Business Formation Documents: A Complete Guide for Small Business Owners

Introduction

Key Things to Know

1. 1

   Your choice of business structure (sole proprietorship, partnership, LLC, corporation) determines which formation documents you need and affects taxation, liability, and operational requirements.

2. 2

   MWBEs should prepare additional documentation for certification programs that can provide access to special contracting opportunities and resources.

3. 3

   Formation documents should anticipate future growth and include provisions for adding investors, changing ownership, or expanding operations.

4. 4

   State requirements vary significantly, so research your specific state's filing procedures, fees, and ongoing compliance obligations.

5. 5

   Working with a business attorney to draft or review your formation documents is an investment that can prevent costly legal issues in the future.

6. 6

   Proper formation documents not only establish your business legally but also create the foundation for business relationships, financing opportunities, and eventual business sale or succession.

7. 7

   Keep your formation documents updated as your business grows and changes to ensure they continue to serve your needs and comply with current laws.

Tennessee Requirements for Business Formation Documents

• Entity Type Selection (Tennessee Code Annotated § 48-11-101 et seq. (LLC); § 48-12-101 et seq. (Corporations))

  Specification of the business entity type (LLC, Corporation, Partnership, etc.) in accordance with Tennessee law, which determines tax treatment, liability protection, and operational requirements.

• Articles of Organization/Incorporation (Tennessee Code Annotated § 48-203-102 (LLC); § 48-12-102 (Corporations))

  Filing requirements for formal registration of the business entity with the Tennessee Secretary of State, including required information such as business name, registered agent, principal office, and management structure.

• Business Name Compliance (Tennessee Code Annotated § 48-207-101)

  Requirements for business name selection, including name availability, distinguishability from existing entities, and required designators (LLC, Inc., etc.).

• Registered Agent Designation (Tennessee Code Annotated § 48-208-101)

  Requirement to maintain a registered agent with a physical address in Tennessee who can receive legal documents and service of process on behalf of the business.

• Operating Agreement/Bylaws (Tennessee Code Annotated § 48-206-101 (LLC); § 48-18-101 et seq. (Corporations))

  Internal governance documents outlining ownership interests, voting rights, management structure, profit distribution, and operational procedures.

• Business Tax Registration (Tennessee Code Annotated § 67-4-701 et seq.)

  Registration requirements for Tennessee business tax collection, including sales tax permit if selling taxable goods or services.

• Franchise and Excise Tax Compliance (Tennessee Code Annotated § 67-4-2001 et seq.)

  Registration and compliance with Tennessee's franchise and excise taxes applicable to most business entities operating in the state.

• Business Licenses and Permits (Tennessee Code Annotated § 67-4-701 et seq.)

  Requirements for obtaining necessary state and local business licenses and permits based on business location and industry.

• Workers' Compensation Insurance (Tennessee Code Annotated § 50-6-101 et seq.)

  Requirements for workers' compensation insurance for businesses with five or more employees in Tennessee.

• Employer Identification Number (26 U.S.C. § 6109)

  Requirement to obtain a Federal Employer Identification Number (EIN) from the IRS for tax reporting and employee management.

• Securities Compliance (Tennessee Code Annotated § 48-1-101 et seq.; Securities Act of 1933 (15 U.S.C. § 77a et seq.))

  Compliance with federal and state securities laws when issuing ownership interests, including potential exemptions and disclosure requirements.

• Tax Election Provisions (26 U.S.C. § 1361 et seq. (S-Corporation); 26 U.S.C. § 701 et seq. (Partnership))

  Provisions addressing federal tax classification elections (S-Corporation status, partnership taxation) and their impact on the business structure.

• Intellectual Property Protection (15 U.S.C. § 1051 et seq. (Trademarks); 17 U.S.C. § 101 et seq. (Copyright); 35 U.S.C. § 1 et seq. (Patents))

  Provisions addressing ownership, protection, and transfer of intellectual property rights created by or for the business.

• Employment Law Compliance (Fair Labor Standards Act (29 U.S.C. § 201 et seq.); Tennessee Human Rights Act (T.C.A. § 4-21-101 et seq.))

  Provisions ensuring compliance with federal and Tennessee employment laws, including anti-discrimination, wage and hour, and workplace safety requirements.

• Privacy Policy Requirements (15 U.S.C. § 45(a) (FTC Act); California Consumer Privacy Act (for businesses serving California residents))

  Provisions addressing data privacy compliance for businesses collecting customer information, particularly for online operations.

• Dissolution Procedures (Tennessee Code Annotated § 48-24-101 et seq. (Corporations); § 48-245-101 et seq. (LLC))

  Procedures for voluntary dissolution of the business entity, including required filings with the Tennessee Secretary of State and asset distribution.

• Foreign Qualification Requirements (Tennessee Code Annotated § 48-25-101 et seq. (Corporations); § 48-246-101 et seq. (LLC))

  Requirements for Tennessee businesses operating in other states to register as foreign entities in those jurisdictions.

• Annual Reporting Requirements (Tennessee Code Annotated § 48-26-203 (Corporations); § 48-228-203 (LLC))

  Obligations to file annual reports with the Tennessee Secretary of State to maintain active business status, including filing deadlines and required information.

• Minority/Women-Owned Business Certification (Tennessee Code Annotated § 12-3-1107)

  Provisions addressing certification requirements and benefits for minority or women-owned businesses in Tennessee, including potential state contract preferences.

• Banking Resolution (Uniform Commercial Code (T.C.A. § 47-1-101 et seq.))

  Authorization for designated individuals to open and manage business bank accounts, including signing authority and financial controls.