How to Form an LLC in Tennessee | 2025

Tennessee’s combination of low costs, tax advantages, and supportive infrastructure makes it an excellent state for forming an LLC. It’s no wonder that countless entrepreneurs have turned to the Volunteer State to achieve their business dreams.

If you’re looking to get started, you’re in the right place. This article explores how to form an LLC in Tennessee, walking aspiring owners through a step-by-step guide to ensure they’re positioned to stay in good standing and maintain long-term business success. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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What are the benefits of starting an LLC in Tennessee?

Starting a limited liability company or LLC in Tennessee offers numerous benefits for entrepreneurs and small businesses:

Favorable Business Environment

Tennessee does not have income tax on salaries, wages, bonuses or any other type of work income. LLCs also enjoy pass-through taxation, meaning that profits and losses are reported directly on members’ personal tax returns. That means the members of your LLC avoid double taxation.

Even better, there are a variety of economic development programs designed to support growing businesses in the state. Notably, the Job Tax Credit rewards taxpayers who invest in Tennessee and create jobs as a result of their investment.¹

Nonresidents are authorized to form and manage an LLC in the state, just as long as they appoint a registered agent with a physical Tennessee address and provide a US business address during registration. You can use virtual offices or registered agent services to fulfill this requirement.

Robust Asset Protection

A key concern for any business owner is maintaining a clear separation between their personal and business finances. Fortunately, Tennessee offers limited liability protection, shielding members’ assets from business debts and legal claims. This protection applies to multi-member and single-member LLCs, ensuring members aren’t personally liable for their business obligations.

Also, Tennessee provides charging order protection, which prevents creditors from seizing ownership interests in the LLC to satisfy personal debts. As a result, businesses can protect their assets and maintain continuity while maintaining management control.

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How to Start an LLC in Tennessee in 7 Steps

The state of Tennessee has a relatively straightforward process in place for anyone looking to start an LLC. Follow these seven steps to get started.

Step 1: Name your Tennessee LLC

Like most states, Tennessee has some naming rules and guidelines for forming an LLC.

• The name must be unique and distinguishable. Check out Tennessee's business name availability tool to make sure you have the legal authority to use your name of choice.
• The name must include an appropriate identifier. For example, “limited liability company” or a related abbreviation, like “LLC.”
• The name must have the appropriate approvals. Terms like “bank” or “mortgage” require written approval from the Tennessee Department of Financial Institutions.
• The name can’t imply that you’re associated with the government. For example, it can’t imply affiliation with the state or local government or a charity or professional organization without their approval.²

You can reserve your business name for up to 120 days by filing an Application for Name Reservation with the Tennessee Department of State.

Step 2: Find your registered agent

Tennessee mandates the appointment of a registered agent for every business entity. This is the person who’s authorized to receive official legal documents and notices from the state on behalf of your LLC.

If you’re able to accept the responsibility, you can serve as your registered agent, as long as you meet the following requirements:

• Over 18 years of age.
• Have a physical address in Tennessee.
• Available during regular business hours.

If you cannot act as your LLC’s registered agent, or if you prefer to have someone else fill the role, you can hire an external individual or agency to stand in for you.

Step 3: File articles of organization

Next, you’ll prepare the articles of organization. This is the formal document that officially establishes your LLC with the state of Tennessee.

You can file your LLC’s articles of organization through Tennessee’s online Charity and Business Filing System.⁴ Also, you can mail in your application or submit it in person. Currently, the filing fee stands at $50 per member, with a minimum charge of $300 and a maximum charge of $3,000.³

If the articles of organization are approved, you’ll receive a certificate of formation and a state business entity number.

Step 4: Create a Tennessee LLC operating agreement

While it’s not mandatory to create an operating agreement in the state of Tennessee, it’s still considered a prudent step for any aspiring entrepreneur looking to protect their financial interests over the long term.

Essentially, an operating agreement outlines how your LLC is managed by clearly defining ownership and profit allocation, management structure, decision-making processes, and voting rights. Establishing a clear legal separation between the LLC and its owners helps to shield personal and business assets from liabilities.

Also, a Tennessee LLC operating agreement establishes procedures for settling disputes, member exits, and dissolution. If you don’t have one in place, Tennessee will handle litigation following state law, rather than the best interests of your corporation.

Step 5: Get an EIN

An Employee Identification Number (EIN) helps establish legal and financial separation between an LLC and its owners.

Also known as a federal tax identification number, an EIN helps the owners of single-member LLCs reduce the reliance on their personal Social Security Number for business transactions. As a result, it minimizes the risk of identity theft while reinforcing liability protection.

Multi-member LLCs usually require an EIN to file taxes, manage payroll, and open a business bank account—a step we’ll explore in more detail in the next section.

LLC owners can apply for an EIN by mail, fax, or through the IRS website.⁵ The process typically takes minutes, with the EIN issued immediately upon completion, though it takes a bit longer for those who file by mail. Non-citizens without a Social Security Number must apply via mail, fax, or phone using Form SS-4.

Step 6: Open a business bank account

LLC owners who open a separate bank account for their business need established a clear separation between personal and business assets, furthering their personal liability protection.

To open a business bank account, gather the required documents and follow your bank’s procedures. You’ll likely need to include:

• Formation papers
• Operating agreement
• EIN confirmation
• Business license (if applicable)

Tennessee LLCs—unless exempt—must submit details about beneficial owners to the Financial Crimes Enforcement Network or FinCEN. Reports are filed electronically via FinCEN’s BOI E-Filing portal, requiring information like owners’ names, birthdates, addresses, and identification numbers.⁶ Many Tennessee banks require BOI verification when opening a business account to ensure compliance with anti-money laundering protocols.

Some banks may also require in-person visits or additional documentation for non-residents.

Step 7: Register for state taxes and business licenses

Most businesses are required to register through the Tennessee Taxpayer Access Point (TNTAP), a centralized online portal for tax accounts.⁷ Filing is due quarterly or annually, depending on revenue.

Nonresident-owned LLCs may be able to avoid US income taxes, so long as all members are foreign individuals and their home country doesn’t tax foreign income. That said, it’s important to check with a tax consultant to ensure compliance with state and federal regulations.

After TNTAP registration, some businesses will need to apply for a license. While the state lacks a general business license, most LLCs must secure industry-specific permits (for example, for architecture or insurance) or local licenses through county or municipal clerks.

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How much does it cost to start an LLC in Tennessee?

It costs a minimum of $300 to file the Articles of Organization with the Tennessee Secretary of State. The fee is $50 per LLC member, with a minimum fee of $300 and a maximum fee of $3,000. Additional costs may include hiring a registered agent and filing an annual report, which costs $300 a year.

Can I open an LLC in Tennessee without living there?

Yes, you can open an LLC in Tennessee without living there. As with most states, you’ll need to have a registered agent with a physical address in the state, though you can hire someone to fill the role on your behalf.

Can a nonresident open a company in Tennessee?

Yes, nonresidents can open a company in Tennessee as long as they meet the state’s requirements, file the proper paperwork, and pay the requisite fees.

Comparison with Other States

Each state has slightly different requirements associated with forming an LLC. If you’re looking for certain tax benefits or privacy requirements, for example, you may find some states more suitable than others:

Feature	Tennessee	Kentucky	Virginia	Georgia
Filing Fee	$300 minimum	$40	$100	$102
Annual Report Fee	$300	$15	$50	$50
Privacy	Moderate	High	High	High
Tax Environment	No state income tax for individuals	Limited Liability Entity Tax (LLET) based on gross receipts	No state income tax or franchise tax	State income tax of 6%; some benefits available for LLCs
Best For	Robust liability protections	Cost-conscious startups	Privacy and tax simplicity	Privacy-conscious local businesses

The Bottom Line

Thanks to its low cost of entry, minimal ongoing requirements, and favorable tax environment, Tennessee remains a leading choice for entrepreneurs looking to form an LLC.

By following the steps carefully outlined in this guide, LLC owners can remain in good standing with the state while getting their business off the ground.

Tennessee LLC FAQs

Privacy Protections for Tennessee LLCs

Tennessee LLCs benefit from privacy protections, since the state doesn’t require listing members or managers in public records. Only the registered agent’s information is disclosed.

Why Do People Use Tennessee for LLC?

People choose Tennessee for LLC formation thanks to its lack of state income tax on LLCs, strong asset protection, minimal paperwork, and affordable fees. Tennessee’s laws make it easy to manage ownership and protect personal assets from business liabilities.

Is Tennessee an LLC Tax-Free?

No, Tennessee LLCs aren’t totally tax-free. While there isn’t a state income tax on LLC profits, LLCs still need to pay the state’s franchise and excise taxes.

What Are the Disadvantages of a Tennessee LLC?

The disadvantages of a Tennessee LLC include the high setup and annual fees. It costs a minimum of $300 to form an LLC in the state, and $50-$300 annually to file mandatory reports. LLCs also need to comply with state tax obligations.

Form an LLC in State
Utah
Texas
South Carolina
Rhode Island

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Sources:

1. Job Tax Credit
2. Business Name Availability Guidelines
3. Articles of Organization Limited Liability Company
4. Charity and Business Filing System
5. the IRS website
6. BOI E-Filing portal
7. online portal