How to Form an LLC in Tennessee

Tennessee LLC landscape

Run your business in Tennessee? Form locally, because foreign LLCs still owe the same annual report and franchise & excise (F&E) tax but add another filing layer. The key is budgeting for the $50-per-member fee, knowing when the director-managed option is useful, and timing filings with county recording requirements.

Need the corporate version? Jump to the Tennessee corporation guide for charter-specific strategy.

Pre-formation checklist

Entity choiceValidate LLC vs PLLC vs Tennessee corporation based on licensing, number of owners, and desire for stock options.

Name clearanceSearch SoS & county records; reserve for four months ($20) if banks/vendors expect filings later.

Registered agentPick a Tennessee resident or service; secure written consent and confirm they can handle county mailings.

Ownership modelOutline capital contributions, director-managed boards (if needed), vesting, and buy-sell expectations before filing.

Tax postureDecide default vs S-election vs corporate election; map F&E payment responsibilities and SALT projection.

Local licencesFlag county/city business tax, BPOL equivalents, zoning, and profession-specific boards (contractors, medical, legal).

When a Tennessee LLC shines

Director-managed structure mimics a corporate board for investor oversight without forming a corporation.
Real estate holding companies that need Tennessee venue clauses and compliance with local lenders.
Professional practices where PLLC is accepted by the licensing board.
Pass-through tax planning when paired with S-election and payroll strategies.

Watch the cost curve

10 owners? Expect $500 per year in annual report fees, regardless of revenue.
County register-of-deeds filings add recording fees for every amendment, merger, or dissolution.
F&E tax applies even if profits are zero—minimum $100 franchise tax still due.
Foreign investors must consider ITINs and FIRPTA if holding real estate.

Formation workflow & first 90 days

SS-4270 asks simple questions, but Tennessee expects you to file copies with both the Secretary of State and the county register. Use this roadmap to stay ahead of the paperwork.

Steps to file SS-4270

1. Name & reservationConfirm distinguishability, include “LLC/L.L.C.”, and reserve if financiers require proof before filing. Reservation lasts four months.

2. Registered agentPick a Tennessee resident or commercial RA with a street address. The Articles list the registered office county and zip; the agent must consent.

3. Draft SS-4270Select member-, manager-, or director-managed structure. Include principal office address, number of members (for fee), effective date (up to 90 days out), and whether the LLC will do business in Tennessee.

4. File & recordSubmit online or mail to Business Services (Snodgrass Tower, Nashville). Pay $50 per member (min $300/max $3,000). File a copy with the county register of deeds for the principal executive office.

5. Operating agreementFinalize OA before money moves: capital accounts, distributions, director powers, F&E responsibility, and transfer restrictions should be signed off.

6. Tax & licensingGet EIN, register for franchise & excise, sales/use, employer withholding, unemployment, and local business tax. Certain filings (e.g., contractors) need proof of F&E registration.

First 90-day implementation

Organizational meetingAdopt OA, admit members, issue interests, appoint directors/managers, approve banking and IP assignments.

Banking & accountingOpen accounts, connect bookkeeping, and set up ledgers for F&E property schedules and member capital tracking.

Licenses & filingsSecure county business tax licenses, building permits, or professional licenses. Remember some counties require personal appearance.

Payroll & insuranceEnroll with payroll provider, obtain workers’ comp/unemployment accounts, and confirm general liability/professional coverage reflects LLC ownership.

Compliance calendarCalendar April 1 annual report, quarterly F&E estimates, registered agent renewals, and CTA monitoring—even though domestic LLCs are exempt right now.

Articles fields & fee reminders

Field	Details I watch	Practice tip
Management	Director-managed is unique to Tennessee; specify how many directors initially serve.	Clarify in OA whether directors owe fiduciary duties similar to corporate boards.
Members count	Needed if more than six; determines formation fee.	Update ledger immediately—SoS will audit if fees don’t match reality.
Restriction on TN business	Check only if the LLC is a holding company barred from operating here.	Triggers flat $300 annual report; do this for out-of-state real estate funds.
County recording	All formation/amendment/merger/termination filings go to the county register.	Maintain stamped copies for lenders and due diligence.

Operating agreement architecture

Title 48 gives you freedom of contract—take advantage. I categorize OA clauses by governance, economics, regulatory overlays, and exit planning.

Governance choices

Topic	Default	Attorney add-ons
Management	Member-managed.	Manager- or director-managed boards with supermajority vetoes on debt, mergers, equity admissions.
Meetings	Not required.	Formal meeting cadence + written consent process to satisfy lenders.
Authority	Members can bind LLC.	Statement of authority/refutation plus OA limits on capital calls and guarantees.

Economic & exit planning

Capital accounts and targeted allocations (important for director-managed structures with investors).
Distribution waterfalls and preferred returns if investors join later.
Buy-sell triggers for death, disability, default, or license loss with valuation mechanics.
Drag/tag, ROFR/ROFO, and admission procedures tied to Tennessee consent requirements.

Regulated professions & foreign owners

PLLCs follow board-specific rules (law, medical, engineering). Some boards cap non-licensed ownership or require certificates of authorization. Foreign owners need ITINs and may trigger FIRPTA on real estate exits; embed withholding instructions so the responsible member can remit taxes and F&E minimums.

Director-managed nuance

Director-managed LLCs look like corporations, but lenders still want clarity on who can execute loans. I add signature blocks and officer appointments inside the OA so counterparties see authority without digging through minutes.

Taxes, annual reports & lifecycle filings

The Tennessee LLC “tax surprise” is franchise & excise. Even disregarded entities owe it unless they qualify for a farming or family-owned non-corporate entity (FONCE) exemption. Pair that with the steep annual report fee and you appreciate why planning matters.

Franchise & excise

Excise: 6.5% of net earnings from Tennessee.
Franchise: 0.25% of the greater of net worth or TN-sited property; $100 minimum.
Returns due 15th day of 4th month after fiscal year end; penalties are 5%/month (filing) and 0.5%/month (payment), capped at 25% each.
Exemptions: FONCE, farming (≥66 2/3% receipts), and personal-residence holding LLCs with approved filings.

Annual report

Due the first day of the 4th month after year-end (April 1 for calendar filers). Fee = $50 per member (min $300/max $3,000) or flat $300 if Articles bar TN business. Add $20 if you change the registered agent through the report.

Lifecycle filings

Registered agent change (SS-4527): $20.
Articles amendment/restatement: $20 plus county recording.
Merger/conversion: usually $100 + county fee; conversions allow LLC ↔ corporation.
Dissolution/termination: $20 plus final F&E, sales, payroll filings.

Cost snapshot

Task	Cost	Notes
Formation (5 members)	$250	$50 × members, but minimum $300 applies → expect $300.
Annual report	$250+	Same formula; plan for $50/member each year.
County recording	$10–$40	Varies by county per document.
F&E minimum	$100	Even pre-revenue entities owe this.

Law-office reminder: Missing the annual report automatically blocks you from changing the registered agent or filing amendments. Always cure forfeitures before new filings—SoS rejects everything else until you are current.

CTA status, foreign qualification & pitfalls

Domestic Tennessee LLCs are currently outside the Corporate Transparency Act (CTA), but foreign-formed companies registering here still have BOI duties. Combine that with the state’s recordation quirks and you have plenty of traps.

CTA / BOI

FinCEN’s March 2025 interim rule excludes domestic entities from BOI filing. I still track ownership changes in case the rule flips again. Foreign LLCs registering in Tennessee are “foreign reporting companies” and must file within 30 days unless they meet an exemption.

Foreign qualification checklist

If you’re a Delaware or out-of-country LLC doing business in Tennessee, file the Application for Certificate of Authority, pay $50/member, appoint a Tennessee RA, and provide a certificate of existence dated within 60 days. You owe annual reports and F&E on Tennessee activity.

Docs I gather

Certificate of existence / good standing.
Signed registered agent appointment.
Operating agreement excerpts for authority.
County personal property account numbers if property is sited in multiple counties.

Common pitfalls I keep seeing: (1) Forgetting the county register filing, which later stalls real estate closings. (2) Letting the registered agent resign—SoS will administratively dissolve quickly. (3) Ignoring F&E because you “made no money” and then facing liens. (4) Miscounting members on the annual report; SoS can retroactively bill the difference.

My services for Tennessee LLC owners

I personally handle every Tennessee engagement—no anonymous filing mill. Expect direct access, practical drafting, and coordinated tax planning with your CPA.

Popular

Formation & OA package

$1,150 flat

SS-4270 drafting, filing, and county recording coordination.
Custom operating agreement (member/manager/director-managed) with F&E clauses.
Organizational meeting minutes, ownership ledger, EIN/TN tax registration checklist.

Compliance & F&E planning

$1,650+

Annual report prep (multi-entity) + RA updates.
Franchise & excise estimate modeling with CPA partners.
County business tax, personal property schedules, and reinstatement support.

Conversions & reorganizations

$1,950+

LLC ↔ corporation conversions, multi-entity holding company setups.
Director-managed upgrades for investor oversight.
Foreign qualification/withdrawal, BOI diagnostics, and lender-ready document sets.

Document review

$620 flat

Attorney redline of client-prepared Articles/OA.
Memo on Title 48 defaults, county recording, and F&E traps.
30-minute Zoom consult plus one follow-up revision.

Schedule a Tennessee LLC consult

Book a 30-minute Zoom or email me directly. I limit concurrent Tennessee matters so each file gets my personal attention.

Schedule via Calendly Email owner@terms.law