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
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
First 90-day implementation
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.
Formation & OA package
- 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
- 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
- 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
- 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.