The numbers at a glance
| Tennessee | Delaware | |
|---|---|---|
| Filing fee | $300 | $110 |
| Annual report | $300 (annual) | $300 (annual) |
| Franchise tax min | $100 | $300 |
| Top state income tax | 0% | 6.6% |
| Privacy score | 5/10 | 7/10 |
| Banking accessibility | 8/10 | 10/10 |
| Standard processing | 5d | 10d |
| 5-year total cost | $2,550 | $3,360 |
On pure 5-year cost, Tennessee comes out ahead by $810. But cost is rarely the only factor.
When Tennessee wins
- No personal income tax
- You physically operate in Tennessee — staying in-state avoids foreign-LLC qualification costs.
When Delaware wins
- Court of Chancery
- Strong corporate law
- Anonymous members allowed
- Universal bank acceptance
Hidden costs of forming in Delaware from outside
If you live and operate in Tennessee but form in Delaware, you almost always pay both states' annual fees because you must register as a foreign LLC in Tennessee. The advertised cost difference often disappears entirely once foreign qualification fees and dual registered agents are factored in.
Decision framework
- Operating in Tennessee? Form in Tennessee.
- Pure holding company or non-resident? Delaware wins for VC-backed or holding structures.
- Raising VC money? Delaware C-Corp is the standard. Tennessee won't be accepted by most institutional investors.
See the full Delaware guide for Delaware-specific details, or jump to our 5-question quiz to get a personalized shortlist.