Why pick a Tennessee corporation?
When you need predictable stock structures, cheap annual reports, or mandated professional entities, Tennessee corporations deliver. Expect $100+ charters (depending on authorized shares), county register filings, and the same F&E tax overlay that LLCs face.
Debating LLC instead? Review the Tennessee LLC guide for the director-managed alternative.
| Entity | Statute | Use cases | Highlights |
|---|---|---|---|
| Stock corporation (C) | Title 48, Ch. 11â27 | Scalable operating companies, QSBS planning. | Board/officer governance, multiple share classes, 8.25% combined state rate (F&E equivalent). |
| S corporation | Same charter + IRS election | Owner-operators wanting payroll + dividend planning. | S election is tax-only; still files $20 annual report and F&E returns. |
| Professional corporation (PC) | Title 48, Ch. 24 | Law, medical, dental, engineering practices. | Licensed shareholders/directors/officers; malpractice remains personal. |
| Benefit corporation | Title 48, Ch. 26 | Mission-driven ventures needing statutory public benefit. | Annual benefit report + stakeholder duties alongside profit motive. |
| Nonprofit (brief) | Title 48, Ch. 51â68 | Charities, associations. | $5 annual report, separate IRS filings; mention for differentiation only. |
Pre-charter checklist
Why corporations despite LLC costs
- Cheap $20 annual reports vs $300+ for LLCs.
- Clear board/officer structure investors expect.
- Eligibility for QSBS after five-year holding period if structured correctly.
- Benefit corporation status for mission branding.
Charter filing & first 90 days
SS-4417 charters drive everythingâfail to plan share counts and youâll amend before your first financing. Pair SoS filing with county recording and a disciplined organizational meeting.
SS-4417 breakdown
| Section | Key inputs | Attorney tips |
|---|---|---|
| Name | Include âCorp./Inc./Company/Limitedâ or abbreviations. | Run state + county search; queue assumed name filings for brand variants. |
| Authorized shares | Total shares + par value + class rights. | Base fee covers up to 5,000 no-par shares or $100k par; each additional block adds $20 (capped at $3,000). |
| Registered agent/office | TN street address, county, zip. | Use annual report to update; RA changes outside the report cost $20. |
| Principal office | Street address; triggers county recording. | Keep consistent with business tax license applications. |
| Benefit election | Check box + describe general benefit (and specifics if desired). | Plan for annual benefit report from day one. |
| Other provisions | Director liability limits, preemptive rights, transfer restrictions, close corporation provisions. | Insert indemnification language referencing Tenn. Code §48-18-301 et seq. |
Timeline I follow
Sample charter fee math
- Small service firm: 1,000 no-par shares â $120 total charter.
- Venture-ready: 10M shares @ $0.0001 par â roughly $1,120 (still below $3,000 cap).
- Professional corp: 100 par shares for ownership percentages â $120.
Governance, professional & benefit structures
Corporate governance remains board-centric, but Tennessee statutes let you tweak boards with close-corporation provisions or invite mission oversight via benefit corps.
Bylaws & shareholder agreements
- Bylaws cover board size, staggered terms, notice, committees, officer roles, indemnification, and meeting procedure.
- Shareholder agreements manage transfer restrictions, buy-sell triggers, drag/tag, rights of first refusal, and deadlock mechanics.
- Close corporations may dispense with a board through unanimous shareholder agreementâuseful for family businesses, but lenders prefer traditional boards.
Professional corporations
SS-4418 charters require all shareholders, directors, and officers to be licensed in the profession (lawyers, doctors, dentists, engineers, etc.). Many boards want proof of professional liability coverage and separate certificates of registration. PCs still pay F&E tax and file $20 annual reports.
Benefit corporations
Elect benefit status in the charter. Directors must consider general public benefit plus any specific benefit listed. An annual benefit report referencing a third-party standard goes to shareholders (and SoS if desired). Benefit status does not change tax treatment but sets investor expectations; I usually pair it with board policies outlining metrics and stakeholder engagement.
Nonstock/nonprofit mention
Nonprofits use different chapters (51â68) and have $5 annual reports. Mentioned here only to distinguish themâsave the deeper dive for the nonprofit hub.
Conversions & domestications
Tennessee supports statutory conversions between LLCs and corporations and allows domestication in/out. When bringing a Delaware corp into Tennessee, file articles of domestication plus a Tennessee charter, then withdraw from the old jurisdiction if needed. Every conversion or merger must also be recorded with the county register.
Taxes, reports & ongoing obligations
Corporations and LLCs share the same F&E burden. The advantage here is the cheap annual report, but you still need clean records for lenders and regulators.
Franchise & excise tax
- Excise: 6.5% of net earnings from Tennessee.
- Franchise: 0.25% of the greater of net worth or TN-sited property; $100 minimum.
- Applies to C and S corporations alike; due 15th day of 4th month after fiscal year.
- PENALTIES: 5%/month (filing) and 0.5%/month (payment), up to 25% each.
Annual report
$20 for for-profit corporations, $20 for PCs, $5 for nonprofits. Due April 1 for calendar-year corps. Use the report to update principal office or RA (adds $20 if RA changes). Late reports trigger $70+ penalties and eventual revocation.
Corporate records
Maintain bylaws, minutes, shareholder resolutions, stock ledger, equity plans, benefit reports, and county recording receipts. Keep corporate and personal funds separate to avoid veil-piercing claims.
Comparison snapshot
| Factor | LLC | Corporation |
|---|---|---|
| Formation fee | $50/member (min $300) | $100 base + share tax |
| Annual report | $50/member (min $300) | $20 flat |
| Governance | Member/manager/director-managed | Board/officers/shareholders |
| Tax | Franchise & excise + federal classification | Franchise & excise + C/S elections |
County filings matter: Charters, amendments, mergers, dissolutions, and conversions must be recorded with the register of deeds in the county of the principal office. Banks, title companies, and acquirers routinely request stamped copiesâkeep digital scans handy.
CTA status, foreign qualification & pitfalls
Domestic Tennessee corporations are currently exempt from the Corporate Transparency Act, but foreign-formed companies registering here are still reporting companies. Pair that with county filings and you see how compliance can go sideways fast.
CTA / BOI
FinCENâs March 2025 interim rule exempts domestic corporations from BOI reporting. I still track ownership for clients in case the injunctions are reversed. Foreign corporations (e.g., Canadian or Delaware corps registering in Tennessee) must file BOI within 30 days unless exempt.
Foreign qualification checklist
- File Application for Certificate of Authority + share-based fees.
- Provide certificate of existence < 60 days old.
- Appoint Tennessee RA and record with county register.
- Register for F&E, sales/use, and local business tax immediately.
Docs lenders ask for
- Certified charter + county recording receipt.
- Board resolution authorizing Tennessee authority.
- Good-standing certificates for both home state and Tennessee.
Frequent pitfalls: (1) Forgetting county recording, which later delays closings. (2) Issuing too few authorized shares and needing an amendment before the first financing. (3) Skipping annual reports or F&E returns, resulting in revocation and tax liens. (4) Benefit corps neglecting annual benefit reportsârequires board attention even though SoS doesnât police aggressively.
My services for Tennessee corporations
This is an attorney-led practice. I draft the charter, bylaws, agreements, and closing checklists myself and coordinate with your CPA, investors, and licensing boards.
Formation & bylaws
- SS-4417 drafting, filing, and county recording.
- Custom bylaws, organizational consents, stock ledger, certificates.
- Initial compliance calendar (annual report, F&E, benefit report).
Professional / benefit corp package
- SS-4418 or benefit amendments, board policies, benefit reporting framework.
- Licensing board coordination and insurance confirmations.
- Shareholder agreements tuned to professional ownership limits.
Financing readiness
- Preferred stock or SAFE/convertible note documentation.
- Equity incentive plan + award agreements.
- Investor rights, voting, and drag/tag agreements.
Reinstatement & clean-up
- Catch-up annual reports/F&E filings and payment plans.
- Reinstatement filings, RA updates, and board/shareholder minute cleanup.
- Due diligence binder for lenders or acquirers.
Book a Tennessee corporate consult
Schedule a 30-minute Zoom or reach out by email. I keep the docket lean so I can stay hands-on with each corporation.