Tennessee LLC vs Corporation

Name: LLC Tennessee.org
Price range: $$

Both provide liability protection. Both owe Tennessee's franchise & excise tax. The difference is governance flexibility and federal tax treatment. For LLC formation, see how to form a Tennessee LLC.

Key Tennessee-Specific Points

Both LLCs and corporations owe Tennessee F&E tax (6.5% excise + 0.25% franchise, $300 min)
Both are exempt from personal income tax at the member/shareholder level
Formation fees differ: LLC is $300/member; corporation is a flat fee
Ongoing: both file Annual Reports ($300) and F&E returns

Quick Comparison

Factor	Tennessee LLC	Tennessee Corporation
F&E tax	Yes ($300 min)	Yes ($300 min)
Personal income tax	None	None
Annual Report	$300 (April 1)	$300 (April 1)
Management	Flexible	Board + officers
Default federal tax	Pass-through	C-corp (double taxation federally)

FAQ

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Is there a tax difference between LLC and corporation in Tennessee?

At the Tennessee level: minimal — both owe F&E tax. At the federal level: significant. LLC passes through (one level of tax); C-corp faces double taxation (corporate + dividend).