Tennessee Processing Times and Fees
Like almost every state, Tennessee has both standard and expedited processing times for corporation filings. To help you decide which option is best for you, see our list of the average wait times for both options.
Tennessee charges a filing fee for handling your incorporation paperwork. Visit "compare pricing" in our incorporation center to see all state fees for Tennessee.
Deciding Between a Tennessee C-Corp or S-Corp Tax Designation
An S Corp is a special tax designation that corporations can choose if they meet certain requirements. It's the same as a C Corp in terms of compliance documents, structure, management and liability limits, but there are some important differences.
Ownership Rules: A C Corp can have an unlimited number of shareholders and stock classes. An S Corp is limited to no more than 100 shareholders and only one stock class. All shareholders in an S Corp must be citizens or legal residents of the United States.
Taxes: A C Corp is taxed as its own entity. It files and pays corporate taxes on its earnings. Shareholders may also pay taxes on dividends they receive. An S Corp is not a separate entity for tax purposes. It's a "pass-through" entity. It passes its earnings to its shareholders, who then pay taxes on their individual returns.
Documents: When you file as a corporation, the default designation is the C Corp. If you want your business to be an S Corp instead, you must file IRS Form 2553, Election by a Small Business Corporation, to elect this status.
Every state has its own personnel requirements for incorporating. In Tennessee, they include the following:
Age requirement: The state does not have age restrictions for corporate directors or incorporators.
Minimum number of directors: Most corporations must have at least one director. A corporation with 50 or fewer shareholders does not need directors, as long as its charter describes how the duties of a board of directors will be carried out.
Residency requirement: Tennessee does not require that directors live in the state.
You do not have to list your directors in your Articles of Incorporation, although the state allows you to do so if you like.
Other Requirements for Your Articles of Incorporation
In addition to personnel requirements, your Tennessee Articles of Incorporation, or Charter, must also include the following.
Every corporation must appoint a registered agent. This is a person or business responsible for accepting tax, legal and business documents for your corporation. Your agent must have a physical address in Tennessee and must be available during regular business hours. When you incorporate with us, we can help you designate an agent. You must state your registered agent's name and address in your Articles.
You must also include the following in your Articles of Incorporation or Charter in Tennessee:
- Your corporate name.
- The corporation's principal address.
- The number of shares your corporation is authorized to issue.
- The names and addresses of all your incorporators.
- A statement that your company is a for-profit corporation.
Tennessee allows you to list other, optional information in your charter. This information includes:
- Your corporation's purpose.
- Limits on the powers of the corporation or its board.
- Limits on the personal liability of directors for breach of duty.
Guidelines for Your Name
Your corporation's name should reflect what it is. Make sure it meets Tennessee's requirements.
Your name must include "Corporation," "Incorporated," "Company," or an abbreviation of one of these terms. You may also use words with the same meaning in another language, as long as they're written in Roman characters or letters. A banking or insurance company doesn't have to use these words or abbreviations.
Your name can't imply that your corporation is affiliated with a fraternal, religious, professional, or other similar organization, unless the organization certifies the affiliation in writing
Your name should not suggest that your corporation has organized for any purpose other than that which is allowed by state law or stated in your charter. For example, if you say your company sells camping supplies, don't call it "Video Game World, Inc."
Your name must be unique enough that it avoids confusion with any other business name already in use, registered or reserved with the Secretary of State.
Tennessee Corporate Taxes & Reports
Taxes are one of the least exciting parts of owning a business, but you'll have to pay them for your new corporation. Before you open your doors for business, apply to the IRS for an employer identification number, or EIN. This is a federal tax ID similar to an individual's Social Security number. All businesses with employees must have one.
We have more information about the tax structures of C Corps and S-Corps.
All corporations in Tennessee must file an annual report with the Secretary of State's office. This report, along with its associated fee, is due by the first day of the fourth month after the end of the corporation's fiscal year. The information in this report must be current as of the date the report is prepared.
Tennessee corporations must also provide annual financial statements to any shareholders who request them. This statement must include a balance sheet as of the end of the fiscal year, an income statement, and a statement of changes in shareholders' equity. Statements should be mailed to requesting shareholders within four months after the end of the fiscal year. Reports requested after this time should be mailed within one month of the request.
Keeping Corporate Records and Ongoing Filing Requirements
Tennessee requires that corporations create certain records to maintain their corporate status. The most important of these are bylaws and corporate meeting minutes.
A corporation's bylaws set rules and regulations for how it will operate. You can include any provisions you'd like in this document, as long as they are consistent with your Charter and the law.
Meeting minutes record actions and decisions taken during your board meetings and shareholders' meetings. You must keep copies of your meeting minutes at your principle office for three years.
Although Tennessee requires these documents, you don't have to file them with the state. Just keep them with your other corporate papers. We have more detailed information about Tennessee's requirements for bylaws and meeting minutes.
Best of luck with your new Tennessee corporation. When you're ready to file, we can make it easy for you.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.