Forming a Tennessee LLC

Tennessee's LLC formation fee is $300 (flat, as of July 2025). Annual reports cost another $300/year. The state does not tax personal wages, but businesses face franchise and excise taxes. Here is the complete picture.

Why Tennessee?

Tennessee does not impose state income tax on wages or earned income. For LLC owners taking distributions, that is a significant advantage. The business-level taxes (franchise + excise) exist, but the personal income tax savings often outweigh them — especially for higher earners.

The state also has a large, diverse economy. Nashville, Memphis, Knoxville, and Chattanooga each offer different industry strengths. No shortage of customers, talent, or opportunity.

Cost Reality Check

Tennessee is not cheap to form or maintain an LLC. But the absence of personal income tax can make the math work favorably depending on your revenue and structure.

Formation Steps

1. Choose Your LLC Name

Include "Limited Liability Company," "LLC," or "L.L.C." in the name. Must be distinguishable from existing entities in the Secretary of State's database. Search at sos.tn.gov before committing.

2. Appoint a Registered Agent

Required before you can file. Must have a Tennessee physical address (no PO boxes) and be available Mon-Fri 9 AM to 5 PM. Tennessee allows the entity itself to serve, but most owners use a professional service for privacy.

We do this for $99/year. List our address on your formation documents and your personal address stays off the public record entirely.

3. File Articles of Organization

Submit to the Tennessee Secretary of State with the $300 fee. Required information:

• LLC name
• Principal address
• Registered agent name and address
• Management structure (member-managed or manager-managed)
• Organizer details

File online at sos.tn.gov. Standard processing: 5-10 business days. Expedited ($100): typically 24 hours.

4. Create Your Operating Agreement

Not filed with Tennessee, but essential. Defines ownership splits, profit distribution, voting, and exit procedures. Banks require it for business accounts. Courts look to it in disputes. Without one, Tennessee default rules apply — which may not match your intentions.

5. Obtain an EIN

Free at IRS.gov. Takes ten minutes. Required for bank accounts, hiring, and federal tax filing.

6. Maintain Compliance

After formation, you must:

• Maintain a registered agent with a Tennessee address at all times
• File the annual report every year ($300)
• Pay franchise tax (minimum $100) and excise tax (6.5% net earnings)
• Keep business finances separate from personal accounts

Miss any of these and the Secretary of State can dissolve your LLC.

The Registered Agent Obligation

Every Tennessee LLC needs an agent from day one. The agent must:

• Have a physical Tennessee street address
• Be available during business hours for document delivery
• Forward service of process and state correspondence to you

For $99/year, we cover all of it. Same-day scanning, compliance reminders, portal access, and privacy protection. Your formation documents list our address — not yours.

Questions

How much is a Tennessee LLC? $300 to form, $300/year to maintain (annual report).

Is there state income tax? Not on wages. Businesses pay franchise tax and excise tax.

Formation timeline? 5-10 business days standard. 24 hours expedited ($100).

Can I form from out of state? Yes. You need a Tennessee registered agent — we provide that for $99/year.

What changed in 2025? Formation and annual report fees both became flat $300 regardless of member count (previously $50/member with $300 min).