Form Your Tennessee C Corporation

The state filing fee for the Charter (Articles of Incorporation) is $100, paid to the Tennessee Secretary of State. Ongoing, you'll file a $20 annual report and pay a minimum $100 franchise tax each year, plus our service fee.

Filed online through TNCaB, a Tennessee Charter typically processes in 1-2 business days. The Tennessee Secretary of State is the filing agency.

Federally, a C corporation pays a flat 21% corporate income tax, and dividends paid to shareholders are taxed again at the shareholder level - the so-called 'double taxation.' In Tennessee, the corporation pays a 6.5% excise tax on net earnings plus a minimum $100 franchise tax; the state sales tax is 7%.

Venture capitalists and institutional investors almost always require a C corporation because it can issue multiple classes of stock, supports a clean cap table, has a board of directors and bylaws, and offers perpetual existence - the structure built for priced equity rounds and SAFEs.

If you receive restricted stock that vests over time, an 83(b) election lets you be taxed on the value at grant rather than as it vests. You must file it with the IRS within 30 days of receiving the restricted stock - the deadline is strict and missing it can be costly.

Qualified Small Business Stock (QSBS) benefits under Section 1202 may apply to stock issued by a qualifying C corporation, potentially reducing federal tax on a later sale. QSBS rules changed in 2025, so confirm current eligibility and holding requirements with a tax advisor.

No. Tennessee does not tax wages or salaries, which benefits founders and employees personally. The corporation itself still owes the 6.5% excise tax on net earnings and the franchise tax at the entity level.

Under FinCEN's March 2025 interim final rule, U.S. domestic corporations and U.S. persons are exempt from Beneficial Ownership Information (BOI) reporting. Only entities formed outside the U.S. and registered to do business in a state still file.