Quick answer

Quick Answer

To start a Tennessee LLC, you must file Articles of Organization with the Tennessee Secretary of State and pay a $300 minimum filing fee ($50 per member). You must appoint a registered agent with a physical street address in Tennessee. Once formed, your LLC must file an Annual Report by April 1 each year, which also costs a minimum of $300. While Tennessee has zero personal state income tax, it does tax LLCs at the entity level: you must pay a 0.25% Franchise Tax on the LLC's net worth (minimum $100) and a 6.5% Excise Tax on the LLC's net earnings.

Tennessee LLC filing fee

Tennessee uses a sliding scale for LLC filing fees based on the number of members. The fee is $50 per member, but there is a strict minimum fee of $300 (which covers LLCs with 1 to 6 members). The maximum fee is $3,000. You can submit your Articles of Organization online through the Tennessee Secretary of State's business portal, with processing usually taking 1 to 3 business days.

Step 1: Choose a name

Your LLC's name must be perfectly unique and distinguishable from other business entities registered in Tennessee. State law dictates that the name must include an appropriate LLC designator, such as "Limited Liability Company", "LLC", or "L.L.C.". You can search the Tennessee Secretary of State's business entity database to verify name availability.

Step 2: Appoint a registered agent

Every Tennessee LLC must designate a registered agent. This is an individual or authorized business entity responsible for receiving service of process, lawsuits, and official state correspondence on behalf of the LLC. The agent must have a physical street address in Tennessee (P.O. Boxes are not permitted) and must be available during regular business hours.

Step 3: File formation documents

Your business is officially created when you file the Articles of Organization with the Tennessee Secretary of State. You must provide your LLC's name, the name and address of your registered agent, the initial principal office address, and the number of members (which dictates your filing fee). The minimum filing fee is $300.

Step 4: Create an operating agreement

Tennessee law does not require you to file an operating agreement with the state. However, drafting an operating agreement is highly recommended to protect your business legally. It serves as the internal governing document for your LLC, establishing ownership percentages, voting rights, and how profits are divided. Additionally, almost all banks will require a copy of your operating agreement to open a business bank account.

Step 5: Get an EIN

An Employer Identification Number (EIN) is a free 9-digit tax ID assigned by the IRS. It functions like a social security number for your business. You will need an EIN to hire employees, open a business bank account, and file federal tax returns. You can apply for an EIN online directly through the IRS website.

Step 6: Register for state taxes if needed

While Tennessee boasts zero personal state income tax, it heavily taxes the business entity itself. Every Tennessee LLC must register with the Department of Revenue to pay the Franchise and Excise (F&E) Taxes. The Excise Tax is 6.5% of net earnings. The Franchise Tax is 0.25% of the LLC's net worth or tangible property (with the first $500,000 in property currently exempt), and there is a mandatory minimum Franchise Tax of $100 per year even if the LLC operates at a loss. If you sell physical goods, you must also register to collect the state's 7% sales tax plus local additions.

Step 7: File annual reports and stay compliant

Every Tennessee LLC must file an Annual Report to maintain its active status with the Secretary of State. The report is due by April 1 of each year, beginning the calendar year after formation. Just like the formation fee, the annual report fee is $50 per member, with a $300 minimum. Failure to file on time will lead to administrative dissolution.

Tennessee LLC Cost

Fee Type Amount
Formation fee $300 minimum ($50/member)
Registered agent estimate $39 - $150 / year
Annual report fee $300 minimum / year
Franchise Tax minimum $100 / year
Publication fee if applicable $0 (None)
WHEN THIS MAY NOT APPLY

If you do not live in Tennessee, do not operate from Tennessee, and do not have a specific Tennessee-related reason for forming there, a Tennessee LLC may not be the best default choice. You may still need to register the LLC as a foreign LLC in the state where you actually operate, which can create duplicate filing fees, registered agent costs, and annual compliance requirements.

Tennessee currently charges $300 to form a domestic LLC. Annual reports are currently a $300 minimum. For many purely online businesses, it is usually worth comparing your home state with commonly used business-friendly states such as Wyoming, which charges $100 to form an LLC and has a $60 minimum annual license tax, before choosing Tennessee.

Should you form your LLC in Tennessee?

A Tennessee LLC usually makes sense if you live in Tennessee, operate your business from Tennessee, or have a clear legal or tax reason to use Tennessee. If you live and operate somewhere else, forming in Tennessee may create extra registered agent costs, foreign qualification requirements, and duplicate compliance obligations. Tennessee may appeal to some owners, but compare it with Wyoming, Delaware, Nevada, and your home state in our guide to the best state for an online business LLC. For a comprehensive overview of starting a business, visit our LLC formation hub.

Situation Is a Tennessee LLC usually a good fit?
You live in Tennessee Usually yes
Your business operates in Tennessee Usually yes
You want privacy Depends on state rules
You live in another state Usually only if you have a specific reason
You are a non-US resident Depends on banking, taxes, and compliance needs

Tennessee LLC vs Wyoming LLC

For non-resident business owners, Wyoming is a vastly superior option to Tennessee. Wyoming shares Tennessee's benefit of zero personal state income tax, but without the high costs. Wyoming charges a $60 minimum annual report fee (compared to Tennessee's $300 minimum) and has no franchise or excise taxes (saving you Tennessee's 0.25% net worth and 6.5% net earnings taxes). Furthermore, Wyoming offers robust statutory anonymity to keep your ownership details completely private, which Tennessee does not provide. If you operate a brick-and-mortar business inside Tennessee, you must register a Tennessee LLC. If you run a purely online business, Wyoming is a far better choice.