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Starting an LLC in Tennessee comes with more costs than just filing the initial paperwork. But it doesn’t have to be as expensive as you think.
We explain all of the initial and ongoing Tennessee LLC cost details below, as well as give you tips on how to save money.
How much does an LLC cost in Tennessee?
It costs $300 to form an LLC in Tennessee. This is a fee paid for the Articles of Organization.
You’ll file this form with the Tennessee Secretary of State. And once approved, your LLC will go into existence.
Need to save time? Hire a company to form your LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
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In addition to this LLC filing fee, there are other costs to be aware of when forming a Tennessee LLC (Limited Liability Company).
Costs to forming a Tennessee LLC
There is a $300 one-time state filing fee to form a Tennessee LLC.
There are also ongoing fees (like a $300 Annual Report fee), which we discuss below.
LLC Costs in Tennessee
| Requirement | Cost |
|---|---|
| LLC Name | $0 |
| Registered Agent | $0 or $125 per year |
| Articles of Organization | $300 |
| Operating Agreement | $0 (free on our site) |
| EIN Number | $0 (free through IRS) |
| Annual Report | $300 (every year) |
| Taxes | varies (filed and/or paid every year) |
Tennessee LLC Articles of Organization Filing Fee ($300)
Starting an LLC costs $300 in Tennessee. This is the state filing fee for a document called the Tennessee Articles of Organization.
The Articles of Organization are filed with the Tennessee Secretary of State. And once approved, this is what creates your LLC.
The $300 fee is a one-time fee. You don’t have to pay any monthly (or annual) fees to start your Tennessee LLC.
Note: LLCs are the most common business structure used in Tennessee. They are the most popular business entity because they offer liability protection for the LLC owners.
Depending on the state, the Articles of Organization form is sometimes called a Certificate of Organization or Certificate of Formation. Articles of Organization is the most common name – but they all mean the same thing: the form used to create your LLC.
Tennessee business name cost ($0)
Naming your Limited Liability Company doesn’t cost anything. Your Tennessee LLC Name is approved (at no extra cost) when your Articles of Organization filing is approved by the state.
You may have read online that LLC Name Reservations are required. However, this is not true in most states. Tennessee doesn’t require a Name Reservation to form an LLC. Simply enter your desired LLC name on the Articles of Organization filing.
How much does a DBA cost? ($20)
A DBA is filed with the state or the county. In Tennessee, a DBA costs $20. But this Tennessee LLC filing fee is optional, since a DBA isn’t required. If your LLC will do business under its legal name (as shown on the Articles of Organization), you don’t have to get a DBA.
Note: A DBA is sometimes called a Trade Name, Fictitious Name, Assumed Name or Fictitious Business Name. They all mean the same thing.
Tip: You aren’t required to get a DBA for your LLC, so you might not pay this fee. For more information, read our article: Do I need a DBA?
Tennessee Registered Agent Fee ($0 or $125/year)
Tennessee law requires that you designate a Registered Agent when forming your LLC. However, there is no additional filing fee to list a Registered Agent on your Articles of Organization.
A Tennessee Registered Agent is a person or company who receives legal documents and state notices for your LLC. A Registered Agent needs a street address in the state and should generally be available during normal business hours.
There is no additional cost if you will be your own Registered Agent, or have someone you know be your LLC’s Registered Agent. This could be one of your business partners, or a friend or family member.
However, you have the option of hiring a Registered Agent service. This will cost you between $100 to $300 per year. But Registered Agent service companies offer other helpful business services and can protect your privacy.
Hiring a Registered Agent service is a good idea if:
- You don’t have an address in the state (Tennessee law requires Registered Agents to have a physical address in the state)
- You want to keep your address off public record (depending on which company you hire, you may be able to use their address to keep your address private)
Special offer: Hire Northwest to form your LLC ($39 + state fee), and you'll get a free year of Registered Agent service.
(Why is Northwest the best? Read our Northwest Registered Agent review)
LLC Operating Agreement Fee ($0)
A Tennessee LLC Operating Agreement is a written contract between the LLC Members. Operating Agreements include detailed information about LLC ownership, how the LLC is managed, and how profits are distributed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to each Member.
Most websites charge $50 to $200 for LLC Operating Agreements.
Here at LLC University®, we offer free LLC Operating Agreement templates for all types of LLCs.
LLC EIN Number Fee ($0)
An EIN Number is also known as an Employer Identification Number (EIN), Federal Tax Identification Number, or a Federal Employer Identification Number (FEIN).
This number is used to file income taxes, to open an LLC bank account, and to hire employees (if applicable).
Although many websites charge a service fee to get an EIN for your LLC, it can actually be done for free.
You can obtain an EIN for your LLC from the Internal Revenue Service (IRS) website at no cost. The online filing can be completed in a few minutes.
Tennessee LLC Annual Report Fee ($300/year)
Tennessee requires LLCs to keep their information up to date by filing an Annual Report.
This keeps your Tennessee LLC in good standing and in compliance with state law so it can continue operating. You simply confirm the information on the Annual Report, file it with the Tennessee Secretary of State, and pay the Annual Report fee.
The Tennessee LLC Annual Report costs $300 per year if your LLC has 6 or fewer Members. This fee is paid every year for the life of your LLC.
If your LLC has more than 6 Members, the Annual Report fee will be more than $300. Your LLC pays an additional $50 for each additional Member. For example, an LLC with 10 Members would pay $500 ($300 plus $50 times 4 additional members).
Tennessee Business License and Permit Fees (varies)
Depending on where your LLC does business in Tennessee and the industry you’re in, you may need to obtain additional Business Licenses or Permits. For example, you may need to get a City Business Permit.
The costs for these other business licenses or permits will vary depending on location and industry, but usually the fees are not very high. Some licenses and permits are issued at the state level, and others are issued by a municipality (the town, city, or county).
Limited Liability Company Taxes (varies)
There are many different types of Tennessee LLC taxes that owners must pay, so this annual cost varies widely.
Some of the taxes LLC owners pay include:
- Federal taxes
- State income tax
- Local income tax
- Business taxes
- Franchise tax
- Excise Tax
- Self-employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Property tax (if the LLC owns property)
Your Tennessee LLC taxes depend on your industry and amount of business activity, so we’re not able to provide an estimate. Every business is different, and your specific circumstances determine what taxes apply to your LLC.
Check with the Tennessee Department of Revenue for more information about taxes paid by Tennessee LLCs.
Note: By default, a Single-Member LLC is taxed like a Sole Proprietorship. And a Multi-Member LLC is taxed like a Partnership.
Hiring an Accountant
How much your small business pays in taxes is best determined by working with a qualified accountant in Tennessee.
The amount you’ll pay your accountant will vary. However, most accountants will charge $300 per year for a simple tax return, or up to $900 for more detailed filings.
Note: We recommend speaking with a few accountants in Tennessee to make sure they can help you meet all of your federal, state, and local tax obligations. We offer detailed tips on How to Find an Accountant.
Tennessee Secretary of State
If you have any questions about the cost of opening a Tennessee LLC, you can contact the Tennessee Secretary of State.
(Tennessee Secretary of State, Business Services)
Tennessee LLC Cost FAQs
How much does it cost to open an LLC in Tennessee?
It costs $300 to start a Tennessee LLC. This is a one-time filing fee for the LLC Articles of Organization.
Some LLCs may need a business license in Tennessee. This depends on your industry and where your LLC is located. The cost of local business permits varies. And depending on what your LLC does, you may need to obtain business insurance.
How much does an LLC in Tennessee cost per year?
All Tennessee LLCs need to pay $300 per year for the Annual Report. These state fees are paid to the Secretary of State. And this is the only state-required annual fee. All Tennessee LLCs have to pay ongoing fees for Annual Reports to remain in good standing.
If you hired a Registered Agent service, you’ll have an annual subscription fee to pay each year. This is usually about $125 per year.
Some LLCs may need a business license in Tennessee. This depends on your industry and where your LLC is located. You’ll need to check with your municipality to see if there are any annual renewal fees for the business permit.
Should I hire an LLC formation service?
You aren’t required to hire a professional service company (aka a Tennessee LLC formation service) to form your Tennessee LLC. You’re allowed to form your LLC yourself if you’d like. If you do it yourself, you’ll only pay the Tennessee LLC filing fee, not any service fees to a filing company.
However, if you want to save time and make sure your LLC is filed correctly, we recommend hiring Northwest Registered Agent.
Northwest Registered Agent has excellent customer service and they include Registered Agent services free for the 1st year. (Many LLC formation companies also offer Registered Agent services.) They also offer other services, like an Operating Agreement and filing your Annual Report.
Check out Best LLC Services for more suggestions.
Do I need to hire an attorney to form an LLC?
No, you aren’t required to hire an attorney to form your Tennessee LLC. You’re allowed to complete the LLC formation process yourself if you’d like.
However, some people may want to hire an attorney if their LLC has a complex ownership or management structure, has investors, or requires industry-specific documentation.
A business attorney usually charges between $800 and $2,500 to form an LLC (we can’t say for sure what the minimum fee would be, since every attorney charges differently).
How do I start an LLC in Tennessee?
Here are the steps to starting an LLC in Tennessee:
- Choose an LLC business name and make sure it’s available
- Choose who will be your Tennessee Registered Agent
- File the Tennessee Articles of Organization
- Complete and sign an Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- Open an LLC bank account
- Check whether you need a business or sales tax license in Tennessee
What’s the cheapest way to start Tennessee LLCs?
You can get an LLC cheaply by filing your formation documents yourself. You’ll also save money by being your own Registered Agent, and using our free LLC Operating Agreement template.
By forming your LLC yourself, being your own Registered Agent, and using our Operating Agreement template you can save over $400.
How long does it take to get an LLC in Tennessee?
How long it takes to get an LLC in Tennessee depends on how you file your Articles of Organization.
You can get an LLC in Tennessee approved immediately if you file online. On the other hand, filing by mail takes about 3-5 business days (plus mail time).
How much does a Tennessee business bank account cost?
It varies. Some banks charge monthly fees ($10 to $20 per month), but these can sometimes be avoided by meeting certain requirements. For example, if you make a certain number of direct deposits or maintain a specified minimum balance, then they’ll waive the monthly fees.
And you might be able to find a bank that doesn’t charge any monthly fees.
Before you open your LLC business bank account, we recommend calling and asking if there are ways to avoid the monthly maintenance fees.
How much is a Foreign LLC in Tennessee?
A Foreign LLC is an LLC formed in another state that must register (aka Foreign Qualify) in Tennessee. This is because the LLC is doing business in both states.
The Tennessee Foreign LLC cost is $50 per LLC Member. The maximum fee is $300 (if you have 6 or more Members). A Single-Member Foreign LLC would be $50.
If you form an LLC in Tennessee, it is called a “Domestic LLC”. If you formed your LLC in another state, it would be a Foreign LLC once you register it in Tennessee.
Is Tennessee a good state for an LLC?
Yes, Tennessee is a great state to start a business. Tennessee doesn’t charge a state business license fee, has simple Tennessee LLC requirements; and the state has quick approval times and helpful representatives at the Secretary of State if you have questions.
However, the most important factors in deciding where to start a business are where you live and where you’re doing business.
Meaning, if you live in or do business in Tennessee, then you should start your business in Tennessee. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business. And just because a certain state has cheaper LLC fees doesn’t mean it’s a good idea to form your LLC there.
For example, if you form an LLC in Wyoming, but live in and conduct business in Tennessee, you’ll also need to register your Wyoming LLC in Tennessee (and pay fees). And you’ll end up paying Tennessee taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you are a Tennessee resident, then yes, Tennessee is the best state to form an LLC. If you don’t live in and do business in Tennessee, then no, Tennessee probably isn’t a good state to start an LLC.
References
Tennessee Secretary of State: Business FAQs
Tennessee Secretary of State: Business Forms & Fees
Tennessee Secretary of State: Business Information
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
Tennessee LLC Guide
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