What Is an LLC in Tennessee?
Tennessee’s limited liability company is a hybrid business entity that combines the liability shield of a corporation with the operational flexibility and tax efficiency of a partnership. The Tennessee Revised Limited Liability Company Act (Tenn. Code Ann. § 48-249-101 et seq.) governs the formation, operation, and dissolution of LLCs organized in the state. Members, the owners of the LLC, are generally insulated from personal liability for business debts; their financial exposure typically extends no further than what they have invested.
Tennessee LLCs may operate as either member-managed or manager-managed entities under Tenn. Code Ann. § 48-249-401. The IRS treats a single-member LLC as a disregarded entity and a multi-member LLC as a partnership by default, though either may elect corporate treatment by filing IRS Form 8832. Members have broad latitude to tailor governance through an operating agreement. One critical distinction separates Tennessee from many other states: although Tennessee eliminated its personal income tax (the Hall Income Tax) effective January 1, 2021, every LLC registered with the Secretary of State owes franchise and excise taxes—entity-level obligations that apply regardless of profitability.
Tennessee LLC Name Search
Before filing anything with the Secretary of State, an organizer must confirm that the proposed LLC name satisfies two requirements: it must be distinguishable on the Secretary of State’s records from every other entity on file, and it must carry an approved designator. Tenn. Code Ann. § 48-207-101 mandates that the name contain “Limited Liability Company,” “LLC,” or “L.L.C.” — or an equivalent phrase in another language. Names that are deceptively similar to an existing filing will be rejected when the articles of organization reach the review stage.
Words such as “bank,” “insurance,” and “trust” may trigger additional licensing or approval requirements before the Secretary of State will accept them in an LLC name. The Tennessee Secretary of State Business Entity Search allows organizers to run a preliminary check on name availability, though a clear search result does not guarantee acceptance. Final approval comes only when the formation document is processed.
Name Reservation: Under Tenn. Code Ann. § 48-207-102, an organizer may reserve a proposed name for a 4-month period by filing an Application for Name Reservation (Form SS-9425) and paying a $20 fee. Tennessee does not permit renewal of name reservations, so the organizer should plan to file the articles of organization within that four-month window.
Choosing an LLC Registered Agent in Tennessee
Tennessee requires every domestic and foreign LLC to designate and continuously maintain both a registered agent and a registered office in the state. Tenn. Code Ann. § 48-208-101 defines the agent as the person or entity designated to receive service of process, official correspondence, and legal notices directed at the LLC. Without a registered agent on file, the LLC risks administrative dissolution and may forfeit the right to bring lawsuits in Tennessee courts.
Two categories of agents are eligible under the statute. An individual serving as a registered agent must reside in Tennessee and maintain a physical address within the state. An entity agent, such as a domestic corporation, a domestic LLC, or a foreign entity qualified to do business in Tennessee, must keep an office at the registered address. The registered office itself must be a street address where the agent is available during normal business hours; a P.O. Box, route number, or mail-forwarding address alone will not satisfy the requirement.
The agent must consent to the designation before the organizer names that person or entity in the articles of organization. If the LLC’s registered agent resigns or becomes unable to perform, Tenn. Code Ann. § 48-208-101 obligates the LLC to promptly appoint a replacement and update its filing with the Secretary of State.
LLC Filing Requirements in Tennessee
Filing the articles of organization with the Tennessee Secretary of State brings an LLC into legal existence. Tenn. Code Ann. § 48-249-201 authorizes one or more persons acting as organizers to deliver the formation document for filing. The official form is Articles of Organization – Limited Liability Company (Form SS-4270).
Tenn. Code Ann. § 48-249-202 prescribes what the articles must contain:
- The LLC’s name, including an approved designator
- The street address and zip code of the initial registered office in Tennessee
- The name of the initial registered agent at that address
- A statement of whether the LLC will be member-managed or manager-managed
- The name and address of each organizer
- Whether the LLC’s duration is perpetual or for a specified term
- The number of members as of the filing date
That last item — the member count — directly controls the filing fee. Tennessee charges $50 per member, with a $300 minimum and a $3,000 maximum. A six-member LLC pays the same $300 as a single-member LLC; a seven-member LLC pays $350; the ceiling applies at sixty members. This sliding-scale structure makes Tennessee’s formation cost unusually sensitive to membership size.
- Online: The Tennessee Charities and Business Filing System (TNCaB) accepts electronic filings. Organizers must create an account before submitting the articles.
- By Mail: Mail the completed Form SS-4270 and a check or money order for the filing fee to 312 Rosa L. Parks Avenue, 6th Floor, Snodgrass Tower, Nashville, TN 37243-1102.
- In Person: Walk-in filings are accepted at the 3rd Floor Customer Counter, 312 Rosa L. Parks Avenue, Nashville, TN 37243-1102, Monday through Friday, 8:00 a.m. to 4:30 p.m. Central Time.
The LLC exists from the moment the Secretary of State accepts the filing, unless the organizer has specified a delayed effective date in the articles. A file-stamped copy or electronic confirmation serves as proof of formation.
Annual Report: Tennessee LLCs must file an annual report with the Secretary of State by the first day of the fourth month following the close of the LLC’s fiscal year—April 1 for calendar-year entities. The annual report fee follows the same $50-per-member formula as the formation fee, with the same $300 minimum and $3,000 maximum.
Note: Tennessee also requires that the filed articles of organization be recorded with the Register of Deeds in the county where the LLC’s principal office is located, if that office is in Tennessee.
How Much Does it Cost to Create an LLC in Tennessee?
| Cost | Mandatory or Optional | Amount | When It Applies | Official Source |
| Articles of Organization (Form SS-4270) | Mandatory | $50 per member; $300 minimum; $3,000 maximum | At formation | Tennessee Secretary of State – Business Forms & Fees |
| Name Reservation (Form SS-9425) | Optional | $20 | Before filing, to hold a name for four months | Tennessee Secretary of State – Business Forms & Fees |
| Annual Report | Mandatory | $50 per member; $300 minimum; $3,000 maximum | Due annually by the first day of the fourth month after the fiscal year end | Tennessee Secretary of State – FAQs |
| Certificate of Existence | Optional | $20 | When a third party requires proof of good standing | Tennessee Secretary of State – Business Forms & Fees |
| Certified Copies | Optional | $20 per set | When certified copies of filed documents are requested | Tennessee Secretary of State – Business Forms & Fees |
| Franchise Tax (minimum) | Mandatory | $100 minimum per year | After registration, due on the 15th day of the fourth month after the fiscal year end | Tennessee Department of Revenue – Franchise & Excise Tax |
| Business Tax License | Mandatory (if gross receipts exceed threshold) | $15 per location (county/municipal license fee) | When conducting business within a Tennessee county or municipality | Tennessee Department of Revenue – Business Tax Registration |
| Commercial Registered Agent | Optional | Varies by provider | Ongoing, if the LLC uses a third-party agent service | — |
LLC Operating Agreement in Tennessee
Tennessee does not require an LLC to adopt an operating agreement, but the statute expressly authorizes one and treats it as binding once adopted. Tenn. Code Ann. § 48-249-203 permits all members to enter into an operating agreement “before, after or at the time of filing of articles of organization.” A single-member LLC “may adopt, and, if so, shall be bound by, an operating agreement between the member and the LLC.”
This document is never filed with the Secretary of State. It lives as an internal governance instrument held by the LLC and its members. Yet its practical significance is difficult to overstate. The operating agreement is where members define the allocation of profits and losses, spell out voting rights and management authority, set conditions for transferring membership interests, outline procedures for admitting or removing members, and prescribe the circumstances under which the LLC will dissolve. Without one, the statutory defaults take over.
Those defaults, anchored in Tenn. Code Ann. § 48-249-401, impose a member-managed structure in which each member holds equal management authority. Profit and loss sharing follows the agreed-upon contribution amounts, and membership interests generally cannot be transferred without the remaining members’ consent. An operating agreement allows the members to tailor each of these defaults to match the business’s actual economics and power dynamics. Even a sole owner benefits from having a written operating agreement, because it strengthens the legal separation between personal assets and the LLC’s assets, the very distinction on which limited liability depends.
How to Get an EIN for an LLC in Tennessee
An Employer Identification Number (EIN) is the nine-digit identifier the Internal Revenue Service assigns to business entities for federal tax purposes. Every Tennessee LLC that will hire employees, file excise or employment tax returns, or withhold taxes on payments to a non-resident alien must obtain one. Single-member LLCs with no employees are not technically required to have an EIN, but most financial institutions demand one to open a business bank account, and the IRS recommends obtaining one for any LLC that exists as a separate legal entity.
The IRS issues EINs at no charge. The IRS online EIN application is the fastest route; the number is assigned immediately upon successful completion. The applicant needs a valid Social Security Number or Individual Taxpayer Identification Number, and the LLC must have already been formed with the Tennessee Secretary of State. The online tool operates Monday through Friday, 6:00 a.m. to 1:00 a.m.; Saturday, 6:00 a.m. to 9:00 p.m.; and Sunday, 6:00 p.m. to midnight, all Eastern Time.
Applicants who cannot use the online tool may complete IRS Form SS-4 and submit it by fax (expect processing in approximately 4 business days) or by mail (approximately 4 to 5 weeks). The application requires the name and Taxpayer Identification Number of the LLC’s responsible party—the individual who owns, controls, or exercises ultimate effective control over the entity. For most single-member LLCs, the responsible party is the sole member.
Registering for State Taxes in Tennessee
Tennessee levies no personal income tax, but that fact gives LLC organizers a misleading impression of simplicity. The state imposes two entity-level taxes that apply to virtually every LLC registered through the Secretary of State: the franchise tax and the excise tax. Together, these obligations represent Tennessee’s primary mechanism for taxing business entities.
The franchise tax is calculated at 0.25% of the greater of the LLC’s net worth or the value of its real and tangible property in Tennessee, with a $100 minimum that applies regardless of whether the LLC is actively conducting business. The excise tax is levied at 6.5% of Tennessee taxable income. Both taxes are administered by the Tennessee Department of Revenue and must be registered for, filed, and paid through the Tennessee Taxpayer Access Point (TNTAP).
Tennessee also imposes a business tax, a gross receipts–based levy administered at the state level but tied to local licensing. An LLC with in-state gross receipts above the applicable threshold must register for the business tax through TNTAP and pay a $15 business license fee to the county or municipal clerk in each jurisdiction where it operates.
LLCs that sell tangible personal property or taxable services must register for a sales and use tax permit. Registration is handled electronically through TNTAP’s sales and use tax portal.
| Tax Type | Agency | Registration Method | Rate or Amount |
| Franchise Tax | Tennessee Department of Revenue | TNTAP | 0.25% of net worth; $100 minimum |
| Excise Tax | Tennessee Department of Revenue | TNTAP | 6.5% of taxable income |
| Business Tax | Tennessee Department of Revenue/county or municipal clerk | TNTAP; $15 local license fee | Varies by classification and gross receipts |
| Sales and Use Tax | Tennessee Department of Revenue | TNTAP | State rate plus local rate; varies by jurisdiction |
Note: The $100 minimum franchise tax is assessed every year the LLC remains registered with the Secretary of State, even if the LLC earns no revenue and conducts no business during the tax period.
Registering as an Employer in Tennessee
An LLC that brings on employees in Tennessee triggers a distinct set of registration obligations at both the state and federal levels. Three state-level registrations apply: unemployment insurance, workers’ compensation insurance, and new hire reporting.
The Tennessee Department of Labor and Workforce Development requires every employer to complete an online registration that determines liability for unemployment insurance premiums. Liability attaches when the LLC pays $1,500 or more in total gross wages in any calendar quarter or employs at least one person during twenty different weeks in the current or preceding calendar year. Employers subject to the Federal Unemployment Tax Act (FUTA) with even a single Tennessee employee are also liable.
Tennessee mandates workers’ compensation insurance for employers outside the construction industry once they reach five or more employees, whether full-time or part-time. Employers in the construction industry must carry coverage regardless of headcount, including for business owners. Tennessee does not operate a state workers’ compensation fund; coverage must be obtained through private insurance carriers.
Because Tennessee imposes no personal income tax, employers have no state income tax withholding obligation. Federal withholding for income tax, Social Security, and Medicare still applies to every payroll.
All newly hired and rehired employees must be reported to the Tennessee New Hire Reporting Program within 20 days of their hire date. The program, administered by the Tennessee Department of Human Services, supports the enforcement of child support orders and the detection of fraudulent unemployment claims.
| Obligation | Agency | Registration Method |
| Unemployment Insurance | Tennessee Department of Labor and Workforce Development | Online employer registration |
| Workers’ Compensation Insurance | Private carriers (Tennessee Bureau of Workers’ Compensation oversight) | Coverage requirements and information |
| New Hire Reporting | Tennessee Department of Human Services | Tennessee New Hire Reporting Program |
Federal employer obligations run parallel to these state requirements. The LLC must file IRS Form 941 (Employer’s Quarterly Federal Tax Return), remit FUTA taxes, and complete Form I-9 (Employment Eligibility Verification) for every new hire.