Is a Tennessee LLC suitable for a small property maintenance business?

LLC is generally a good idea for any business that involves going onto other people's property. Liability protection is the main reason. If you damage something or someone gets hurt, you want that separation. Sole prop puts your personal assets on the line.

I run a small landscaping LLC in TN. The filing fee is $300, annual report is $300. It's not cheap but it's worth it for the liability. Just make sure you keep personal and business finances separate or the prote ction doesn't mean much.

Is the annual report really $300? I thoughT it was $50 for the first year and then $300 after. Might want to double check that.

You're right, it's $50 for the first annual report due in the year after formation. Then $300 each year after. My mistake.

Also in TN. One thing I'd add is that if you're doing any work that requires a contractor license, the LLC structure might affect how you qualify. But lawn care and gutter cleaning probably don't need one. Small repairs might depending on the scope.

I started as a sole prop for two years and then switched to LLC when I got a bigger client that required it. If you're just starting out and money is tight, sole prop isn't the worst choice. But if you can afford the filing fee, LLC is cleaner. Just my two cents.

grit_and_grind makes a good point. Also, some commercial clients won't hire you unless you're an LLC or incorporated. It's a credibility thing.

Nobody mentioned the operating agreement yet. You don't technically have to file it wiht the state but you should have one, even if you're the only member. It lays out how the LLC is run. Most banks will want to see it if you open a business account.

I've been a sole prop for 15 years doing handyman work. Never had an issue. But I also carry a good general liability policy. The LLC isn't a substitute for insurance. If you're worried about liability, insurance is the first thing you should get, LLC second.

Agree with velvet_antler. Insurance is non-negotiable. LLC won't protect you from everything aNyway. If you personally do something negligent, they can still come after you.

One more thing - the franchise tax in TN. It's based on your net worth. If you're a small operation with minimal assets, it's usually the minimum $100. Just factor that in.