When you form your LLC in Tennessee, you’ll have to pay certain costs to officially register your business with the state.
In addition to formation and ongoing costs, there will be business expenses like using a registered agent service, building a website, getting business insurance, and so on. So, how much does an LLC cost in Tennessee?
In this guide, we break down the costs associated with forming your LLC, from the Tennessee LLC filing fee to LLC upkeep prices and other business expenses.
Cost of Forming an LLC in Tennessee
When forming your LLC, there are a few different costs that you may incur. These include the filing fee, LLC formation service cost, operating agreement draft, and registered agent costs.
Tennessee LLC Filing Fee
To form an LLC, you must file your Articles of Organization with the Tennessee Secretary of State. The filing fee for the Articles of Organization is a minimum of $300 and a maximum of $3,000. Fees are based on the number of members of the LLC. (It’s $50 per person up to $3,000, but the minimum fee is $300 regardless of members.) You will commonly see this fee referred to as the “state fee” or “filing fee.”
If you choose to use an LLC formation service, you will pay the $300+ state fee on top of their service fee. Generally, these service fees start around $29 and increase depending on additional services you purchase.
Recommended ServiceMost people choose to use an LLC formation service to create their LLC. The cost is low and they guarantee that your filing is done correctly. Check out our #1 rated LLC service:
Northwest Registered Agent ($29 + state fees)
Tennessee Registered Agent and Registered Office
Every Tennessee LLC is required to appoint a registered agent. A registered agent is a person or entity you assign to receive tax forms, legal documents, or government correspondence on your LLC’s behalf. Registered agent services can cost around $130 per year or more.
Your registered agent can be:
- A registered agent service (most common)
- Yourself (not recommended)
- Another member of the LLC
- A business attorney
Tennessee LLC Operating Agreement
An operating agreement defines the roles and responsibilities of the members or managers in your LLC and will help prevent and solve any business disputes that may arise later on.
The costs associated with the operating agreement come in the drafting of the document. For single member LLCs and simple multi-member LLCs, most people choose to create the document themselves.
You don’t need to file this document with the Tennessee Secretary of State. Using a free operating agreement template or document builder, that means your total cost would be $0.
Optional Tennessee LLC Formation Costs
Along with the fees associated with forming an LLC, there are several optional LLC formation costs that you may encounter.
- Reserve a Name for Your LLC – Perform a business entity name search before registering a name of your LLC to ensure it’s unique. The name reservation fee of $20 is necessary only if you are planning to wait between registering and opening an LLC.
- Doing Business As (DBA) Name – If you’re planning to conduct business under a different name than the one registered, the filing fee for a DBA or assumed name is $20 in Tennessee.
- Certified Document Copies – You can order certified copies of your Tennessee business documents to serve as physical proof of LLC’s information. The fee for requesting a certified copy is $20 per set of documents.
- Certificate of Existence – Sometimes called a Certificate of Good Standing, this document states that your business is legally allowed to conduct affairs in the state. You may need it for a banker or other lender. The fee for requesting a Certificate of Existence is $20.
Tennessee LLC Cost and Fees Over Time
There are a few things you need to address to keep your LLC in good standing with the state year after year. Each of these comes with costs and fees.
Annual LLC Fee Tennessee
Each year, your Tennessee LLC must submit an annual report and file for franchise and excise taxes. The franchise tax rate is .25% of either the LLC’s net worth or the book value of its real and tangible assets. The excise tax is 6.5% of the LLC’s net earnings or income for the tax year.
The fee for filing the annual report is a minimum of $300 and a maximum of $3,000, which is due the first day of the fourth month following the close of the LLC’s fiscal year. So, if you filed in December, it would be due on April 1. Franchise and excise taxes are due on April 15.
Note:Tennessee does make exceptions for franchise and excise taxes (e.g., for farmers, personal residences, etc). Check out our Tennessee LLC Annual Report article to learn more about filing.
Registered Agent Fee
If you use a professional registered agent service, you will pay their fee annually. Pricing will depend on the service provider that you use, but usually costs around $130/year. Using a registered agent service will save you time and the hassle of handling important legal documents and filings for the long term.
If you act as your own registered agent there are no maintenance fees. However, for privacy and compliance purposes, we don’t recommend being your own registered agent.
General Costs of Running a Business
Operating a business will obviously come with more than just LLC costs. These are a few of the expenses that you may run into.
Business Bank Account
An LLC separates your personal assets from your business assets. This separation is called the corporate veil. That corporate veil ensures that if your business is sued or incurs debts, your personal assets will be protected from any liabilities.
Commingling (mixing) your personal bank account with your business can pierce your LLC’s corporate veil, which means you are no longer protected by the separated entity of your LLC.
Using a separate bank account to accept payments and pay business expenses is the only way to prevent commingling funds and piercing the corporate veil.
Business Permits and Licenses
Depending on the type of business you operate, your business may need the proper permits and licenses to legally operate in Tennessee.
Alongside the permits required, your business may require industry-specific licenses to operate legally. Examples include licenses like the Tennessee real estate license, Tennessee insurance license, Tennessee adjuster license, and so on.
Every business needs a website. There’s no better way to get in front of your customers, build your brand, and grow your business.
Fortunately, the cost and difficulty of creating a business website have come down over the years. Websites are now simple to build and cheap to keep up.
Having the proper insurance coverage can potentially save your entire business if there is a loss, accident, or lawsuit.
A few of the most common business insurance policies include:
- General liability insurance – Protects against claims of personal injury, physical injury, property damage, and more. This is the most common of all business insurance policies. Learn more about general liability insurance.
- Professional Liability Insurance – Protects against claims of inaccurate or negligent work. It’s most common in the “professional” space where businesses offer services or advice to other businesses or consumers. Learn more about professional liability insurance.
- Commercial Workers’ Compensation Insurance – This type of insurance protects your employees from on-the-job injuries or illnesses. This coverage is required if you have one or more employees. Learn more about Workers’ Compensation insurance.
The cost of business insurance varies widely based on business type, size, location, and other factors. Getting a quote is the only way to understand the actual cost of insurance for your LLC.
LLC Cost in Tennessee FAQ
Do you have to pay ongoing fees for an LLC every year?
Tennessee requires LLCs to file an Annual Report for a minimum cost of $300. You must also pay Franchise and Excise taxes based on the LLC’s worth and net earnings.
What’s the cheapest way to form an LLC?
The least expensive way to form an LLC is to file it yourself. The best LLC formation services start around $29. You’ll need to pay the state filing fee in either scenario. Check out our How to Start an LLC in Tennessee guide to learn how to form on your own.
Can you start a Tennessee LLC for free?
No. All applicants must pay the state filing fee to start a Tennessee LLC. The filing fee starts at $300, with a maximum of $3,000.
How much does a registered agent cost?
Do I need to pay a franchise tax for my Tennessee LLC?
Yes. The franchise tax rate is .25% of either the LLC’s net worth or the book value of its real and tangible assets. All franchise tax fees must be submitted electronically through the state’s Department of Revenue website.
How much does an LLC formation service provider cost?
It depends on the LLC formation company you choose. We recommend Northwest Registered Agent, which starts at $29, plus the $300+ state fee, and includes the first year of registered agent services for free.
Information on this page is not to be considered legal or tax advice. Data was gathered from a multitude of sources and most recently updated in September 2022.
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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