How to Register a Sole Proprietorship in Tennessee

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A Tennessee sole proprietorship appears as an unincorporated business that operates with a single owner. Under Tennessee state law, sole proprietors have unlimited liability for business debts and obligations. A sole proprietor in the state of Tennessee need not file any documents with the state as a condition of formation. According to Tennessee state law, a sole proprietorship formation occurs when an individual makes a business transaction.

  • Apply for a business license. According to the Tennessee Chamber of Commerce website, a sole proprietor in the state of Tennessee need only obtain a business license from the county or municipality where the business operates. A Tennessee sole proprietorship and its owner are one in the same. In other words, a sole proprietorship in the state of Tennessee has no existence without the owner.

  • File a fictitious business name, also referred to as an assumed business name. Sole proprietors in the state of Tennessee that wish to operate under a name other than their personal name must file a fictitious business name with the Tennessee Department of State's office. The business name selected by the sole proprietor must not belong to another registered entity in the state of Tennessee. Conduct an online name availability search on the Tennessee Department of State website.

  • Apply for a federal tax ID number. Sole proprietorships in the state of Tennessee with employees must obtain a federal tax ID number from the IRS. Tennessee sole proprietors may obtain a federal tax ID number by phone, fax, online or mail. Phone and online inquiries allow a Tennessee sole proprietor to receive a federal tax ID number for immediate use. Sole proprietors in Tennessee that elect to fax Form SS-4 to the IRS will wait up to four business days to receive a federal tax ID number. Tennessee sole proprietors that choose to mail Form SS-4 may wait as long as four weeks to receive a federal tax ID number.

  • Register for Tennessee state taxes. Sole proprietorships in the state of Tennessee with employees must apply for a state tax ID number. Furthermore, Tennessee sole proprietorships with employees must register for workers' compensation insurance, as well as state unemployment taxes. Tennessee sole proprietorships must present fictitious business name paperwork, if applicable, and a federal tax ID number in order to obtain a Tennessee state tax ID number. Employers that operate as sole proprietors in the state of Tennesee must register for workers' compensation insurance, as well as state unemployment taxes, with the Tennessee Department of Labor and Workforce Development.

  • Apply for Tennessee licenses and permits. The permits and licenses required for sole proprietors to operate in the state of Tennessee will depend on the nature of the business. Barbers, accountants and other professionals that operate as sole proprietors in Tennessee must obtain a state occupational license. Sole proprietors involved in retail sales will need to acquire a sales and use tax permit from the city clerk's office. Furthermore, a Tennessee sole proprietor may be required to obtain certain zoning permits depending on the location of the business. Contact the city or county clerk's office to determine license and permit requirements for the sole proprietorship.

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