How to Start a Business in Tennessee (2026 Guide)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 20, 2026 · Last updated Aug 20, 2026

To start a business in Tennessee you choose a structure, file Articles of Organization (Form SS-4270) with the Secretary of State at $50 per member, minimum $300, name a Tennessee registered agent, get a free federal EIN, and register with the Department of Revenue for business tax and the franchise and excise taxes.

Step 1: Choose a Business Structure

The structure you pick determines what you file, what you owe, and what you personally risk. A sole proprietorship needs no state formation filing but offers no separation between business debts and personal assets. A limited liability company is the usual choice for a new Tennessee small business: it creates that separation while remaining a pass-through for federal income tax. A corporation makes sense when you plan to issue stock to investors or want a board and bylaws.

Tennessee adds a wrinkle other states do not. Because the state has no general individual income tax but does apply franchise and excise taxes to LLCs, the usual "pass-through means no entity tax" logic does not hold here. A Tennessee LLC typically owes entity-level tax even though its members owe no state income tax on the distributed profit. Factor that into the structure decision from the start, and read Tennessee LLC tax filing before committing.

Step 2: Pick and Clear a Name

A Tennessee LLC name must be distinguishable on the records of the Secretary of State and must include an entity identifier such as "Limited Liability Company," "L.L.C.," or "LLC." Run the exact name through the Tennessee business entity search first. Availability there means you may file the name — it is not a brand clearance. Before investing in signage or packaging, search the federal trademark register as well, and consider a trademark filing if the brand matters.

If you plan to operate publicly under a different name, Tennessee handles that with an assumed name filing; see Tennessee DBA filing. Name reservation is available for a modest fee when you have settled on a name but are not ready to file the articles.

Step 3: File the Articles of Organization

Your LLC exists when the Secretary of State accepts the Articles of Organization, Form SS-4270. Tennessee prices this filing unusually: the fee is $50 per member, subject to a $300 minimum and a $3,000 maximum. A single-member LLC and a six-member LLC both pay the $300 floor; a twenty-member LLC pays $1,000. That $300 minimum makes Tennessee one of the more expensive states in which to form a small LLC, which is worth knowing before you compare states.

The form asks for the LLC name, the registered agent and registered office, the principal executive office address, the number of members, whether management is member-managed or director-managed, and the fiscal year close month — that last field is what later drives your annual report deadline, so answer it deliberately. Details are covered in Tennessee articles of organization, and the accepted filing is what other states would call a certificate of formation.

Step 4: Appoint a Registered Agent

Every Tennessee LLC must continuously maintain a registered agent and a registered office at a Tennessee street address where process can be served during business hours. A post office box will not do. The agent may be an individual resident of Tennessee or an entity authorized to do business in the state, and the address appears in the public record.

You may serve as your own agent if you live in Tennessee, but many owners hire a commercial registered agent for privacy and for the reliability of having someone at a fixed address during business hours. Update the appointment promptly whenever the agent or address changes; an out-of-date agent is the most common route to a default judgment and to missed state notices that end in administrative dissolution. See Tennessee registered agent requirements.

Step 5: Get a Federal EIN

An Employer Identification Number identifies your business to the IRS, and it is free. You need one if you will hire employees, if the LLC has more than one member, if you elect corporate or S-corporation taxation, or if you owe certain excise taxes. Even a single-member LLC with no employees generally wants one, because banks ask for it to open a business account and because it keeps your Social Security number off vendor paperwork.

The IRS online application issues the number immediately. Applicants without a US taxpayer identification number use Form SS-4 by fax, mail, or phone. Never pay a third-party site — the IRS charges nothing. The full walkthrough is at how to get an EIN.

Step 6: Register With the Department of Revenue

Tennessee's tax layer is where new owners most often get surprised. The Department of Revenue administers three things you are likely to touch. First, sales and use tax, if you sell taxable goods or services — register and collect before your first sale. Second, the business tax, a gross-receipts tax collected through county and municipal business licenses: a standard license applies once gross receipts pass the state threshold, and a lower-cost minimal activity license applies below it.

Third, and most significant for entities, the franchise and excise taxes. The excise tax is 6.5% of net earnings; the franchise tax is 0.25% of net worth with a $100 minimum. Both are reported together on Form FAE 170, due the 15th day of the fourth month after the tax year closes. LLCs are generally subject to both, which is the key structural difference between Tennessee and most pass-through states. Certain family-owned non-corporate entities and obligated-member entities qualify for exemptions, but they must be claimed — they are not automatic.

Step 7: Local Licenses, Permits, and Insurance

Tennessee has no single statewide general business license, but the county and municipal business license tied to the business tax functions as one for most operating companies. Get it from the county clerk where you do business, and from the city as well if you are inside municipal limits. Layered on top are activity-specific approvals — health department permits for food service, alcohol licensing through the Alcoholic Beverage Commission, contractor licensing, and the professional boards that regulate specific occupations. Zoning approval and a certificate of occupancy come from your local planning office. Start with Tennessee business licenses.

Insurance is the piece that is not a filing but belongs in the same checklist. General liability coverage, professional liability if you give advice, commercial auto if vehicles are involved, and workers' compensation once you hire are the standard set. An LLC limits liability for business debts; it does not pay claims.

Step 8: Stay in Good Standing

Tennessee's recurring obligations are the Secretary of State annual report and the Department of Revenue filings. The annual report is due on or before the first day of the fourth month after the close of the LLC's fiscal year — April 1 for a calendar-year company — and carries the same $50 per member, $300 minimum fee as formation. That is a real recurring cost worth budgeting, and it is higher than most states charge.

Keep a compliance calendar with four entries: the annual report date, the FAE 170 deadline, your sales tax filing frequency, and the business license renewal. Keep company funds in a company account, document member decisions, and keep your operating agreement current — commingling and missing records are what let a creditor argue the liability shield should be disregarded. When the business ends, close it deliberately using how to dissolve an LLC in Tennessee rather than letting the registration lapse, because franchise tax obligations continue until the entity is formally terminated.

Frequently Asked Questions

How much does it cost to start a business in Tennessee?

The Tennessee LLC filing fee is $50 per member, with a $300 minimum and a $3,000 maximum, paid to the Secretary of State with the Articles of Organization. A single-member or five-member LLC therefore pays the $300 minimum. A federal EIN is free. The annual report uses the same per-member formula.

What form starts an LLC in Tennessee?

Form SS-4270, the Articles of Organization, filed with the Division of Business Services at the Tennessee Secretary of State. It states the LLC name, the registered agent and office, the principal office address, the number of members, and the management structure. It can be filed online or by mail.

Does Tennessee have a state income tax on business owners?

Tennessee does not impose a general individual income tax on wages or business earnings, so LLC members do not file a personal state income tax return on pass-through profit. The business itself, however, is generally subject to the state franchise and excise taxes, which is where Tennessee collects from entities.

Do Tennessee LLCs pay franchise and excise tax?

Generally yes. Unlike most states, Tennessee subjects LLCs to both the excise tax of 6.5% on net earnings and the franchise tax of 0.25% of net worth with a $100 minimum, reported together on Form FAE 170. Certain family-owned and obligated-member entities can qualify for exemptions.

When is the Tennessee annual report due?

The annual report is due on or before the first day of the fourth month following the close of the LLC's fiscal year, which is April 1 for a calendar-year company. The fee follows the same $50-per-member formula with a $300 minimum. Failing to file can lead to administrative dissolution.

Do I need a business license in Tennessee?

Most likely. Tennessee counties and cities issue business licenses tied to the state business tax, with a standard license issued once gross receipts pass the state threshold and a lower-cost minimal activity license below it. Regulated occupations need separate state licensing on top of that.

Related

• How to form an LLC (national guide)
• How to form an LLC in Tennessee
• How much does a Tennessee LLC cost?
• Tennessee registered agent requirements
• Tennessee annual report
• How to get an EIN
• Business license overview
• S-corp vs LLC
• How to start a business in Georgia (sibling)
• How to start a business in North Carolina (sibling)

Sources

1. Tennessee Secretary of State — What is the required filing fee? ($50 per member; $300 minimum; $3,000 maximum).
2. Tennessee Secretary of State — Division of Business Services (formation and annual report filings).
3. Tennessee Secretary of State — Business Services FAQs (registered agent; annual report timing).
4. Tennessee Department of Revenue — Franchise & Excise Tax (0.25% net worth with $100 minimum; 6.5% net earnings).
5. Tennessee Department of Revenue — Business Tax (county and municipal business licenses).
6. Tennessee Department of Revenue — Sales and Use Tax.
7. Tennessee Department of Revenue — BUS-13, Business Licenses Overview.
8. Tennessee Department of Revenue — BUS-15, Minimal Activity Licenses.
9. Tennessee Department of Revenue — F&E-5, Due Date for Filing Form FAE 170.
10. IRS — Get an Employer Identification Number (free EIN).
11. IRS — Limited Liability Company (LLC).
12. IRS — Business Structures.
13. U.S. Small Business Administration — Register Your Business.
14. Legal Information Institute (Cornell) — Registered Agent.

LegalGlass provides general information for educational purposes and is not a law firm and is not legal advice or a substitute for advice from a licensed attorney or tax professional. Laws, fees, forms, and deadlines change; verify current requirements with the Tennessee Secretary of State and the Tennessee Department of Revenue before acting.