is only good in that one county. A few states, like Florida, process DBAs at the statewide level, which entitles the owner to use the name anywhere in the state.

What Forms Need to Be Filed for a Sole Proprietorship?

A sole proprietorship is one method of organizing and operating a business. A sole proprietorship operates as an alter ego of the owner, not as an independent legal entity, giving the sole proprietor complete control of the business. Depending on your state, you may or may not need to file a form to create a sole proprietorship. However, you should contact the Secretary of State's office to determine the proper procedure. For example, the state of Indiana requires all sole proprietors to register with the Indiana Department of Revenue by submitting a Business Tax Application if the business sells products or food.

LLCs, Corporations, Patents, Attorney Help

Related articles

Sole Proprietorship in Charlotte, NC

Sole proprietorships are a common business structure because they are relatively simple to set up, and provide for ...

Rules and Regulations for a Sole Proprietorship

Starting your new business as a sole proprietorship is the easiest and least expensive legal business structure you can ...

How to Get a Sole Proprietorship

For an independent entrepreneur, a sole proprietorship is a common business structure because it is relatively simple ...

The Requirements of a Sole Proprietor in Pennsylvania

Sole proprietorships are common business entities because they are simple to set up, and have relatively few filing ...

Browse by category
Ready to Begin? GET STARTED