How Much Does an LLC Cost in Tennessee
It costs at least $300 to form an LLC in Tennessee. But these additional expenses could increase the total to over $3,000.
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Here are the following fees to consider:
- Articles of Organization: $300 to $3,000
- Certificate of Authority: $300 to $3,000
- Annual Report: At least $300
- Business Licenses: At least $15
- Franchise Tax: At least $100
- Registered Agent: $0, or $100-$300/yr
- Operating Agreement: $0, or up to $500+
- Employer Identification Number: $0, or $50 to $99
- BOI Report: $0, or $25 to $149
- Optional Fees: Up to $3,000+
In 2023, Tennessee's economy surged with a remarkable 5.2% annual GDP growth rate.[1] This thriving business scene suggests forming an LLC in the Volunteer State could be a good idea.
The question is, how much for an LLC in Tennessee? Read on to see how much it will cost you.
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Tennessee Domestic LLC Formation Fee
Cost: $300 to $3,000[2]
To form an LLC in Tennessee, you must submit the Articles of Organization to the Secretary of State. Once the documents are approved, your LLC will be recognized as legally separate from you.
The minimum filing fee is $300. If your LLC has more than six members, you must pay $50 per additional member. The maximum is $3,000.
A Tennessee LLC's Articles of Organization contain the following information:[2]
- Limited Liability Company Name
- Business address
- Registered agent name and address
- The last month of the LLC's fiscal year
- Management structure (member or manager-managed)
You can submit the Articles of Organization online, by mail, or in person. Cash payment is only available for in-person filings.
A manager-managed LLC means only the designated manager is responsible for the daily operations. Alternatively, an LLC could be member-managed so all owners share equal responsibility in managing the business.
Tennessee Foreign LLC Formation Fee
Cost: $300 to $3,000[3]
If your LLC is already established in a different state and you want to expand your business to Tennessee, you need to register it as a foreign LLC.
Foreign LLCs in Tennessee must submit a Foreign Certificate of Authority to the Secretary of State with the $300 filing fee. If your LLC has more than six members, you must pay $50 per additional member. The maximum fee is $3,000.[3]
You must register an assumed name if your foreign LLC's original name is unavailable in Tennessee. This becomes your LLC's official business name only in Tennessee.
A series LLC has a main "parent" LLC that can create separate "series" within itself. Each series can hold its assets, contracts, and business activities.
The main benefit here is the debts and legal issues of one series generally don't affect the other series or the parent LLC.
Tennessee LLC Annual Report Fee
Cost: At least $300[4]
Tennessee LLCs must submit annual reports to the Secretary of State each year. It shows any changes to the LLC's address, registered agent, and other details. Once submitted, your LLC is considered in good standing.
The annual report fee varies depending on the number of LLC members. There's a $300 minimum fee, but it increases by $50 per additional member over six members.[4]
There's an additional $20 fee if your registered agent's name or address changes. So for a seven-member LLC with a new registered agent, the annual report fee is $370.
Annual reports are due on the first day of the fourth month following the LLC's fiscal year closing. If your LLC's fiscal year ends in April, its annual report is due August 1st. It can be filed online, by mail, or in person.
Here are some of the most common reasons why Tennessee's Secretary of State reject annual reports:
- Insufficient payment
- The annual report is not signed
- The handwriting is illegible
Tennessee LLC Permits and License Fees
Cost: At least $15 each year[5]
Most businesses in Tennessee must apply for a state business license. It's issued by the county office where your LLC is located. It takes up to 10 business days to get the permit after you pay the $15 fee.[6]
The type of license you need is based on the LLC's gross sales:[5]
- No license: Under $3,000 in gross sales
- Minimal activity license: For gross receipts of more than $3,000 but less than $100,000
- Standard business license: For gross receipts 100,000 or more
Additionally, your LLC may need to get local business permits. If your LLC does business in two cities, you may need to get a separate license for each city. Local business permit fees vary per city and could be renewable yearly.
Tennessee LLC Taxes
Cost: At least $100 each year[7]
Tennessee doesn't have a state income tax. However, there's a mandatory franchise tax each year. It's 0.25% of your LLC's net worth or real tangible property in Tennessee, whichever is greater. The minimum tax is $100.
The franchise tax is due each year by the 15th day of the fourth month following the LLC's fiscal year-end. If your LLC's fiscal year ends in April, its annual report is due August 15th.
You must also pay the excise tax, which is 6.5% of the LLC's taxable income in the state.[7] Then, self-employed LLC members must pay federal income taxes.
2024 Federal Income Tax Rates:[8]
| Tax Rate | Taxable Income |
|---|---|
| 10% | $0 to $11,600 |
| 12% | $11,601 to $47,150 |
| 22% | $47,151 to $100,525 |
| 24% | $100,526 to $191,950 |
| 32% | $191,951 to $243,725 |
| 35% | $243,726 to $609,350 |
| 37% | Over $609,350 |
Self-employed LLC members must also pay the 15.3% federal self-employment tax.[9] This tax covers Social Security and Medicare contributions.
The fees that you'll incur when forming an LLC can be claimed as tax deductions. You can write off the following expenses:
Tennessee LLC Optional Fees
While the Tennessee LLC fees below are optional, some are unavoidable depending on your business needs. For example, obtaining a Certificate of Existence is often necessary when opening a business bank account.
| Tennessee LLC Optional Fees | Cost |
|---|---|
| Registered Agent Services | Up to $300+ |
| Statement of Change | $20 |
| Operating Agreement | $0 to $500+ |
| Employer Identification Number | $0 to $99 |
| Beneficial Ownership Information Report | $0 to $149 |
| LLC Name Reservation | $20 |
| LLC Trade Name | $20 |
| Articles of Correction | $20 |
| Articles of Amendment | $20 |
| Certified Copy of Documents | $20 |
| Certificate of Good Standing | $20 |
| Website Domain | $10 to $20 |
| Business Insurance Premiums | Varies |
Tennessee does not offer expedited services. Online filings are processed immediately, while paper filings can take up to 5 days.
Tennessee LLC Registered Agent Fee
Annual Cost: $0, or $100-$300/yr
In Tennessee, you must have a registered agent to receive business and legal documents for your LLC. This includes government notices, tax forms, and annual reporting forms.
You can technically be your LLC's registered agent—as long as you're at least 18 and have a physical street address in Tennessee. You must also be available to receive documents during business hours.
However, your address will be public record. So many LLCs like to hire a registered agent service to keep their personal details private. These services usually charge $100-$300 per year to be your registered agent.
Tennessee LLC Change of Registered Agent Fee
Cost: $20[11]
An LLC can change its registered agent's details anytime. If this happens, you must submit a Statement of Change to the Secretary of State immediately. Changes include the registered agent's name and address.
There's a different form for registered agents who want to resign from the role. It also costs $20.[12]
In Tennessee, the Articles of Amendment are used to change the business name, address, and other details. The Statement of Change is focused solely on changes regarding the registered agent.
Tennessee LLC Operating Agreement Fee
Cost: $0, or up to $500+
LLCs in Tennessee are not required to have an operating agreement. However, it's recommended because it defines important rules and regulations that all members must follow.
An LLC operating agreement contains the following:
- The roles and responsibilities of each member
- How new or departing members will be treated
- How business profits and losses will be divided
Ideally, you should already have a signed Operating Agreement before forming an LLC in Tennessee. But if your LLC is already formed, you can always draft it yourself after.
Alternatively, an LLC attorney might charge you a $500 flat fee for a standard operating agreement. If you have more complex details, the cost could be higher.
You can write your own with free online operating agreement templates. If you want a professional to create it for you, LLC services usually offer this as a part of their packages for much less than attorney costs.
Employer Identification Number
Cost: $0, or $50 to $99
Any LLC with more than one member or with employees must have an EIN, regardless of how it's taxed. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax-related purposes.
You can just apply for an EIN for free on the IRS website. But if you'd like an LLC service to process it for you, you can do so for a small fee. Here are some providers that do this and their pricing:
- Northwest Registered Agent: $50
- Bizee: $70
- ZenBusiness: $99
Single-member LLCs in Tennessee don't require an EIN, but it's almost essential in practice. For instance, you'll need one if you hire employees or want to open a business bank account.
Yes. Separating your LLC's finances from personal assets is a requirement of liability shielding. Use a separate bank account to accept payments and pay business expenses to prevent piercing the corporate veil .
Beneficial Ownership Information Report
One-Time Cost: $0, or up to $149
The Beneficial Ownership Information (BOI) is a one-time report that must be submitted to the Financial Crimes Enforcement Network (FinCEN) within 90 calendar days of your LLC's formation.
[13]
It includes information about the LLC's beneficial owners, including name, birth date, and address.
FinCEN doesn't charge a fee to submit your BOI report. But you can pay an LLC service to process it for you and save yourself the hassle:
- Northwest Registered Agent: $25
- LegalZoom: $149
- ZenBusiness: $149
You're considered a beneficial owner if you own 25% or more of the ownership interests in your LLC. Or if you exercise substantial control over the LLC.
Tennessee LLC Name Reservation Fee
Cost: $20[14]
If you've already got a business name but aren't ready to form an LLC, you can reserve your desired name first. It will prevent others from using that name for 120 days.[14]
Unlike other states, you can use a name already being used by an active business. Just fill out the Application for Use of Indistinguishable Name and pay an additional $20 fee.[15]
Remember to review Tennessee's detailed list of naming regulations to prevent your reservation from being rejected. For instance, an LLC name must include LLC, Ltd., or a similar abbreviation.
Check online to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL to prevent others from acquiring it.
Tennessee LLC Assumed Name Fee
Cost: $20[16]
An assumed name (also known as "Doing Business As" or DBA) allows your LLC to operate under a name different from its legal name registered with the state.
Some LLCs use a DBA for branding purposes. It's also ideal if you want to use a name without "LLC" at the end.
Assumed names in Tennessee must be renewed every five years for the same price.[17]
An assumed name allows a business to operate under a name different from its legal name. Meanwhile, a trademark is an intellectual property protection that legally protects your brand name, logo, or slogan at the national level.
Tennessee LLC Articles of Correction Fee
Cost: $20[18]
After your Tennessee LLC application is approved, review all the details of the Articles of Organization carefully.
If there are errors, like a misspelled business name or incorrect address, correct them as soon as possible by filing the Articles of Correction.
Tennessee LLC Articles of Amendment Fee
Cost: $20[20]
Your Tennessee LLC's Articles of Organization contains specific details about your business. Should these details change, you must submit the Articles of Amendment to the Secretary of State.
File the Articles of Amendment if you:[20]
- Modify the LLC name
- Appoint a new registered agent
- Change principal address
There's a separate form for changes to the mailing address. You can file this with the Secretary of State for free.[21]
The Articles of Correction are for fixing mistakes in initial filings. Meanwhile, the Articles of Amendment update key details as the LLC evolves.
Tennessee LLC Certified Copy Fee
Cost: $20 per set of copies[22]
Certified copies of documents verify that your LLC is legitimate and that its details are accurate.
You might need these for circumstances like opening a business bank account or expanding your LLC in another state.
Additionally, some LLCs keep certified copies of their initial Articles of Organization and Articles of Amendment (if any) for recordkeeping purposes.
The Certificate of Formation and Articles of Organization mean the same in most states. But in Tennessee, these are two different forms. The Articles of Organization are the papers you file when forming an LLC. A Certificate of Formation, which costs $20, is a single-page document that certifies your LLC was formed at a certain date.[23]
Tennessee LLC Certificate of Existence Fee
Cost: $20[24]
A Certificate of Existence, also known as a Certificate of Good Standing, is an official document by the Tennessee Secretary of State. It verifies that your LLC is updated with all state filings and has paid all its state fees and taxes.
You might need a Certificate of Existence to:
- Open a bank account
- Apply for business loans
- Qualify for business insurance
- Conduct business as a foreign LLC
Contact the Tennessee Secretary of State to ask why your LLC is in bad standing. The most common reasons include:
- Failure to file the annual report
- Failure to renew the annual state business license
- Not having a registered agent in Tennessee
Pay any outstanding fees and penalties. Then, file an Application for Reinstatement along with the $70 filing fee.
Business Website Domain Fee
Annual Fee: $10 to $20
A website domain and social media presence provide dedicated online spaces for your business. It's essential for marketing, customer engagement, and brand visibility in today's digital world.
Even if you aren't planning to build a business website now, you could still buy the domain name. This will prevent others from using your LLC's name as a web address.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
Business Insurance Premiums
Cost: Varies
In Tennessee, most businesses with five or more employees must have workers' compensation insurance.[25] Exemptions to this rule include construction companies. They must have workers' compensation insurance regardless of the number of employees.
Tennessee does not have a state-funded workers' compensation insurance program. Self-insure or get from a private company. The cost depends on factors like the number of employees, the risk level of your industry, and your past insurance claims.
You might also be required to get other types of insurance:
- General liability insurance
- Commercial property insurance
- Professional liability insurance
- Cyber liability insurance
Curious to know how much it costs to maintain an LLC in Tennessee? Use the calculator below to get a clear picture of your ongoing expenses.
Bottom Line
In summary, the Articles of Organization fee costs at least $300 in Tennessee. There's an additional $50 per additional member for LLCs with more than six members.
The annual report is filed yearly, with a minimum $300 filing fee. Other annual expenses include the $15 business license and $100 (or more) franchise tax.
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Economy Package at $149 + State Filing Fees
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The total cost will increase depending on the additional services, documents, and licenses your LLC needs. Ultimately, it's never a bad idea to set aside an extra budget for unexpected fees.
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References
- ^ USA Facts. Economy of Tennessee, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Articles of Organization Limited Liability Company, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Application for Certificate of Authority Limited Liability Company, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Business Services Launches Annual Report How-To Videos, Retrieved 06/24/2024
- ^ Tennessee Department of Revenue. Step 2: Getting Your Licenses and Permits, Retrieved 06/24/2024
- ^ Tennessee Department of Revenue. Registration and Licensing, Retrieved 06/24/2024
- ^ Tennessee Department of Revenue. Due Dates and Tax Rates, Retrieved 06/24/2024
- ^ IRS. Federal Income Tax Rates and Brackets, Retrieved 06/24/2024
- ^ IRS. Self-Employment Tax (Social Security and Medicare Taxes), Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Business Entity Reinstatement, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Change of Registered Agent/Office, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Resignation of Registered Agent of a Limited Liability Company, Retrieved 06/24/2024
- ^ Financial Crimes Enforcement Network. Beneficial Ownership Information, Retrieved 10/02/2024
- ^ Tennessee Secretary of State. Application for Name Reservation, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Written Consent for Use of Indistinguishable Name, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Application for Registration of Assumed Name, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Frequently Asked Questions for this Division, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Articles of Correction, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Service Fee, Retrieved 08/04/2024
- ^ Tennessee Secretary of State. Articles of Amendment to Articles of Organization, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Change of Mailing Address, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Request for Copy of Documents, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Certificate of Formation, Retrieved 06/24/2024
- ^ Tennessee Secretary of State. Request for Certificate of Existence/Authorization, Retrieved 06/24/2024
- ^ Tennessee Department of Labor & Workforce Development. Who Must Carry Insurance?, Retrieved 06/24/2024
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