Form an S-Corp in Tennessee
Everything you need to know about forming an S-Corp in Tennessee. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Corporate Name
Select a unique business name that includes a corporate designator such as 'Corporation,' 'Incorporated,' 'Company,' or an abbreviation (Corp., Inc., Co.). Verify name availability using the Tennessee Secretary of State's online business name search tool.
30 minutes
Appoint a Registered Agent
Designate a registered agent with a physical street address in Tennessee (P.O. boxes are not permitted) who will receive legal and official government correspondence on behalf of the corporation. The agent can be an individual resident or a registered commercial agent service.
1 hour
File Articles of Incorporation
Prepare and file the Articles of Incorporation with the Tennessee Secretary of State Division of Business Services, either online at sos.tn.gov or by mail. Include the corporate name, registered agent details, number of authorized shares, and incorporator information along with the $100 filing fee.
1-2 hours
Create Corporate Bylaws
Draft corporate bylaws that outline the internal governance of the corporation, including procedures for shareholder meetings, director responsibilities, officer roles, and voting rights. Although not filed with the state, bylaws are required for proper corporate operation in Tennessee.
2-4 hours
What's Next After Filing
Once your S-Corp is officially formed, you'll want to complete these important steps:
- •Hold Organizational Meeting and Elect Directors — Conduct the initial organizational meeting of incorporators or the board of directors to adopt bylaws, elect officers, authorize the issuance of stock, and address other foundational corporate matters. Document the meeting with formal minutes.
- •Elect S-Corporation Status with the IRS — File IRS Form 2553 (Election by a Small Business Corporation) to elect federal S-Corporation tax treatment. This must be filed no later than 2 months and 15 days after the beginning of the tax year for which the election is to take effect. All shareholders must consent to the election.
- •Obtain EIN, Licenses, and Register for State Taxes — Apply for a federal Employer Identification Number (EIN) through the IRS, obtain any required local and state business licenses, and register with the Tennessee Department of Revenue for applicable state taxes including franchise and excise taxes. Open a dedicated corporate bank account to maintain liability protection.
Advantages
- ✓Pass-through federal taxation avoids double taxation on profits, with income and losses reported on shareholders' personal returns
- ✓Shareholders who are active in the business can reduce self-employment taxes by splitting income between reasonable salary and distributions
- ✓Provides limited liability protection, shielding shareholders' personal assets from business debts and legal judgments
- ✓Enhanced credibility and formal structure that may be attractive to investors, lenders, and business partners
Considerations
- •Tennessee imposes both a franchise tax and an excise tax at the entity level, reducing some of the tax benefits compared to other states
- •Strict IRS eligibility requirements limit S-Corps to 100 shareholders, one class of stock, and restrict ownership to U.S. citizens or resident aliens
- •Greater administrative burden than an LLC, requiring corporate formalities such as bylaws, board meetings, recorded minutes, and strict record-keeping to maintain liability protection
Annual Obligations
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