Best LLC Formation Services in Tennessee

Tennessee is one of only nine states with no personal income tax, which makes it attractive for pass-through LLC income. But unlike Texas or Wyoming, Tennessee layers on both a franchise tax and an excise tax that apply directly to LLCs.

The franchise tax (0.25% of net worth, minimum $100) and excise tax (6.5% of net earnings) hit every LLC regardless of size. Neighboring Georgia and Alabama charge lower annual fees with no equivalent franchise tax on small LLCs, so Tennessee's "no income tax" label requires context.

Tennessee is one of the few states that allows Series LLCs, letting you create separate liability-protected series under a single parent entity. This is useful for real estate investors holding multiple properties.

After formation, you must file a copy of your Articles of Organization with the county Register of Deeds where your principal office is located. The recording fee ranges from $5 to $20 depending on the county.

1. File with the county Register of Deeds. Tennessee requires you to record a copy of your Articles of Organization with the county clerk where your LLC's principal office is located. The fee is $5 to $20 depending on the county, and this should be done at the time of filing.
2. Get a business tax license. Most Tennessee businesses must register with the Department of Revenue. If your gross receipts are between $3,000 and $100,000, you need a minimal activity license. Over $100,000 requires a standard business license. The initial registration fee is $15, paid to your local county or municipal clerk.
3. Apply for an EIN. You need a federal Employer Identification Number to open a business bank account, hire employees, or file taxes. This is free from the IRS and can be done online in minutes.
4. Draft an operating agreement. Tennessee does not legally require one, but banks will ask for it when you open a business account, and it protects your limited liability status in court.
5. File your annual report by the deadline. Tennessee annual reports are due on or before the first day of the fourth month after your fiscal year ends. The fee is $300 per year. If you miss it, the Secretary of State can begin administrative dissolution after a two-month grace period.
6. File the franchise and excise tax return. Every Tennessee LLC must file a combined franchise and excise tax return. The franchise tax minimum is $100, and the excise tax is 6.5% of net earnings. These are due alongside your federal return.

• $300 Annual Report Fee - This is one of the highest annual report fees in the country, due by the first day of the fourth month after your fiscal year ends.
• Franchise Tax Minimum of $100 - Even if your LLC has zero revenue, you owe at least $100 in franchise tax every year.
• Excise Tax of 6.5% - This applies to net earnings and is separate from both the franchise tax and the annual report fee.
• County Recording Fee of $5 to $20 - You must file a copy of your Articles of Organization with the county Register of Deeds, and the fee varies by county.
• Business License Fee of $15 - Most businesses must register with the Department of Revenue and pay a $15 registration fee to the local clerk.