How to Form an LLC in Tennessee (2026)

1. 1Choose a name for your LLC and verify availability by searching the Tennessee Secretary of State (TNBEAR) database. Your name must include "Limited Liability Company," "LLC," or "L.L.C."
2. 2Appoint a registered agent with a physical street address in Tennessee.
3. 3File Articles of Organization with the Tennessee Secretary of State. The filing fee is $300 minimum ($100 per member, minimum 3). Online filing is available through TNBEAR.
4. 4Obtain an EIN (Employer Identification Number) from the IRS at no cost.
5. 5Create an operating agreement. Not legally required in Tennessee but strongly recommended.
6. 6Open a business bank account with your Articles of Organization, EIN, and operating agreement.
7. 7Obtain any required state and local business licenses or permits.
8. 8File your first annual report on the anniversary of formation. The fee is $300.

• ✓Obtain an EIN from the IRS (free, apply online at irs.gov)
• ✓Open a dedicated business bank account
• ✓Register for Tennessee state taxes with the Department of Revenue
• ✓Get business insurance (general liability at minimum)
• ✓Set up an accounting system to track income and expenses
• ✓Apply for any local business licenses or permits
• ✓File your first annual report ($300) on the anniversary of formation
• ✓Register for franchise and excise tax with the Tennessee Department of Revenue

Your Tennessee LLC name must contain "Limited Liability Company," "LLC," or "L.L.C." Restricted words like "Bank," "Insurance," or "Trust" require additional licensing. The name must be distinguishable from existing business entities in Tennessee.

Tennessee has no state income tax on earned income. However, Tennessee imposes a franchise tax (0.25% of net worth or tangible property, minimum $100) and an excise tax (6.5% of net income) on LLCs. The $300 annual report and these entity-level taxes make Tennessee one of the most expensive states for ongoing LLC costs despite having no personal income tax.

LLC vs. other structures in Tennessee

Tennessee has one of the highest filing fees at $300 minimum ($100 per member), plus a $300 annual report. Combined with the franchise tax (0.25% of net worth) and excise tax (6.5% of net income), Tennessee is expensive for LLCs despite having no personal income tax. For single-member LLCs with few assets, the minimum franchise tax is $100. Consider whether the no-income-tax advantage offsets these entity-level taxes.

• •File an annual report on the anniversary of formation — $300 fee
• •Pay franchise tax (0.25% of net worth, minimum $100) to the Department of Revenue
• •Pay excise tax (6.5% of net income) to the Department of Revenue
• •Maintain a registered agent with a physical address in Tennessee at all times
• •Keep your operating agreement current and update it when membership changes
• •File federal tax returns (no state personal income tax returns required)

Tennessee imposes additional taxes beyond the filing fee that you should factor into your decision. Make sure the total annual cost — including the franchise tax — fits your business budget before committing.

In general, you should form your LLC in the state where you physically live and conduct business. Forming in a "tax-friendly" state like Wyoming, Delaware, or Nevada sounds appealing, but if you operate in Tennessee, you will still need to register as a foreign LLC there — paying fees in both states.

An LLC is almost always a better choice than operating as a sole proprietorship because of the personal liability protection it provides. However, if your LLC is highly profitable, you should talk to a CPA about electing S-Corp tax treatment to potentially reduce your self-employment tax burden.

What Tennessee LLC Owners Need to Know

• •Tennessee has one of the highest filing fees at $300 minimum ($100 per member)
• •Annual report is also $300, making ongoing costs among the highest in the country
• •Tennessee has no state income tax on earned income
• •Tennessee also charges a franchise tax (0.25% of net worth, minimum $100)
• •First-year total can easily exceed $600

Official Tennessee Resources

• Tennessee Secretary of State — Business Services
• Tennessee Business Filing (TNBEAR)