How to Start a Corporation in Tennessee
To start a Tennessee corporation, you must file a For-Profit Corporation Charter with the Secretary of State and pay a $100 filing fee. While this filing creates your business, it’s really just the first step to launching your Tennessee corporation. The complete steps to incorporating in Tennessee are as follows:
- File a Tennessee For-Profit Corporation Charter
- Pay the Tennessee Secretary of State $100
- Wait to receive your charter’s approval
- Get a federal tax ID (EIN) for the corporation
- Create Tennessee corporate bylaws
- Take these documents to the bank and get a Tennessee corporate bank account
- Register with the Tennessee Department of Revenue
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Tennessee For-Profit Corporation Charter free download. When you're done filling out the form, submit it to your state.
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3 Day Tennessee Corporation For $330 Total
How to File a Tennessee For-Profit Corporation CharterTo form a Tennessee corporation, you file the For-Profit Corporation Charter in the following steps:
What is the Cost of a Tennessee Corporation?
$100. If you file online and pay with a credit or debit card, there’s also a 2.35% service fee.
Hire Northwest to form your Tennessee corporation, and your total out-the-door cost is $330. This includes state fees, a full year of registered agent service, and loads of forms and tools to help get your business up and running.
How Much Does a Corporation in Tennessee Cost Each Year?
At least $20. This is the fee for an Annual Report with no changes in information.Get Started
What is a Tennessee Annual Report?
Your Tennessee Annual Report is a form you file with the Secretary of State each year to confirm your corporation’s contact and ownership information. The report is $20 to file (plus a 2.35% fee if you pay online with a debit or credit card). However, if you update any information (such as your registered agent or business address), you’ll have to fork over an extra $20. Forget to file? You’ll get a delinquency notice giving you 60 days to file and pay up—or else your corporation will be dissolved or revoked.
Northwest can help your Tennessee corporation avoid these problems and stay in compliance. As your registered agent, we’ll send you report reminders to help you remember. Or, just hire us to do it for you. For $100 plus state fees, we’ll submit your Tennessee Annual Report on your behalf.Get Started
What are the Taxes for a Tennessee Corporation?
Tennessee doesn’t single out corporations with a typical corporate income tax. Instead, ALL for-profit businesses registered with the state (corporations, LLCs, LLPs, etc.) pay a pair of taxes: an excise tax and a franchise tax.
The Tennessee Excise Tax is a 6.5% tax on net earnings. The Tennessee Franchise Tax is tax on either your net worth or your real and tangible property in the state (whichever results in a higher tax). The rate is $0.25 per $100, and there’s a minimum tax of $100.
If your corporation has over $10K in gross receipts, there’s yet one more unusual tax. The Business Tax is a pair of city and state tax returns you file with the Tennessee Department of Revenue. Rates vary, but the minimum tax is $22.
The state sales tax rate is 7%. However, local areas can tack on additional sales taxes as well. The four largest cities in Tennessee (Memphis, Nashville, Knoxville and Chattanooga) all have a total sales tax rate of 9.25%. In cities like Murfreesboro and Franklin, the rate hits 9.75%.
Is a Registered Agent Required for a Tennessee Corporation?
Yes, your corporation needs a Tennessee registered agent. You could try to save a few bucks by being your own registered agent—after all, you don’t get rich wasting money. However, the headache you gain and the privacy you lose are something to carefully consider. As your own registered agent, you’d have to publicly list a physical address that would become part of the permanent record of your Tennessee corporation. Unfortunately, publicly-listed addresses are common targets for data-sellers and spammers. You would also have to be regularly available at the registered address in case a process server drops by. Missing legal notifications could cost your corporation much more than a registered agent fee.
A wiser investment? Hire Northwest. We’ll list our address throughout your Corporation Charter. We scan and send you your notices the same day, so you can stay on top of your business—even if you’re on top of Mount LeConte.Get Started
Tennessee Corporation Versus Tennessee LLC:
When it comes to state fees, corporations are MUCH cheaper. To form a corporation is $100 and the Annual Report is only $20. LLCs pay a MINIMUM of $300 for each of these filings.
Corporations have other advantages as well—stocks give them flexibility for raising capital and attracting investors. Their formal structure is familiar and can make organizing a large business much easier. Corporations have also been around for a long time, giving them years of court precedents that can serve as guidance for your own business decisions.
LLCs, on the other hand, tend to be simpler overall and easier to operate, especially for new business owners. LLCs also have a wider range of tax election options. While Tennessee taxes for corporations and LLCs end up the same, this could be a benefit on federal returns. Considering an LLC? We can help here too. Here’s information on starting an LLC in Tennessee.
Do I Need a Tax ID Number (EIN) for a Tennessee Corporation?
Corporations have to get an EIN for their federal tax filings. You’ll also be asked for your EIN when you apply for your local business license or register with the Tennessee Department of Revenue for state taxes.
To get an EIN, you can fill out the IRS’s free application. If you’d rather not slog through yet more paperwork, you can hire us to get your EIN for you. Just tick the box that says “EIN service” during checkout when you sign up for our Tennessee incorporation service.
Does a Tennessee Corporation Need a Business License?
Tennessee itself doesn’t require a general business license, but you will need to register for taxes with the Tennessee Department of Revenue. You’ll also need a local business license. Most Tennessee counties require a business license (and cities with the City Business Tax require a city license as well).
For instance, if you engage in business in Shelby or Davidson County, you’ll need to submit a business license application to the county clerk. And if you’re in a city like Memphis, you’ll also need a city license.
Tennessee For-Profit Corporation Charter Requirements
Your name must include “Corporation,” “Incorporated,” “Company,” or an abbreviation for one of these words. Tip: Most corporations keep it brief with “Corp” or “Inc.”
List either an individual Tennessee resident (like yourself) or a business (like Northwest). Tip: Personally, we’re fans of Northwest.
This is the Tennessee street address where your registered agent with accept legal notifications. Like all the information in your charter, this address will become part of the permanent public record of your corporation. Tip: Hire us, and our Tennessee address will go here.
Fiscal Year Close Month
List the month that your business year ends. Tip: Most corporations operate on a calendar year and put “December.”
Want your business to continue indefinitely? Choose “Perpetual.” Prefer to put a self-destruct timer on your corporation? List the date you want your business to end. Tip: Most corporations are perpetual.
When do you want your Tennessee corporation to begin? If you want it to start right away, skip this section. If you want to start on a specific date, you can list an effective date up to 90 days in the future. Tip: Most businesses skip this section.
List the number of shares you wish to create. You must create at least one share.
This street address is the official address of your business and where you’ll receive mail (besides legal notifications—those go to your registered agent). Tip: Want all your mail to go to the same place? When you hire Northwest as your registered agent, you can use our Tennessee address as your principal office address.
Incorporators are the people who sign your charter. You must have at least one incorporator, and incorporators must include their names and addresses. Your incorporator can be a director, officer, or just someone you authorize to submit your charter. Tip: We’ll be your incorporator when you hire us to form your Tennessee corporation.
A professional corporation provides a state-licensed service (think doctors and lawyers). If you’re creating a professional corporation, you’ll need to tick the box in Section 12 and list your professional service. Tip: Most corporations are not professional corporations.