Tennessee Business Guide
How to Start a Business in Tennessee
Everything you need to form your Tennessee LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Tennessee has no personal income tax, making it favorable for business owners. LLCs can be formed for a $300 filing fee, with flat state business taxes of 6.5% excise tax and 0.25% franchise tax on net worth.
This guide covers every step of starting an LLC in Tennessee, from formation through annual compliance and licensing.
Choosing Your Tennessee Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Tennessee small businesses.
| Entity Type | Liability Protection | Taxation | Tennessee Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $300 | $300 Annual Report | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $100 | $20 Annual Report | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Tennessee Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Tennessee Secretary of State database. Reserve for $20 (four months (120 days)).
- 3
Appoint a registered agent
Must have a physical Tennessee street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Articles of Organization Limited Liability Company (Form SS-4270) ($300) or Charter For-Profit Corporation (Form SS-4417) ($100) with the Tennessee Secretary of State.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Tennessee Department of Revenue. State sales tax rate: 7%.
- 7
Get required licenses and permits
Tennessee issues no single statewide business license.
- 8
Register for Tennessee taxes
Personal income tax: none.
How Much Does It Cost to Start a Business in Tennessee?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Tennessee Secretary of State) Required | $300 | n/a |
| Corporation filing fee Required | $100 | If forming a corporation instead |
| Annual Report Required | $300 | On or before the first day of the fourth month following the close of the LLC fiscal year (April 1 for a calendar-year... |
| Name reservation | $20 | four months (120 days) |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Tennessee issues no single statewide business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $300 to $900 |
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Tennessee Business Guides
- How to Start an LLC in Tennessee
- How to Start a Corporation in Tennessee
- Sole Proprietorship in Tennessee: How to Start One
- Tennessee Business License: What You Need and How to Get It
- Tennessee Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Tennessee
- Tennessee Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Tennessee
- Tennessee Registered Agent: Requirements and How to Choose One
- Best LLC Services in Tennessee
- Tennessee Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Tennessee
Why Start a Business in Tennessee?
- Tennessee has no personal income tax: the Hall income tax on interest and dividends was repealed for tax periods beginning January 1, 2021.
- State GDP ran about $610.2 billion at an annual rate in the first quarter of 2026, the 16th largest of the 50 states.
- Population reached 7,315,076 as of July 1, 2025, with Nashville the largest city at 721,074 residents.
- A for-profit corporation charter costs $100 to file, while LLC Articles of Organization cost $50 per member with a $300 minimum and a $3,000 maximum.
- Business taxes are flat: 6.5% excise tax on Tennessee taxable income and 0.25% franchise tax on Tennessee net worth, with a $100 minimum franchise tax.
- The state sales tax rate is 7%, and a local business license costs a $15 registration fee paid to the county or municipal clerk.
Tennessee Business Resources
Tennessee Secretary of StateEntity filing, name search, online filingsos.tn.gov →Tennessee Department of RevenueSales tax permits, business tax registrationwww.tn.gov →Tennessee Small Business Development Center (TSBDC)Free business counseling and trainingwww.tsbdc.org →SBA Tennessee District OfficeFederal loans, programs, and mentoringwww.sba.gov →
Frequently Asked Questions
- How long does it take to form an LLC in Tennessee?
- You can file Articles of Organization with the Tennessee Secretary of State through TNCaB using e-file, mail, or walk-in service in Nashville. The $300 filing fee is required.
- What does it cost to start an LLC in Tennessee in the first year?
- The Articles of Organization filing fee is $300. An annual report due by April 1 costs $300. A business license registration fee of $15 must be paid to your county or municipal clerk. Total first-year costs are $615.
- Can a non-resident form an LLC in Tennessee?
- Tennessee allows business formation through online filing via TNCaB as well as mail and in-person options, making it accessible for non-residents to file their Articles of Organization.
- What's the cheapest way to start a business in Tennessee?
- A for-profit corporation is the cheapest option to start, with a $100 filing fee and a $20 annual report fee. An LLC costs $300 to file plus a $300 annual report.
- Is an operating agreement required for a Tennessee LLC?
- Tennessee requires filing Articles of Organization to form an LLC for a $300 fee. Operating agreement requirements are not specified in the standard state formation information.