--- title: "Setting Up a Company in Tennessee" description: "How to set up an entity in Tennessee, the costs involved, and when an EOR is the faster route in. Teamed explains both paths." canonical: https://www.teamed.global/country-hiring-guides/united-states/tennessee/entity-setup --- ![Tennessee business district.](/cluster-assets/country-hiring-guides/united-states/tennessee/entity-setup/images/hero.webp) # How do you set upa company in Tennessee. You can register a Tennessee entity yourself or let Teamed employ your team there immediately through our EOR, no incorporation needed. Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions Last reviewed 22 September 2026 · Tennessee guide At a glance ## Tennessee entity setup, the numbers that matter Tennessee charges a formation and registration fee of $300 through the Secretary of State. Once formed, your entity owes franchise and excise tax: a 6.5% excise tax on income and a franchise tax calculated on your margin, with a $100 minimum even in a loss year. None of these numbers include the legal, registered agent, or ongoing compliance costs that come with running an entity yourself. Corporate income tax6.5% Minimum franchise tax$100 Franchise tax basismargin Formation / registration fee$300 Forming the entity ## What Tennessee actually asks for Registering a business entity in Tennessee runs through the Secretary of State, and the formation and registration fee is $300. That fee gets your entity on the books, but it does not cover the tax registrations, banking setup, and payroll infrastructure you need before you can legally pay someone. Once the entity exists, Tennessee's franchise and excise tax applies every year it operates. The excise tax portion sits at 6.5% of net income, and the franchise tax portion is calculated on your margin, with a minimum of $100 due regardless of profitability. Both taxes get filed together, and both keep applying whether or not you have active headcount in the state that year. The real cost of doing it yourself ## Where the effort actually goes The $300 registration fee is the easy part. The harder part is everything downstream: opening a business bank account, registering for state tax accounts, setting up a compliant payroll process, and staying current on the franchise and excise tax filing every year even if margins are thin or the entity barely operated. For a company hiring one or two people in Tennessee to test the market, that overhead rarely pays for itself quickly. Teamed's EOR exists for exactly that gap: you get someone legally employed in Tennessee within days, under Teamed's own entity, without touching Secretary of State filings or franchise tax calculations yourself. Before you commit ## Sometimes an employer of record is the better fit An employer of record is sometimes the better answer, not a compromise, when your Tennessee headcount is small or still shifting, or when you're testing the market before committing to a state. Talk to a member of the team about your specific plans, or run the numbers yourself with the crossover calculator, since the right answer depends on salaries and how long you intend to stay. Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue. Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb. Talk to a member of the team Model the crossover for the United States Who carries it ## Your own entity, when it's time. We set it up, migrate you in, and hand it back intact. Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it. For Tennessee, that means Teamed handles the Secretary of State registration, the franchise and excise tax setup, and the payroll infrastructure, then transfers the finished entity to you with your team already employed inside it. You avoid duplicating work: no re-hiring, no re-signing contracts, no gap in coverage during the handover. It works the same way across 100+ countries, so if Tennessee is one state among several, GEMO keeps the process consistent everywhere you expand. Entity Management (GEMO) The Graduation Model Employer cost calculator > They set up our EU entity and moved hires across without missing a payroll. *Helene Dubois, COO* Talk to an expert about Tennessee Questions ## Tennessee entity setup, common questions How much does it cost to register a business entity in Tennessee? The Tennessee Secretary of State charges a formation and registration fee of $300. That covers filing only, not the ongoing tax and compliance costs your entity will owe once it's operating. What taxes does a Tennessee entity owe every year? Tennessee applies a combined franchise and excise tax. The excise tax is 6.5% of net income, and the franchise tax is based on your margin with a minimum of $100 due even if the entity made no profit that year. Do I owe Tennessee franchise tax if my entity isn't profitable? Yes. The franchise tax has a $100 minimum that applies regardless of income, since it's calculated on margin rather than profit alone. Is it faster to use an EOR instead of forming a Tennessee entity? Generally yes, since an EOR like Teamed can employ your team in Tennessee without you filing anything with the Secretary of State or setting up franchise and excise tax accounts. Whether it's the cheaper long-term option depends on headcount and salaries, which the crossover calculator can help you estimate. Can I convert from an EOR to my own Tennessee entity later? Yes, Teamed's GEMO service handles exactly that transition, forming the entity, migrating your employees in, and handing it back to you fully operational. It's built for companies that start with an EOR and later decide Tennessee justifies its own entity. Where these figures come from ## Sources Figures on this page are drawn from the Tennessee Department of Revenue's franchise and excise tax basics and the Tennessee Secretary of State. ## More on entities in Tennessee - [Hiring in Tennessee, overview](/country-hiring-guides/united-states/tennessee)parent - [Tennessee running costs](/country-hiring-guides/united-states/tennessee/entity-running-costs-and-filings)sibling - [Tennessee tax presence](/country-hiring-guides/united-states/tennessee/permanent-establishment-risk)sibling - [Tennessee entity or eor](/country-hiring-guides/united-states/tennessee/eor-vs-entity)sibling - [Tennessee moving from an eor](/country-hiring-guides/united-states/tennessee/moving-from-eor-to-your-own-entity)sibling - [Set up an entity, by country](/entity-setup-by-country)hub - [Entity Management (GEMO)](/entity-management)core - [Talk to an expert about Tennessee](https://www.teamed.global/contact?from=entity-setup)CTA