A sole proprietorship is the simplest business form to register in Tennessee. You can just start working under your legal name and use your Social Security Number as your tax ID. However, you might want to use a business trade name or hire employees. In these situations, you’ll need to set up a sole proprietorship.
If your Tennessee sole proprietorship involves selling taxable goods or services, you may need to register for a Tennessee Sales Tax Certificate to collect and remit sales tax. In a sole proprietorship, the owner is personally liable for the business’s debts and obligations. This means personal assets are at risk in case of business-related liabilities.
You can hire employees as a sole proprietor in Tennessee. This may require obtaining an EIN and complying with employment laws. The filing and issuing of DBA’s for sole proprietorships is done at the county level in Tennessee. To register your DBA, you’ll need to submit your Assumed Name application to the county clerk’s office and pay a filing fee. Sole proprietorships are subject to business and professional licensing requirements. Licenses are issued at the federal, state, and local levels.
Steps to Start Your Business
- Discover steps to start a business in Tennessee!
- Establish a business considering a large population—opportunities to cater to many customers.
- Follow the guide on starting a business.
Who is exempt from a business license in Tennessee?
- Businesses with less than $10,000 in taxable sales are exempt from taxes.
Do sole proprietors pay business tax in Tennessee?
- If your annual gross sales exceed $100,000, you need a standard business license.
- For sales between $3,000 and $100,000, you need a minimum activity license.
Does Tennessee require a business license to be self-employed?
- To dissolve a Tennessee sole proprietorship, you simply cease operations. There is no dissolution paperwork required.
- The types of licenses required will vary widely depending on the nature of your business and how it operates.