Form a Partnership in Tennessee
Everything you need to know about forming a Partnership in Tennessee. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Partnership Name
Select a business name that complies with Tennessee naming rules. For limited partnerships, the name must include 'Limited Partnership,' 'LP,' or 'L.P.'; general partnerships operating under a trade name should conduct a name search on the Tennessee Secretary of State's website to confirm availability.
30 minutes
Draft a Partnership Agreement
Although not legally required in Tennessee, a written partnership agreement is strongly recommended to define each partner's roles, profit and loss sharing, decision-making authority, and dissolution procedures. This document governs the internal operations of the partnership.
2-5 hours
Designate a Registered Agent
Appoint a registered agent with a physical street address in Tennessee who is available during normal business hours to receive legal and official documents on behalf of the partnership. The agent can be an individual partner or a professional registered agent service.
30 minutes
File Formation Documents with the State
General partnerships may file a Statement of Partnership Authority (optional but recommended for liability purposes) with the Tennessee Secretary of State for $50. Limited partnerships must file a Certificate of Limited Partnership with the Secretary of State for $100, either online via the Tennessee Business Services portal or by mail.
1-2 hours
What's Next After Filing
Once your Partnership is officially formed, you'll want to complete these important steps:
- •Obtain an EIN from the IRS — Apply for a Federal Employer Identification Number (EIN) through the IRS website at no cost. An EIN is required for tax filings, opening a business bank account, and hiring employees, even if the partnership has no employees initially.
- •Register for Tennessee State Taxes — Register with the Tennessee Department of Revenue for applicable state taxes, including sales and use tax if selling taxable goods or services, and the Tennessee business tax if applicable. Registration can be completed online through the Tennessee Taxpayer Access Point (TNTAP).
- •Obtain Required Licenses and Permits — Research and obtain any required local, county, and state business licenses or professional permits relevant to your industry. Most Tennessee businesses must register with their local county clerk's office and pay an annual business tax registration fee.
Advantages
- ✓Simple and inexpensive to form, especially general partnerships which require minimal paperwork and no mandatory state filing
- ✓Pass-through taxation means partnership income is reported on partners' personal returns, avoiding double taxation at the entity level
- ✓Flexible management structure with no board requirements or complex corporate formalities mandated by Tennessee law
- ✓Easier profit-sharing arrangements and operational flexibility compared to corporations, governed primarily by the partnership agreement
Considerations
- •General partners face unlimited personal liability for business debts, obligations, and legal judgments, putting personal assets at risk
- •Partnerships dissolve upon the death, withdrawal, or bankruptcy of a general partner unless the partnership agreement specifies otherwise
- •Raising capital can be more difficult than corporations since partnerships cannot issue stock or easily bring in passive investors
- •Partners may be bound by actions taken by other partners under agency law, creating potential liability for unauthorized decisions
Annual Obligations
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