Tennessee corporations: How to form and maintain your Tennessee corporation

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Updated December 20, 2022

Should you form your corporation in Tennessee? We’ve collected the relevant information that will help you make this decision.

Pros

  • No state income tax

  • Reasonable cost of living

  • Views of the beautiful Smoky Mountains

Cons

  • High sales tax

  • Corporate income tax of 6.5%

  • High unemployment insurance taxes

Cost of doing business

  • $105 filing fee / $22.25 annual statement

Privacy

  • Disclosure of owners in original filing

Forming your corporation in Tennessee

The name In order to communicate to the public that your new business is incorporated, its official name will need to end with one of the following signifiers (or a relevant abbreviation): “incorporated”, “Company”, or “corporation”. In addition, it is required that the name of your business is not intentionally misleading to consumers, for any reason. Your company’s new name must also be completely unique, and not deceptively similar to any other organizations name or trademarks. There are also certain restrictions placed on using some commonly used terms in the financial industry. Do a FREE name search now.

Ownership

Board of directors requirements You will need to form an official board of directors when incorporating in Tennessee. Here are the states explicit regulations regarding these directors:

  • Required number of directors

    Tennessee corporations must have at least one director listed in their incorporation documents.

  • Age restrictions

    Directors of corporations located in Tennessee can be of any age.

  • Residence restrictions

    There are no residence restrictions imposed on the directors of C corporations in Tennessee. However, S corporations are only allowed to have directors located in the United States.

  • What information needs to be included in the Charter?

    Tennessee does require the names and addresses of directors to be disclosed in incorporation documents.

Requirements for the charter

The Charter is a document that must be filed during the incorporation process. Here is the information that must be included in this document when filing in Tennessee:

Stock information Tennessee requires the number of initial shares outstanding, and their par value, to be disclosed during the incorporation process. The number of outstanding shares does not affect initial state filing fees.

Officer information The state of Tennessee does not require officer information to be disclosed during the filing process.

Registered agent information All Tennessee corporations must have a registered agent on file, and submit their name and address (which cannot be a PO box). This agent will be required to be accessible during standard business hours, and act as the state’s point of contact with the company. Learn more about registered agents.

Additional Tennessee filing requirements

Many states have steps in the incorporation process that are unique to that state. These can also vary at the municipality or county level as well. Here are the steps required throughout all of Tennessee:

County level filing All corporations must file a copy of the Charter with the county in which their principal office is located, unless said office is out of state.

If your business is a professional practice Professional service corporations are permitted to form under the professional corporation (PC) structure.

Corporate record keeping requirements Corporations are required to keep formal documentation regarding several of their operations. These are the explicit record keeping formalities required by Tennessee:

  • A copy of the corporations charter, bylaws, and their amendments

  • Records that detail the owners and class of all outstanding stock shares

  • The business address and names of all officers and directors

  • Formal, in-depth documentation of all stock related resolutions

  • A permanent set of meeting minutes for all shareholder, director, and committee meetings

  • A copy of all written communications with shareholders within the previous three years

  • A copy of the corporation’s most recent annual report

  • Formal documentation of all director and shareholder decisions, regardless of if they were made during a meeting or not.

Tennessee corporate taxation and fee requirements There are several tax and fee requirements that must be addressed by corporations in Tennessee. They are as follows:

Taxation All states have complex taxation requirements. For more information regarding taxes in Tennessee, it is advised that you visit the state’s official business related website. 

Annual report requirements Corporations in Tennessee are required to file an annual report before the end of the eighth month of the fiscal year. There is a $20 fee related to this process. There is also a franchise tax due each year within 4 ½ months after the closing of each fiscal year. This tax is determined by the physical assets the company has within the state’s borders, but carries a $100 minimum. Learn more about annual reports.

Tax identification numbers Tennessee requires an EIN (employee identification number) for all corporations that will have employees, and most banks will require one to open accounts. Tennessee does require corporations to obtain state tax ID numbers. Learn more about EINs.

Business license requirements

The business licenses and permits required in Tennessee vary wildly depending on the county or municipality in which your new corporation is located. If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.

S corporation election Tennessee does not recognize S corps, and as a result, treats all corporations a C corps for taxation purposes. However, S corps can exist in the state and are treated as such when filing federal taxes.

Need a Tennessee LLC instead? Click here.

Originally published on December 20, 2022, and last edited on December 20, 2022.

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Frequently Asked Questions

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How much does it cost to form a Corporation or LLC?

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How do I open a company bank account?

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What is an Operating Agreement and do I need one?

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