How to Form an LLC in Tennessee

This is the complete guide to forming a limited liability company in Tennessee under the Tennessee Revised LLC Act . We cover every step from name search to filing Form SS-4270 with the Tennessee Secretary of State. The filing fee is $300 per member (minimum $300) and standard processing takes 5-7 business days.

Table of Contents

1. Overview — Why Form an LLC in Tennessee
2. Choose a Name
3. Appoint a Registered Agent
4. File Your Articles of Organization
5. Create an Operating Agreement
6. Get Your EIN
7. Costs
8. After You File
9. FAQ

Overview — Why Form an LLC in Tennessee

Tennessee's unique tax structure makes it attractive for specific business situations:

• Zero personal income tax — No state income tax on wages, business income, or investment income (Hall Tax fully repealed 2021). LLC pass-through income is NOT taxed at the individual level.
• Franchise & Excise Tax — The trade-off: Tennessee imposes an entity-level tax (6.5% excise on net income + 0.25% franchise on net worth/tangible property). Minimum $300.
• No Series LLC — Tennessee does not authorize series entities
• TNBEAR portal — Online filing system for Annual Reports
• Strong LLC act — Tennessee Revised LLC Act (2006) provides modern, flexible provisions
• Healthcare hub — Nashville's healthcare industry (HCA, Community Health Systems, Envision) drives significant formation volume

Tennessee is particularly advantageous for high-earning LLC owners who benefit more from zero income tax than they lose from the franchise & excise tax. The breakeven depends on your specific income and net worth.

For entity comparisons, see LLC vs Corporation and LLC vs Sole Proprietorship.

Choose a Name

Under the Tennessee Revised LLC Act:

• Must contain "Limited Liability Company," "LLC," or "L.L.C."
• Must be distinguishable from existing entities on the Tennessee SOS records
• Cannot include restricted words without proper licensing
• Cannot imply a different entity type

Search the Tennessee business database at tnbear.tn.gov/ecommerce for availability. Reserve your name for 4 months ($20) if you need time before filing.

Appoint a Registered Agent

Tennessee requires a registered agent under the Tennessee Revised LLC Act:

• Must have a street address in Tennessee (no PO boxes)
• If individual: must be a Tennessee resident
• If entity: must be authorized to do business in Tennessee
• Tennessee allows the LLC to serve as its own registered agent (unlike many states) — IF it maintains a registered office address

File Your Articles of Organization

File Form SS-4270 (Articles of Organization) with the Tennessee Secretary of State. Fee: $300 per member (minimum $300).

Required information:

• LLC name
• Registered agent name and Tennessee street address
• Management type (member-managed or manager-managed)
• Principal office address
• Name and address of at least one organizer or initial member/manager
• Duration (perpetual or specified)
• Number of members (determines filing fee: $300 per member)

File online at sos.tn.gov or by mail. See online filing guide or detailed steps.

Create an Operating Agreement

Tennessee does not require an operating agreement to be filed, but the Tennessee Revised LLC Act gives broad authority to operating agreements to govern LLC operations. Without one, statutory defaults apply.

An operating agreement is critical for member relationships, especially given Tennessee's franchise & excise tax implications for profit allocation.

Get Your EIN

Apply for an EIN at irs.gov (free, instant online). Needed for banking, Tennessee DOR registration, and hiring employees.

Costs

Complete cost breakdown:

Total minimum year 1 (single-member): $300 (formation) + $300 (F&E tax minimum) + $300 (annual report) = $900

Timeline

Formation timeline:

• Online filing: 5-7 business days
• Mail filing: 2-4 weeks
• Expedited (24-hour): Available for additional fee

After You File

Post-formation tasks:

• Annual Report — $300 minimum, due April 1 every year via TNBEAR (details)
• Franchise & Excise Tax — Register with Tennessee DOR; file annually. $300 minimum.
• Business bank account — Open immediately
• Business licenses — Nashville, Memphis, Knoxville have specific requirements
• Tax obligations — Understand the F&E tax structure

Helpful Guides

• Do I need an LLC? — Tennessee-specific analysis considering the F&E tax
• LLC for married couples — Tennessee is a separate property state (not community property)
• Convert sole proprietorship to LLC
• LLC vs DBA — Tennessee assumed name vs. LLC
• LLC asset protection

FAQ

How much does it cost to form a Tennessee LLC?

$300 per member (minimum $300 for single-member). A 3-member LLC costs $900 to form. Plus ongoing: $300/year Annual Report + $300 minimum franchise & excise tax. Tennessee is among the more expensive states for LLC formation and maintenance.

Why is Tennessee so expensive?

Tennessee offsets zero personal income tax with higher entity-level fees and the franchise & excise tax. The state collects revenue from businesses at the entity level rather than from individuals on personal income.

Do I need a registered agent?

Yes. Must have a Tennessee street address. Tennessee uniquely allows the LLC itself to serve as its own registered agent (with a registered office address) — unusual among states.

Can I form a Tennessee LLC if I don't live here?

Yes. Non-residents can form. You need a Tennessee registered agent. See our non-resident guide.

What's the franchise & excise tax?

Tennessee's entity-level tax: 6.5% excise tax on net income PLUS 0.25% franchise tax on the greater of net worth or tangible property/real property in Tennessee. Minimum combined: $300. This is NOT a personal income tax — it's assessed on the LLC entity itself.

Does Tennessee have a state income tax?

No individual income tax. Zero tax on wages, business pass-through income, or investment income. The Hall Tax (on interest and dividends) was fully repealed effective 2021. The franchise & excise tax is an entity-level tax, not a personal income tax.

What are the ongoing annual costs?

Minimum $600/year: $300 Annual Report (due April 1) + $300 minimum F&E tax. If your LLC is profitable or has significant assets, the F&E tax will exceed the $300 minimum.