Starting a Tennessee LLC is straightforward. You file paperwork with the Tennessee Secretary of State, pay the $300 filing fee, and wait for approval. No lawyer required.

This guide walks you through the entire process step-by-step, including costs, timelines, required forms, and common mistakes to avoid.

💡 Did You Know? Tennessee has relatively high LLC filing fees ($300 per member, $300 minimum).

⏱️ Time Investment: 1-2 hours to complete paperwork. 3-5 days for state processing.

Step-by-Step Guide to Forming a Tennessee LLC

Choose Your LLC Name

Your Tennessee LLC name must:
- Include "Limited Liability Company," "LLC or L.L.C."
- Be distinguishable from existing Tennessee businesses
- Not contain restricted words (bank, insurance, corporation) without approval
Check name availability: Tennessee Secretary of State Business Search

⚠️ Common Mistake: Don't skip the name search. If your name is too similar to an existing business, your filing will be rejected and you'll lose the $300 fee.
Appoint a Registered Agent

Tennessee requires every LLC to have a registered agent—a person or company authorized to receive legal documents on behalf of your business.

Requirements:
- Must have a physical Tennessee address (no P.O. boxes)
- Must be available during normal business hours
- Can be yourself, a partner, or a professional service
Cost: $0 if you act as your own agent. Professional services cost $100-300/year.
File Articles of Organization

This is the official document that creates your LLC. You'll submit it to the Tennessee Secretary of State.

Required information:
- LLC name
- Purpose of business (can be general)
- Registered agent name and address
- Management structure (member-managed or manager-managed)
- Principal office address
How to file:
- Online: Tennessee Secretary of State Online Filing (fastest)
- Mail: Download and mail completed form (slower)
Filing Fee: $300 (non-refundable)
Visit Tennessee Secretary of State
Create an Operating Agreement

While not always legally required, an Operating Agreement is highly recommended. It defines ownership percentages, profit distribution, management structure, and procedures for adding/removing members.

Why you need it:
- Protects your limited liability status
- Prevents disputes between members
- Required by most banks to open a business account
💡 Pro Tip: Even if you're a single-member LLC, create an Operating Agreement. It strengthens the legal separation between you and your business.
Get an EIN (Employer Identification Number)

An EIN is like a Social Security number for your business. You need it to open a bank account, hire employees, and file taxes.

How to get it: Apply free online at the IRS website. Takes 10 minutes, receive immediately.

Cost: $0 (free from the IRS)

⚠️ Scam Alert: Third-party services charge $50-200 for EIN applications. Don't pay. The IRS does this for free.
File Your Annual Report

Tennessee requires LLCs to file an annual report with the Tennessee Secretary of State.

Cost: $300/year minimum

Due: Check with the Tennessee Secretary of State for your specific due date, typically based on your formation date.

⚠️ Don't Miss It: Failing to file your annual report can lead to administrative dissolution of your LLC.
Understand Tennessee Franchise/Business Tax

Tennessee imposes a franchise tax (0.25% of net worth, minimum $100) and excise tax (6.5% of net income).

💡 Note: Tennessee has no state income tax on wages. However, LLCs are subject to the Franchise and Excise Tax.

Complete Cost Breakdown

Item	Cost	When Due
Articles of Organization	$300	At filing
EIN (Federal Tax ID)	$0	Anytime
Registered Agent (if using service)	$100-300	Annual
Annual Report	$300 minimum	Annually
Franchise/Business Tax	Varies	Annually
TOTAL (First Year, DIY)	$300	—

Note: Optional costs like registered agent services ($100-300/year) and business licenses (varies by city/industry) are not included in the minimum total.

Timeline: How Long Does It Take?

Step	Time Required
Choose name and check availability	15 minutes
Complete Articles of Organization	20-30 minutes
State processing	3-5 days
Create Operating Agreement	1-2 hours
Get EIN from IRS	10 minutes (instant online)
TOTAL	3-5 days (plus paperwork time)

Common Mistakes to Avoid

1. Skipping the Operating Agreement

Banks often won't open business accounts without one. Plus, it protects you in disputes and strengthens your liability protection.

2. Not Separating Personal and Business Finances

Open a dedicated business bank account immediately. Mixing personal and business funds can "pierce the corporate veil" and eliminate your liability protection.

3. Forgetting Ongoing Compliance

Tennessee requires annual filings. Missing these deadlines can result in penalties or dissolution of your LLC.

4. Using Your Home Address as Registered Agent

Your registered agent address is public record. If you value privacy, consider using a professional registered agent service or a business address.

5. Paying Third-Party "EIN Services"

Scammers charge $50-200 to file for your EIN. The IRS does this for free at irs.gov. Never pay for an EIN.

Tennessee LLC Tax Information

Tennessee has no state income tax on wages. However, LLCs are subject to the Franchise and Excise Tax.

Federal taxes: By default, LLCs are "pass-through" entities—profits pass through to your personal tax return. Single-member LLCs are taxed as sole proprietorships. Multi-member LLCs are taxed as partnerships. You can also elect S-corp or C-corp taxation if beneficial.

💡 Tax Tip: Consider consulting a CPA familiar with Tennessee tax law. The right tax structure (default, S-corp, or C-corp election) can save you thousands annually.

Do You Need a Lawyer?

Short answer: No.

Forming a Tennessee LLC is simple enough to do yourself. The forms are straightforward, and the Tennessee Secretary of State website has instructions.

When you might want a lawyer:

Complex ownership structures (multiple members with different equity stakes)
High-risk industries (healthcare, finance, construction)
Significant startup capital or investor involvement
You want custom Operating Agreement provisions

Typical lawyer cost: $500-1,500 for LLC formation services.

Tennessee LLC Checklist

Choose LLC name and verify availability
Appoint a registered agent with a physical Tennessee address
File Articles of Organization with $300 fee
Create an Operating Agreement
Apply for EIN with the IRS (free)
Open a business bank account
Set calendar reminder for annual report
Obtain any required business licenses for your city/industry
Set up accounting to separate business and personal finances

Frequently Asked Questions

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

Yes. You can form a Tennessee LLC from any state or country. However, you'll need a registered agent with a physical Tennessee address.

How much does it cost to start an LLC in Tennessee?

The state filing fee is $300. Add $0 for your EIN (free from IRS). If you use a professional registered agent, add $100-300/year. Total minimum DIY cost: $300.

How long does it take to form an LLC in Tennessee?

State processing typically takes 3-5 days. The paperwork itself takes 1-2 hours to complete.

What's the difference between member-managed and manager-managed?

Member-managed: All LLC owners (members) make day-to-day decisions. Most common for small businesses.

Manager-managed: Members appoint one or more managers to run the business. Used when some members are passive investors.

Do I need a business license in Tennessee?

It depends on your city and industry. After forming your LLC, check with your local clerk's office for required permits or licenses. Professional services may need state-level licensing.

Can I convert my sole proprietorship to an LLC?

Yes. Form a new LLC and transfer your business assets. Update your licenses, permits, contracts, and bank accounts with your new LLC name.

How is a Tennessee LLC taxed?

Tennessee has no state income tax on wages. However, LLCs are subject to the Franchise and Excise Tax. At the federal level, LLCs are pass-through entities by default. You can elect S-corp or C-corp taxation if it's more beneficial.

What happens if I don't maintain my LLC?

Failing to file your annual report or maintain a registered agent can lead to penalties, late fees, and eventually administrative dissolution of your LLC.

Why Choose Tennessee for Your LLC?

✓ Tennessee LLC Advantages:

Filing fee: $300
Processing time: 3-5 days
Ongoing costs: $300/year minimum
No state income tax

Other State LLC Guides

Comparing states? Check out our other popular LLC guides:

Additional Resources

🎉 Ready to Start? You now have everything you need to form your Tennessee LLC. The process is straightforward—just follow the steps above and you'll be up and running in 3-5 days.

Last updated: February 27, 2026
Information verified with Tennessee Secretary of State and IRS guidelines. Contact the Tennessee Secretary of State at (615) 741-2286 for the most current information.