The cost of a Tennessee LLC starts at $300 to file with the Secretary of State, and most owners should budget at least $715 for the first year and about $415 every year after that. Those floors cover the required state filings, the minimum franchise tax, and a basic business license. Actual costs climb from there based on how many members the LLC has, what it earns, and whether you pay for services like a commercial registered agent or an attorney-drafted operating agreement.
What You Pay to Form the LLC
The one unavoidable formation cost is the $300 filing fee for Articles of Organization (Form SS-4270), paid to the Tennessee Secretary of State.1Tennessee Secretary of State. Business Forms and Fees The fee is the same whether you file online through the TNCaB portal or mail the form to the Division of Business Services in Nashville, and it applies to both standard and nonprofit LLCs.2Tennessee Secretary of State. Business Services
Two optional costs sometimes come up at this stage. If you want to lock in your business name before filing, a name reservation costs $20 and holds the name for 120 days.3Tennessee Secretary of State. Application for Name Reservation (Form SS-9425) A federal Employer Identification Number, needed by most LLCs for taxes, hiring, and bank accounts, is free directly from the IRS. The IRS warns against paid third-party sites offering the same service.4Internal Revenue Service. Get an Employer Identification Number
What You Pay Every Year
Three recurring charges hit nearly every Tennessee LLC: the annual report, the franchise tax, and a local business license.
Annual Report
Every LLC must file an annual report with the Secretary of State. The fee is $300 for an LLC with six or fewer members. Larger LLCs pay $300 plus $50 for each member above six, capped at $3,000. Missing the deadline can lead to administrative dissolution, which puts the LLC in inactive status.5Tennessee Secretary of State. Business FAQs Getting back in good standing costs $70 for reinstatement on top of any back fees.1Tennessee Secretary of State. Business Forms and Fees
Franchise and Excise Tax
Tennessee has no personal income tax, but LLCs face two state taxes administered by the Department of Revenue. The franchise tax is 0.25% of Tennessee net worth with a $100 minimum, and that minimum applies even if the business is inactive.6Tennessee Department of Revenue. Franchise and Excise Tax Due Dates and Rates7Tennessee Department of Revenue. Franchise and Excise Tax The excise tax is 6.5% of Tennessee taxable income. Under the Tennessee Works Tax Act, the first $50,000 of net earnings is exempt from the excise tax for tax years ending on or after December 31, 2024, so smaller LLCs may owe nothing on this line.8PwC. Tennessee Changes Franchise and Excise, Business, Sales Taxes
Business License
Most Tennessee LLCs need a local business license, and which one depends on gross receipts.9Tennessee Department of Revenue. Business Licenses Overview
- Businesses with more than $3,000 but less than $100,000 in annual gross receipts need a minimal activity license. The initial fee and the annual renewal are each $15, and there is no state business tax at this level.
- Businesses with $100,000 or more in annual gross receipts need a standard business license. The license itself is $15, but the holder must also register for state business tax and pay a $22 minimum.
The $100,000 threshold applies to tax years ending on or after December 31, 2023.10Tennessee Department of Revenue. Business Tax Registration and Licensing Local fees can vary by jurisdiction, so check with your county clerk.
Registered Agent Costs
Tennessee requires every LLC to maintain a registered agent with a physical in-state address to receive legal documents during business hours.11Harbor Compliance. Tennessee Registered Agent An LLC member, an employee, or any Tennessee resident can serve for free. Commercial registered agent services typically charge roughly $99 to $149 per year.
Other Fees You May Hit
Most routine post-formation filings with the Secretary of State cost $20 each. The common ones include:
- Articles of Amendment, used to change the Articles of Organization
- Certificate of Existence, often needed for loans, contracts, or registering in another state12Local Memphis. Tennessee Certificate of Existence
- Assumed name registration
- Change of registered agent or office
- Notice of Dissolution or Articles of Termination
If an LLC is administratively dissolved and you later file Articles of Termination to wind it down, that filing costs $100 rather than $20.1Tennessee Secretary of State. Business Forms and Fees
Operating Agreement
There is no state fee for an operating agreement. Tennessee law does not require every LLC to adopt one; board-managed LLCs must have one, while member-managed LLCs are not obligated to.13Justia. Tennessee Code § 48-206-101 Without one, the LLC is governed by the default provisions of Tennessee’s Revised LLC Act. Many owners hire an attorney to draft an agreement, and legal fees for that work add to startup costs.
First-Year Cost at a Glance
- Articles of Organization: $300
- Annual report: $300 minimum
- Franchise tax: $100 minimum
- Business license: $15 in most cases
- Excise tax: 6.5% of net earnings above the $50,000 exemption, if applicable
- Registered agent: $0 if self-appointed, roughly $99 to $149 per year commercial
- Name reservation: $20 optional
- EIN: free from the IRS
The baseline first-year cost works out to at least $715. The recurring floor after that is about $415 per year, covering the annual report, the franchise tax minimum, and a license renewal. Everything else scales with the size and earnings of the business.