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Why Should Your Limited Liability Company (LLC) be in Tennessee?  

On Behalf of | Feb 27, 2018 | Business And Corporate Law

Batson Nolan wants business owners to know the advantages of out-of-state LLCs

Things to Consider for your LLC:

If you have multiple rental properties, a Tennessee LLC might be of benefit to you.

If someone sues the LLC, your personal assets are shielded as they can only access the assets of your LLC, regardless of whether your LLC has one or more members. While you may reside and do work in Tennessee, it is possible incorporating in another state would have benefits to you. Each state has different incentives and penalties with regard to business formation and doing business. This article will discuss the advantages of forming your LLC in Tennessee. When setting up a new limited liability company, you should consider the following factors:

  • Tax Filing fees
  • Business-friendly laws and statutes
  • Income tax
  • Sales tax
  • Franchise taxes and regulations

The main benefits of forming a LLC in Tennessee are:

  • No state income tax on limited liability companies
  • Asset protection and limited liability
  • LLC assets are safe from personal liabilities
  • Charging order protection extended to single member LLC’s
  • Members nor managers are not listed with the state
  • Good asset protection laws
  • No citizenship requirements
  • Transferability of ownership
  • Ability to build credit and raise capital
  • Number of owners is unlimited
  • Minimal paperwork and fees


Tennessee does not request the manager or members to be listed on a public database. A third party registered agent can file the required filings on behalf of the LLC. The initial set up and maintenance are affordable. The initial filing fee is around $100. Tennessee does not assess any corporate state income tax or limited liability company franchise tax. It assesses an annual fee of $50 to file a report, assuming your entity has less than $250,000.00 of assets located in Tennessee. You also have to maintain a registered agent, which usually costs around $100 per year. With a Tennessee LLC you are able to create LLCs under it in other states. This is especially helpful if you have multiple real estate properties in multiple states as there will be only one tax return. Tennessee has one of the strictest standards for holding owners of the LLC liable for business debts and charging order protection is extended to single member LLCs.

It is important to note if the physical location of your business is different than where you register the LLC, you will still have to file annual reports, pay filing fees and get a registered agent, and likely pay taxes in the state your business is in. Also, there is a chance the court where your business is located might not apply Tennessee law. Therefore, it is important to speak with an experienced attorney to assist you in determining where to set up your limited liability company.

The experienced attorneys at Batson Nolan PLC routinely deal with the complexities of Limited Liability Companies, and are ready and available to help you navigate your way through.  Give us a call today!