How to Start a C-Corp in Tennessee (Quick Answer)
To start a C-corp in Tennessee, file a corporate charter with the Tennessee Secretary of State, name a registered agent, and pay the $100 filing fee. Once the state accepts it, your corporation legally exists.
After that, you adopt bylaws, appoint directors and officers, issue stock, and get an EIN from the IRS. Tennessee has no personal income tax, but corporations still pay the Franchise and Excise tax on the business.
| Filing document | Corporate charter (Articles of Incorporation) |
| Where to file | Tennessee Secretary of State |
| Filing fee | $100 |
| Registered agent | Required, with a physical Tennessee street address |
| EIN | Required, free from the IRS (Form SS-4 by phone, fax, or mail if you have no SSN or ITIN) |
| Annual report | $20 for a corporation, due the first day of the fourth month after your fiscal year ends (April 1 for a calendar year) |
| Franchise and Excise tax | 6.5% excise on net earnings, plus a 0.25% franchise tax on net worth with a $100 minimum |
| Foreign owner (25% or more) | File Form 5472 with Form 1120 every year, or face a $25,000 minimum penalty |
First-year cost: $100 to file the charter, plus a registered-agent service if you use one, commonly $50 to $150 a year. Your first annual report and Franchise and Excise return follow after your first fiscal year.
Tennessee has no personal income tax, so founders often assume there is no tax on the business. That is not the case for corporations.
Every Tennessee corporation pays the Franchise and Excise tax: a 6.5% excise tax on net earnings, which works like a corporate income tax, plus a 0.25% franchise tax on net worth with a $100 minimum. The annual report itself is a low $20.
TL;DR
- No personal income tax, but corporations pay Franchise and Excise: a 6.5% excise on net earnings plus a 0.25% franchise tax on net worth ($100 minimum).
- Step 1, name: pick a unique name with a corporate designator (Inc., Incorporated, Corporation, or Corp.) and check it with the Secretary of State.
- Step 2, registered agent: name one with a physical Tennessee street address.
- Step 3, corporate charter: file with the Secretary of State for $100.
- Step 4, bylaws: adopt internal bylaws and keep them with your records.
- Step 5, directors and officers: appoint the board and officers and hold an organizational meeting.
- Step 6, issue stock: authorize and issue shares, keep a stock ledger, and file the 83(b) election within 30 days if your shares vest.
- Step 7, EIN: get a free EIN from the IRS, by Form SS-4 if you have no SSN or ITIN.
- Foreign owner (25% or more): file Form 5472 with Form 1120 every year, or risk a $25,000 penalty.
- Ongoing: a $20 annual report by April 1, plus the Franchise and Excise tax (6.5% and 0.25%, $100 minimum).
Why Form a C-Corp in Tennessee?
Tennessee offers no personal income tax, low formation costs, and growing metro markets in Nashville, Memphis, and Knoxville.
- No personal income tax, which owners feel on the salary they take out.
- A low $100 charter fee and a $20 annual report.
- Growing markets in Nashville and across the state.
Weigh the business tax first. If you plan to raise venture capital, investors will most likely want a Delaware C-corp. Tennessee's Franchise and Excise tax applies to corporations even though there is no personal income tax, so factor it in.
Step 1: Choose and Reserve Your Corporate Name
- Include a corporate designator such as "Inc.", "Incorporated", "Corporation", or "Corp."
- Search the Secretary of State's business database to confirm the name is available and different from existing entities.
- Tennessee lets you reserve a name for four months for a fee if you are not ready to file.
Step 2: Appoint a Tennessee Registered Agent
Every Tennessee corporation must name a registered agent with a physical Tennessee street address, available during business hours to receive legal and state documents.
- The agent can be a person or a company, but needs a real Tennessee address, not a PO box.
- The address is public record, so many owners use a commercial service.
- A commercial agent commonly costs $50 to $150 a year.
Step 3: File Your Corporate Charter
The corporate charter, Tennessee's Articles of Incorporation, is the filing that legally creates your corporation. You file it with the Tennessee Secretary of State.
- It lists the corporate name, registered agent, principal office, and the number of shares the corporation is authorized to issue.
- The fee is $100, a flat fee that does not change with your share count.
- Once the state accepts it, your corporation exists and its compliance calendar begins.
Step 4: Adopt Corporate Bylaws
Bylaws are the internal rulebook for how the corporation is run. They are not filed with the state, but a corporation is expected to have them, and banks and investors often ask to see them.
- They set out how directors and officers are elected, how meetings and votes work, and how shares are handled.
- They stay with your records, not with the Secretary of State.
- Skipping them can weaken the separation between you and the corporation that liability protection depends on.
Step 5: Appoint Directors and Hold the Organizational Meeting
A corporation is run by a board of directors, who appoint the officers that handle day-to-day work. Right after formation, the incorporator or initial directors hold an organizational meeting, or sign a written consent in place of one.
- Appoint the initial board and elect officers (usually at least a president, secretary, and treasurer; one person can hold several roles).
- Adopt the bylaws and authorize the issuance of stock.
- Keep signed minutes or the written consent with your records.
Step 6: Authorize and Issue Stock
Issuing stock is how founders get their ownership, and it is easy to rush. The board authorizes shares, then the corporation issues them to the founders and any early shareholders.
- Issue shares to each founder and record what they paid (cash, property, or services).
- Keep a stock ledger, a running record of who owns how many shares.
- Deliver stock certificates or record the issuance electronically, per your bylaws.
The 83(b) election, and its 30-day deadline: if your founder shares vest over time, you generally have 30 days from the grant date to file an 83(b) election with the IRS.
It lets you be taxed on the small value at grant instead of the higher value as the stock vests. The 30-day window cannot be extended, and missing it can be expensive.
Step 7: Get an EIN, Even Without an SSN
An EIN is your corporation's federal tax ID, needed to file taxes, run payroll, and open a bank account. It is free from the IRS.
- With an SSN or ITIN, apply online and get the EIN in minutes.
- Without an SSN or ITIN, apply on Form SS-4 by phone, fax, or mail.
- The EIN is always free; you never pay the IRS for one.
Open a US Business Bank Account
Once you have the EIN, open a dedicated business bank account before money moves through the corporation.
- Keeping corporate and personal funds separate helps protect the liability shield; commingling them is a common reason courts pierce it.
- Banks usually ask for the filed charter, the EIN letter, and often the bylaws or a board resolution.
- A separate account also makes bookkeeping and the corporate tax return simpler.
If Your Tennessee C-Corp Is Foreign-Owned
A Tennessee C-corp that is 25% or more owned by a non-US person has an extra federal filing that many international founders miss.
- The corporation files Form 5472 with its annual Form 1120 to report transactions with the foreign owner, such as money put in or paid out for services.
- It is required every year there are reportable transactions, even with little or no profit.
- The penalty is steep: a missed or late Form 5472 starts at $25,000 per form, per year.
Handle Tennessee's Ongoing Compliance
Two obligations run every year: the annual report and the Franchise and Excise tax.
The $20 Annual Report (Due April 1)
- Every Tennessee corporation files an annual report with the Secretary of State for $20, a flat fee for corporations.
- It is due the first day of the fourth month after your fiscal year ends, which is April 1 for a calendar-year corporation.
- Missing it can put the corporation out of good standing and eventually lead to administrative dissolution.
The Franchise and Excise Tax
- The excise tax is 6.5% of net earnings, which functions like a corporate income tax.
- The franchise tax is 0.25% of net worth, with a $100 minimum, so you owe at least $100 even in a year with no profit.
- Both are filed together on Form FAE170 with the Tennessee Department of Revenue, and federally the corporation files Form 1120 and pays 21% corporate tax.
How Much Does It Cost to Start a C-Corp in Tennessee?
| What you pay | Amount | When |
|---|---|---|
| Corporate charter filing | $100 | One time, at formation |
| Registered-agent service (optional) | ~$50 to $150 a year | Yearly, if you use one |
| Annual report | $20 | Yearly, by April 1 |
| Franchise and Excise tax | 6.5% of net earnings plus 0.25% of net worth ($100 minimum) | Yearly |
| Federal corporate tax | 21% of profits | Yearly, with Form 1120 |
How Long Does It Take to Start a C-Corp in Tennessee?
- Online filings with the Secretary of State are usually processed within a few business days.
- The EIN follows: minutes online with an SSN or ITIN, or same day to several weeks by Form SS-4 without one.
- Bylaws, the organizational meeting, and issuing stock happen right after the state approves the filing.
Common Mistakes to Avoid
- Assuming no income tax means no business tax. Tennessee has no personal income tax, but corporations owe the Franchise and Excise tax.
- Forgetting the $100 minimum franchise tax, owed even in a year with no profit.
- Missing the April 1 annual report, which risks good standing.
- Missing the 30-day 83(b) deadline on vesting founder stock.
- Overlooking Form 5472 if the corporation is 25% or more foreign-owned.
How FinStackk Helps
FinStackk is an accounting and tax compliance platform for U.S. businesses, taking you from incorporation through ongoing accounting, tax, and compliance in one place.
We handle Tennessee C-corp formation, from the corporate charter to the EIN, through Fin-Start, including the Tennessee registered agent.
Once the corporation exists, Fin-Tax keeps the federal Form 1120 deadline and the Tennessee Franchise and Excise tax on a proactive calendar. Complyy tracks the $20 annual report due April 1 and your registered-agent renewal. Book a free demo to see them in action.
FAQ
Does a Tennessee C-corp pay income tax?
Tennessee has no personal income tax, but corporations pay the Franchise and Excise tax. The excise portion is 6.5% of net earnings, which works like a corporate income tax, and the franchise portion is 0.25% of net worth with a $100 minimum. That is on top of the 21% federal corporate tax on Form 1120.
How much does it cost to start a C-corp in Tennessee?
It costs $100 to file the corporate charter with the Secretary of State, a flat fee. Add a registered-agent service if you use one. Going forward, the main recurring items are the $20 annual report due April 1 and the Franchise and Excise tax, which has a $100 minimum franchise portion.
When is the Tennessee annual report due?
The annual report is due the first day of the fourth month after your fiscal year ends, which is April 1 for a calendar-year corporation, and costs $20. It is filed with the Secretary of State. Missing it can put the corporation out of good standing and eventually lead to administrative dissolution.
Is it better to form a C-corp or an LLC in Tennessee?
Both Tennessee corporations and LLCs pay the Franchise and Excise tax, but the corporation's $20 annual report is much cheaper than the LLC's, which starts at $300. A C-corp suits founders who plan to raise venture capital or keep earnings in the business. A C-corp is taxed twice at the federal level, once at the corporate level and again on dividends.
Should I form my C-corp in Tennessee or Delaware?
If you plan to raise venture capital, Delaware is what investors expect. If you will operate in Tennessee and not raise venture money, forming in Tennessee avoids registering and paying in two states, since a Delaware corporation doing business in Tennessee still has to register and pay the Franchise and Excise tax here. Choose based on where you operate and whether you will raise money.
Can a non-US resident start a Tennessee C-corp?
Yes. Tennessee sets no citizenship or residency requirement to own a corporation. You will need a Tennessee registered agent and an EIN, which you apply for on Form SS-4 by phone, fax, or mail without an SSN.
If a non-US person owns 25% or more, the corporation also files Form 5472 with its Form 1120 every year, with a $25,000 minimum penalty for missing it.