Form a S-Corp in Tennessee
Everything you need to know about forming a 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 thereof. 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 who is authorized to receive legal and government correspondence on behalf of the corporation. The registered agent can be an individual Tennessee resident or a registered commercial agent service.
1-2 hours
File Articles of Incorporation
Prepare and file the Articles of Incorporation (Form SS-4417) with the Tennessee Secretary of State Division of Business Services, either online or by mail, along with the $100 filing fee. The articles must include the corporate name, registered agent details, number of authorized shares, and incorporator information.
1-2 hours
Create Corporate Bylaws
Draft internal corporate bylaws that govern the corporation's operations, including rules for shareholder meetings, director responsibilities, officer roles, and voting procedures. While not filed with the state, bylaws are a legal requirement for Tennessee corporations and should be kept in the corporate records book.
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 & Issue Stock — Conduct an initial organizational meeting of the board of directors to adopt bylaws, appoint officers, and authorize the issuance of stock to shareholders. Document all actions with meeting minutes, and issue stock certificates to initial shareholders.
- •Obtain EIN and Elect S-Corp Status — Apply for a federal Employer Identification Number (EIN) from the IRS at no cost, then file IRS Form 2553 (Election by a Small Business Corporation) to elect S-Corporation tax treatment. The election must be filed no later than two months and 15 days after the beginning of the tax year the election is to take effect.
- •Register for Tennessee State Taxes and Licenses — Register with the Tennessee Department of Revenue for applicable state taxes, including the Tennessee franchise and excise tax, and obtain any required business licenses or permits at the state and local level. Tennessee S-Corps remain subject to the state franchise and excise tax despite the federal pass-through election.
Advantages
- ✓Pass-through federal taxation avoids double taxation on corporate profits, with income and losses reported on shareholders' personal tax returns
- ✓Shareholders who are active employees can reduce self-employment tax liability by receiving a reasonable salary plus distributions, which are not subject to self-employment taxes
- ✓Provides limited liability protection, shielding shareholders' personal assets from business debts and legal obligations
- ✓Enhanced credibility and perpetual existence compared to sole proprietorships or partnerships, which can facilitate access to financing and business contracts
Considerations
- •Tennessee does not fully exempt S-Corps from state-level taxation; the franchise and excise tax applies, adding compliance costs and tax burden not present in some other states
- •Strict IRS eligibility requirements limit S-Corps to 100 shareholders, one class of stock, and only U.S. citizen or resident alien individual shareholders, restricting growth and investment flexibility
- •Greater administrative burden than LLCs, including mandatory bylaws, board of directors, meeting minutes, stock issuance records, and more rigorous corporate formalities required to maintain liability protection
Annual Obligations
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