How to form an LLC in Tennessee

Tennessee uses an unusual per-member filing fee model for LLCs: $50 per member, with a minimum of $300 and a maximum of $3,000. So a single-member LLC pays $300 to file Articles of Organization, while a 6-member LLC pays $300, and a 60-member LLC pays $3,000. Online approval through the TN SOS Business Services portal takes 1–3 business days. The annual report uses the same per-member calculation: $300 minimum each year. Despite no personal income tax, Tennessee LLCs face two state-level taxes: the Franchise Tax (0.25% of net worth, $100 minimum) and the Excise Tax (6.5% of net earnings sourced to TN). Tennessee's economy is anchored by healthcare HQs (HCA Healthcare, Community Health Systems, all in Nashville), country music and entertainment (Nashville is the music capital), and a booming auto/EV manufacturing sector (Nissan, Volkswagen, GM, plus Ford's BlueOval City megasite — the largest manufacturing investment in TN history).

Why form your LLC in Tennessee

Healthcare HQs (HCA, Community Health), country music & entertainment (Nashville), and major auto/EV plants (Nissan, VW, GM, Ford BlueOval City). The franchise+excise tax model makes most solo founders consider sole-prop instead.

• No personal income tax on wages
• Healthcare HQ capital — HCA, Community Health Systems
• Nashville is the music and entertainment capital of the U.S.
• Major auto/EV manufacturing — Nissan, VW, GM, Ford BlueOval City
• Strong logistics presence (FedEx World HQ in Memphis)
• No state inheritance or estate tax

Best fit for: Healthcare HQs (Nashville) · Music & entertainment · Automotive & EV

How to form a Tennessee LLC in 7 steps

1. 1

   Search the Tennessee business name database

   Use the TN SOS Business Services portal to search names. The name must include "Limited Liability Company", "L.L.C.", or "LLC". Reserve a name for $20 (held 4 months) if needed.

2. 2

   Appoint a Tennessee registered agent

   Required to have a physical Tennessee street address. Can be the LLC owner if they're a TN resident, or a commercial registered agent service.

3. 3

   File Articles of Organization

   File online through TN SOS Business Services for $50 per member ($300 minimum, $3,000 maximum). Standard processing is 1–3 business days. The Articles include LLC name, registered agent, principal office, and member count (which determines fee).

4. 4

   Draft an Operating Agreement

   Not required by TN law but strongly recommended. Defines membership interests, voting, profit/loss splits, and dissolution. Banks routinely ask for it.

5. 5

   Apply for an EIN with the IRS

   Free at irs.gov, takes 10 minutes online. Required for opening a business bank account, registering with the Tennessee Department of Revenue, and filing federal taxes.

6. 6

   Register with the Tennessee Department of Revenue (TNDOR)

   Register through Tennessee Taxpayer Access Point (TNTAP) for the Franchise & Excise Tax (mandatory for most LLCs), sales and use tax (if you sell taxable goods/services), and any industry-specific accounts.

7. 7

   Calendar the annual report and F&E tax

   TN LLC annual reports are due by the 1st day of the 4th month after the LLC's fiscal year end (April 1 for calendar-year LLCs). The fee is $50 per member ($300 minimum, $3,000 maximum). The Franchise & Excise tax return is also due on the same date.

File directly with Tennessee Secretary of State →

Tennessee LLC taxes & compliance

Tennessee has no personal income tax — but LLCs pay both a franchise tax (0.25% of net worth) AND an excise tax (6.5% of net earnings). Plus the per-member filing fee model.

Ongoing compliance checklist

• Annual report — $50 per member, $300 minimum, due 1st day of 4th month after fiscal year end
• Franchise Tax — 0.25% of net worth, $100 minimum
• Excise Tax — 6.5% of TN-source net earnings
• Sales and use tax filings (TNDOR)
• Withholding tax filings if you have TN employees
• Federal income tax (Form 1065 multi-member, Schedule C SMLLC)

Registered agent rules

Required — TN street address.

Hidden costs new Tennessee LLC owners forget

• $50 per member filing fee — $300 minimum, $3,000 maximum
• Annual report uses same per-member calculation — $300+ every year
• Franchise Tax: 0.25% of net worth ($100 minimum)
• Excise Tax: 6.5% of TN-source net earnings
• Combined sales tax averages 9.55% — one of the highest in the U.S.
• Foreign LLC qualification: $50 per member ($300 min, $3,000 max)

Should you use a formation service in Tennessee?

You can absolutely file directly with the Tennessee Secretary of State for the $300 state fee. The reasons most Tennessee owners use a service anyway are (1) registered-agent privacy — keeping their home address off public filings — and (2) calendar reminders for ongoing compliance.