Forming a Corporation in Tennessee is Easy
You can start a corporation in Tennessee by filing the Domestic For-Profit Corporation Charter with the Secretary of State. In this guide, we will show you how to form a corporation in Tennessee yourself.
If you’d like to know more about hiring a professional service to set up a corporation for you, take a look at our Top 7 Business Formation Services review.
Follow our step-by-step How to Start a Corporation in Tennessee guide to get started today.
Need help choosing a business structure? Visit our LLC vs Corporation guide to find out which business structure is best for your small business.
Step 1: Name Your Tennessee Corporation
Choosing a business name is the first step in starting a corporation. You must choose a unique name that complies with Tennessee corporation naming requirements.
1. Tennessee naming guidelines:
- Your name must contain the word “corporation,” “company,” “incorporated,” or an abbreviation of one of these terms.
- Only corporations registered prior to May 29, 1989, can use the word “limited” or its abbreviation “ltd.,” and they can no longer use those terms if they amend their name.
- Your name cannot falsely imply that your corporation is organized as, affiliated with, or sponsored by any fraternal, veterans', service, religious, charitable, or professional organization.
- Your name must be distinguishable from any existing business in the state. This includes Tennessee reserved names.
- Your name cannot include words that could confuse your corporation with a government agency (FBI, Treasury, State Department, etc.).
- Your name cannot imply that the corporation is organized for any unlawful purpose or one not outlined in its charter.
Read the Tennessee state statute regarding corporation naming guidelines for more information.
2. Is my corporation name available in Tennessee?
Your Tennessee corporation name must be unique and distinguishable from other business names in Tennessee. Use the Tennessee Secretary of State’s Business Search Portal to determine if your desired business name is available.
For more information about Tennessee corporation name searches, visit our How to Name a Business guide and select Tennessee from the drop-down menu.
3. Is the URL available?
Before you register your Tennessee corporation, you should see if a good URL is available for your desired business name. Even if you aren’t planning on creating a business website now, we advise buying a web domain right away to prevent other businesses from taking it.
We recommend using GoDaddy to search for your options.
FAQ: Naming a Tennessee Corporation
How do I name my business?
Naming your business involves several variables. From naming guidelines to brainstorming your brand, we have it covered.
To learn more, visit our How to Name a Business guide and select Tennessee from the drop-down menu.
Do I need to get a DBA (Doing Business As) or trade name for my business?
You will need to set up a DBA to operate under a name other than your legal name. Some states also require certain business types to file a DBA.
To learn more about state DBA guidelines, visit our How to File a DBA guide and select Tennessee from the drop-down menu.
Step 2: Choose a Tennessee Registered Agent
You must appoint a Tennessee registered agent when you register your corporation with the Secretary of State.
What is a Registered Agent? A registered agent is an individual or entity that has been appointed by an LLC or corporation to receive service of process, government correspondence, and compliance documents on behalf of a business. To learn more, read our What is a Registered Agent guide.
Who Can Be a Registered Agent? Your registered agent can be an individual, business entity, or professional registered agent service. Any member of the corporation or individual can serve as your Tennessee registered agent as long as the person:
- is 18 years or older
- has a physical address in the state where business activity is conducted
- is available (in person) during normal business hours
Designating someone else to serve as a registered agent for your LLC or corporation has its benefits. To learn more about hiring a registered agent service for your corporation, read our Should I Use a Registered Agent Service guide.
For more about Tennessee Registered Agents, read our full guide.
FAQ: Choosing a Tennessee Registered Agent
Is a registered agent service worth it?
Using a professional registered agent service is an affordable way to manage government filings for your Tennessee corporation. For most businesses, the advantages of using a professional service significantly outweigh the annual costs.
For more information on how to set up a registered agent in your state, visit our What is a Registered Agent guide and choose Tennessee from the drop-down menu.
What happens if I don’t have a registered agent?
If you don't have a registered agent, there are negative consequences in most states. Your business could be penalized with lawsuits and fines, lose good standing with the state, and could eventually be dissolved.
Step 3: Hold an Organizational Meeting
Before you officially file the Domestic For-Profit Corporation Charter in Step 4, you will need to hold an organizational meeting to complete the following tasks:
- Fill out and execute the Domestic For-Profit Corporation Charter
- Create and approve bylaws
- Select your initial director(s)
- Determine your share structure
- Execute an Incorporator’s Statement
Create and Approve Corporate Bylaws
Bylaws are the rules that determine how your organization will be governed and run. You can think about the bylaws as a constitution for your corporation. It makes the rules and priorities clear for everyone involved.
A corporation’s bylaws will supplement any rules set forth by the federal government or the state.
In your bylaws, be sure to include:
- How the corporation will be governed, including the role of directors and officers
- How meetings are held, voting procedures, electing officers or directors
- How records will be kept and managed
- How disputes will be handled
- How bylaws will be added/amended in the future
- The date of the annual shareholder meeting
- How to negotiate contracts
- Fiduciary duties to the corporation (i.e. acting in the best interests of the corporation)
- What constitutes a quorum for voting purposes
What is a Quorum? A Quorum is the minimum number of members that must be present at a meeting to make the proceedings of the meeting valid, including any of the votes held therein.
Appoint Initial Directors
You must appoint at least one director who will oversee your Tennessee corporation until the first shareholder meeting.
A corporate director is in charge of the adoption, amendment, and repeal of operational bylaws as well as the election, supervision, and removal of officers.
After forming the corporation, the incorporator(s) — or initial director(s), if named on the formation documents — should call an organizational meeting. During this initial meeting, either the incorporator(s) will elect the board of directors or the initial director(s) will appoint the officers.
Choose a Share Structure and Strategy
A share of stock is the unit of ownership of a corporation. Each share of stock represents a percentage of ownership of the company. For example, if a corporation issues one share of stock the shareholder (stock owner) would then own 100% of the corporation.
Shares can be structured into classes. Each class, termed a share class, holds different rights and privileges. You can have multiple classes and each class can hold any number of shares.
The Domestic For-Profit Corporation Charter form issued by the Tennessee Secretary of State may only be used to start a corporation with one share class. If the corporation needs a multiple share class structure, you must attach an additional provision to your Domestic For-Profit Corporation Charter.
Authorized Shares: the number of shares the corporation is allowed to issue.
Issued Shares: the total number of shares actually issued to shareholders.
Share Class: a group of shares that has a unique set of rights and privileges.
NOTE: We recommend starting with a high number of authorized shares. Many attorneys suggest 10 million. By starting with a high number, you have the flexibility to issue shares as needed without paying legal fees to increase your initial authorized shares amount.
Create and Execute an Incorporator’s Statement
The incorporator(s) should sign an Incorporator’s Statement with complete names and addresses of each initial director and store it in the corporate records book.
This document names the initial director(s) that will serve until the board of directors is elected during the first shareholder meeting. It should be stored with the rest of your corporate records.
FAQ: Initial Directors & Share Structure
What is a Corporate Director?
A corporate director is in charge of the adoption, amendment, and repeal of operational bylaws as well as the election, supervision, and removal of officers.
What is a Share Class?
A share class is a group of shares that has a unique set of rights and privileges compared to other shares of the same corporation.
Step 4: File the Tennessee Domestic For-Profit Corporation Charter
You will need to file Form SS-4417 - Domestic For-Profit Corporation Charter to set up a corporation in Tennessee. The Domestic For-Profit Corporation Charter is the document that officially creates your Tennessee corporation. You can file it by mail, in person, or online with the Tennessee Secretary of State. The filing cost is $100.
This document will cover the basics of your corporation, including:
- Corporate name and address
- Fiscal year close month
- Effective date and corporation duration
- Corporate registered agent name and address
- The number of authorized shares the corporation is allowed to issue
- Incorporator(s) name(s) and address(es)
The Tennessee Domestic For-Profit Corporation Charter form issued by the Secretary of State may only be used to start a corporation with one share class. If the corporation needs a multiple share class structure, you must attach an additional provision to your Domestic For-Profit Corporation Charter.
OPTION 1: File Online With Tennessee Business Services Online
- OR -
OPTION 2: File Form SS-4417 by Mail or In Person
Filing Cost: $100, payable to the Tennessee Secretary of State.
Secretary of State Business Services Division
6th FL – Snodgrass Tower
ATTN: Corporate Filing
312 Rosa L. Parks Ave.
Nashville, TN 37243
FAQ: Filing the Tennessee Domestic For-Profit Corporation Charter
What is an S corporation?
An S corporation is a tax designation that can be used by corporations and LLCs alike. S corporations are taxed as pass-through entities. This means that S corps do not pay federal taxes on their business income. Instead, the profits of the business “pass-through” to the owners of the S corp, who are also known as shareholders.
Read our What is an S Corporation article to learn more.
What is a C corporation?
A C corporation is the default structure of an incorporated company. It’s a separate legal entity from its owners with a basic operational structure consisting of shareholders, officers, directors, and employees.
Read our What is a C Corp article to learn more.
How many authorized shares should my corporation list?
New corporations should list a high number of authorized shares on their Tennessee Domestic For-Profit Corporation Charter. Most legal and business professionals recommend 10 million shares be authorized when a corporation is formed.
What is an authorized share vs an issued share?
Authorized shares are the number of shares that a corporation is allowed to issue. This number is initially set by the incorporator on the corporation’s formation documents and can be increased later by going through a legal process. Issued shares are the shares that have actually been distributed to shareholders.
Step 5: Get an EIN for Your Tennessee Corporation
What is an EIN? An Employer Identification Number (EIN), or Federal Tax Identification Number (FTIN), is used by the federal government to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
How do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.
Considering Using an Incorporation Service?
We reviewed and ranked the top 7 incorporation services.
Find out which is right for your business.
How to Run a Tennessee Corporation
It is very important to adhere to the formalities of running a corporation. In order to protect your personal assets, and not allow creditors or municipalities to pierce your corporate veil, you must:
- Maintain up-to-date bylaws
- Set up a corporate records book
- Hold required annual meetings
- Give notice of meetings when applicable
- Keep accurate meeting minutes
Maintain Your Tennessee Corporation Bylaws
You must maintain up-to-date bylaws to protect your corporate veil.
If you want to amend a section or article of your corporation’s bylaws, you must call a special meeting with the board of directors. During this meeting, a copy of your proposed changes should be distributed to the board members. Depending on your bylaw structure, either a majority vote or minimum vote will be required to pass the amendment.
After the first meeting, notices must be sent to the corporation’s shareholders. A second meeting will need to be held with all voting parties to either approve or disapprove your proposed amendments.
Set up a Corporate Records Book
Think of this as the hard-copy record book where all critical corporate documents are kept, like your Tennessee Domestic For-Profit Corporation Charter, bylaws, meeting minutes, stock certificate ledger, stock transfer documents, etc.
You should keep the corporate records book at your principal location. Corporate records book kits can be purchased online, or you can use a large generic binder to store your records.
Hold Periodic Board Meetings and Record Minutes
You must hold regular corporate meetings to maintain your business's management structure.
Annual Shareholder Meeting
Unless directors are elected by written consent, corporations in Tennessee must hold an annual shareholder meeting. The first annual shareholder meeting should occur soon after formation. During this meeting, the shareholders elect the board of directors. Your corporate bylaws should note the date of your annual shareholder meeting.
Corporations might also need to conduct “special” board of director’s meetings. These meetings are called to discuss important business matters that will affect the corporation. Your state may have unique meeting notice requirements for special meetings.
Notice of Meetings
If your corporation has more than one shareholder, you will need to provide formal notice of meetings to owners (shareholders), employees, and officers before the meeting occurs. The notice must provide the following information:
- Whether the meeting is a regular or special meeting
- Where the meeting will be held
- When the meeting will occur
When a meeting must be held at the last minute, without formal notice of the meeting, a waiver of notice must be signed by all eligible people stating that they are giving up the right to receive formal notice as laid out in the bylaws and formation documents.
Meeting minutes are legally required in Tennessee. Well-recorded minutes are indispensable during disputes and court actions.
For single-shareholder corporations (common for small business owners), minutes generally only need to record the following:
- The date of the meeting
- A note that it was a joint meeting of the shareholders and board of directors
- When the next election of the board of directors will meet if that date is part of your corporate bylaws
Several companies offer corporate minutes templates. To learn more, read our review of the Best Corporate Meeting Minutes Templates.
Is a Corporation Right For You?
Taxes, Annual Reports, & Licensing
Tennessee State Corporation Tax Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
Tennessee Sales Tax
If you are selling a physical product, you’ll typically need to register for a seller's permit through the Tennessee Taxpayer Access Point website. This certificate allows a business to collect sales tax on taxable sales.
Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.
Read our sales tax guide to find out more.
Tennessee Employer Taxes
If you hire employees, you will need to register for Tennessee employer taxes through the Tennessee Department of Labor & Workforce Development website. This includes Employee Withholding Tax, Unemployment Insurance Tax, and Disability Insurance.
Tennessee Corporation Licenses and Permits
Do I need business licenses and permits?
To operate your corporation in Tennessee, you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Obtain the correct Tennessee business licenses and permits for your corporation, or have a professional licensing service do it for you:
- Federal: Use the U.S. Small Business Administration (SBA) guide to federal business licenses and permits.
- State: Apply for or learn more about licenses, permits, and registration with the State of Tennessee's website.
- Local: Contact your local county clerk and ask about local business licenses and permits.
File the Tennessee Corporate Annual Report
You must file the Tennessee Corporate Annual Report with the Secretary of State each year by the first day of the fourth month following the end of your corporation’s fiscal year. For example, the due date would be April 1 if your fiscal year ended Dec. 31. You can file entirely online or fill out an online form, print it, and mail it in. The filing fee is $20 plus a small additional service fee for online filings.
Corporate Dissolution & Tennessee Good Standing
How to Get a Tennessee Certificate of Good Standing
A Certificate of Good Standing, known in Tennessee as a Certificate of Existence, verifies that your Tennessee corporation was legally formed and has been properly maintained. Several instances where you might need to get one include:
- Seeking funding from banks or other lenders
- Forming your business as a foreign corporation in another state
- Obtaining or renewing specific business licenses or permits
Option 1: Request a Certificate Online With Tennessee Business Services Online
- OR -
Option 2: Request a Certificate by Mail With a Fillable Online Form
Fee: $20, plus a small service fee for online filings
Division of Business Services
312 Rosa L. Parks Avenue
Snodgrass Tower, 6th Floor
Nashville, TN 37243
How to Dissolve a Corporation in Tennessee
If at any point you would like to permanently stop doing business, or close your business, it is important to officially dissolve your corporation. Failure to do so in a timely fashion can result in tax liabilities, penalties, or even legal trouble.
There are six main steps to close your Tennessee corporation:
- Stop doing business
- Hold a board meeting, vote on dissolution, and record the meeting in the corporation minutes
- File the Articles of Dissolution with the Tennessee Department of State
- Close your federal and state business tax accounts with the IRS and Tennessee Department of Revenue
- File the Articles of Termination of Corporate Existence form with the Tennessee Department of State (if your corporation already issued shares and commenced business)
- Close your business bank accounts
File Dissolution Documents
Tennessee corporations have two dissolution options: the Articles of Dissolution and Termination by Incorporators or Initial Directors for corporations that have yet to issue shares or commence business and the Articles of Dissolution for corporations with issued shares.
If your corporation already issued shares and commenced business, you also must file the Articles of Termination of Corporate Existence after settling your tax accounts with the State of Tennessee.
Articles of Dissolution and Termination by Incorporators or Initial Directors
If your corporation has not yet issued shares or commenced business, you may file the Articles of Dissolution and Termination by Incorporators or Initial Directors (Form SS-4423). You may file it online or by mail. The filing fee is $20 plus a small service fee for online filings.
Articles of Dissolution
If your corporation already issued shares and commenced business, you must file the Articles of Dissolution (Form SS-4410). You may find it online or by mail. The filing fee is $20 plus a small service fee for online filings.
Then, after settling your state tax accounts, file the Articles of Termination of Corporate Existence. You may file it online or by mail. The filing fee is $20 plus a small service fee for online filings.
Protect Your Business & Personal Assets
Open a Business Bank Account
To maintain personal asset protection, it is essential to have dedicated business banking and business credit accounts.
When your personal and professional accounts are mixed, personal assets like your home or vehicle are at risk in the event your Tennessee corporation is sued. This is also known as piercing the corporate veil.
You can protect your Tennessee corporation by following these two steps:
1. Get a Business Bank Account
Opening a business bank account protects your personal assets and legitimizes your corporation. Separating your professional account from your personal account also simplifies your business’s tax filing and accounting processes.
To open a bank account for your Tennessee corporation, you will need an Employer Identification Number (EIN) and your corporation’s formation documents.
2. Open a Business Credit Card
Much like a business bank account, a dedicated business credit card will help your Tennessee corporation separate your personal and professional expenses.
In addition to this, a business credit card will also help build your business’s credit history, which can be used to raise capital for your corporation. A higher business credit score will also help your business obtain loans and higher credit limits later on.
Small business credit cards also offer benefits that personal credit cards do not, such as business-specific cash back rewards and travel perks.
3. Establish and Build Your Business Credit Score
Building business credit involves a number of factors, including establishing your business’s fundability, getting listed with the most important business credit agencies, and establishing credit lines while keeping them in good standing to build your score.
A good business credit score can help with many things, including credit cards that are issued in your business’s name instead of depending on your personal credit score, better interest rates on loans, higher lines of credit, and more.
All of these factors help protect your personal assets by making your business the entity responsible for the liability instead of yourself.
4. Hiring a business accountant:
- Prevents your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors
- Makes bookkeeping and payroll easier, leaving you with more time to focus on your growing business
- Helps effectively manage your business funding and discover areas of unforeseen loss or extra profit
For more business accounting tools, read our guide to the best business accounting software.
Business insurance helps you manage risks and focus on growing your Tennessee corporation. The most common types of business insurance are general liability insurance, professional liability insurance, and workers’ compensation.
- General Liability Insurance protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance covers claims of malpractice and other business errors for professional service providers (consultants, accountants, etc.)
- Workers' Compensation Insurance provides coverage for employees’ job-related illnesses, injuries, or deaths. Get a free quote with ADP.
Properly Execute Legal Documents
Signing a legal document improperly can leave you open to personal liability. You must sign as a representative of the business and not as yourself. When signing legal documents on behalf of your Tennessee corporation, follow this formula to avoid problems:
- The formal name of your business
- Your signature
- Your name
- Your position in the business as its authorized representative
Post Labor Law Posters
All businesses, including corporations, in the US with one or more employees are required to display the latest State and Federal Labor Law Posters in the workplace. These posters contain crucial information in a clear format that your employees can read in order to understand their workplace rights and obligations.
To learn more about Tennessee labor law posters, read our full guide.
Tennessee Corporation FAQ
Why Form a Corporation?
There are a number of good reasons to form a corporation. Some of the advantages include:
- Limited liability protection
- Unlimited capital generation
- Corporate tax benefits
- A more formal management structure
- Appeal to investors
To fully realize the benefits of incorporating, you will want to consider your company’s capital needs, profits, and management and ownership structure to make sure forming a corporation is the best business structure for you.
To learn more about what business structure is best for you, read our How to Choose a Business Structure guide.
What Type of Corporation Should I Form?
The best type of corporation for your business depends on many factors. Here are some different types of corporations:
- C corporations (C Corps) are owned by stockholders, have a board of directors, and hold annual meetings.
- S corporation (S Corp) is a type of tax classification. Unlike a C Corp, an S Corp can pass-through income to its shareholders for tax purposes. S Corps are limited to 100 shareholders.
- Professional corporations are generally for corporations that require certain licensed individuals (e.g., doctors, attorneys, etc.).
- Nonprofit corporations use profits to advance the company’s mission rather than distributing them to shareholders.
You should carefully consider your business’s structure, goals, and financial situation before selecting your corporate structure.
Should I Form a Corporation or an LLC?
A limited liability company (LLC), unlike a sole proprietorship or a general partnership, offers personal asset protection in the event that your business is subject to legal action. Additionally, unlike corporations, LLCs are also simple to form, simple to maintain, and are able to avoid “double taxation.”
That being said, corporations have an easier time raising capital than an LLC and they enjoy several tax benefits that LLCs do not, such as a lack of self-employment tax.
Deciding which is better—a corporation or an LLC—depends on your business’s specific situation. Your company’s size, structure, goals, and more will determine if it is better to form a corporation or form an LLC.
To learn more about which business structure is best for you, read our guide to choosing a business structure.
What is the Best State to Start a Corporation In?
While several states have laws designed to make them more attractive for corporations, the best state to incorporate in is generally the one where you are located and do the majority of your business.
Certain corporate tax benefits or other laws may look appealing, but you may end up complicating things and paying taxes and meeting compliance regulations in multiple states.
Can a Non-Citizen Start a Corporation in the USA?
Yes, non-citizens can start a corporation in the United States. You will need a physical mailing address in the US as well as a US bank account.
For more information about opening a company in the USA, read our guide.
How Do I Choose a Business Name?
There are many things to consider when choosing a business name, including your brand, name availability, and the naming laws in the state you are incorporating in. You can read more details about how to name your business in our step-by-step guide.
How Much Does It Cost to Incorporate?
The cost of incorporating (filing formation documents such as Articles of Incorporation, a Certificate of Formation, etc.) is between about $45 and $300, depending on your state. There may also be attorney’s fees and a registered agent fee, among others.
To learn more about the cost of setting up a corporation in each state, visit our state-specific corporation guides.
What is a Registered Agent?
A registered agent accepts tax and legal documents on behalf of your business. Most states require your corporation to have a registered agent. The agent can be a professional service, yourself, or a colleague given they meet the state's criteria.
For more information, check out our What is a Registered Agent page.
What Forms Do I Need to Start a Corporation?
Every state requires corporations to file a formation document such as a Certificate of Formation, a Certificate of Incorporation, or the Articles of Incorporation. Some states may require additional documents, such as a state tax registration form. Check our state-specific formation guides for more details.
Professional corporations that require licensed individuals may need certain permits and licenses to operate their businesses.
Do Corporations Have Yearly Filings?
Many states require corporations to file an annual report or other annual corporation paperwork, but requirements can vary.
How Are Corporations Taxed?
Owners of C corps pay taxes on profits paid (salaries, bonuses, and dividends), then everything else is filed under the corporate tax rate. Because of this, corporations are said to be “double taxed.” They are taxed first when the company makes a profit and then taxed again when dividends are paid to shareholders.
S corps are taxed differently, with profits passing through to the owners’ individual tax returns. For more information, check out our What is an S Corporation page.
What is the Corporation Tax Rate?
The U.S. federal corporate tax rate is 21%. Corporations might also have to pay additional state or local corporate taxes depending on where they decide to do business.
What Do I Do After I Get a Business Name?
After you get your business name, your next step is getting a unique logo. The strongest and most memorable businesses are built on a solid brand. When developing your brand, think about what your business stands for. Customers and clients are looking for companies that have a compelling brand, as much as they are shopping for high-quality products and services.
Creating a logo for your business is vital for increasing brand awareness. You can design your own unique logo using our Free Logo Generator. Our free tool will help you brand your business with a unique logo to make your business stand out.