The short answer
It depends. Tennessee has trade-offs: High formation fee ($50/member, min $300), F&E tax applies to LLCs. For most founders, alternatives like Wyoming or your home state are simpler.
Three deciding questions
1. Do you live or operate in Tennessee?
If yes, form here. Out-of-state formation while operating in Tennessee costs double, not half.
2. What is the 5-year all-in cost?
$2,550 (filing + 5 × annual report + $50 registered agent + franchise minimums). This is the actual number to compare across states.
3. What are your three real requirements?
- Privacy: 5/10 (moderate — members appear on public filings).
- Banking: 8/10 (workable but not premium).
- Cost: high 5-year total.
Tennessee pros
- No personal income tax
Tennessee cons
- High formation fee ($50/member, min $300)
- F&E tax applies to LLCs
Most common alternative
Wyoming for cost + privacy. Delaware for VC-backed startups. Your home state if you operate there. Run the 5-question quiz for a personalized shortlist.