Is it cheaper to form an LLC in Tennessee than Delaware?

No. Tennessee costs more upfront (at least $300 vs $110), and if you operate in Delaware you must also register there as a foreign LLC ($200) plus pay a Tennessee registered agent. Realistic first-year cost is at least $650 versus $110 for forming locally.

Can I form my Delaware business in Tennessee?

Yes. Any Delaware business can form its LLC in Tennessee. But if the business operates in Delaware, it must also register there as a foreign LLC ($200 filing fee) and maintain a registered agent in Tennessee, so you take on two states' fees and filings instead of one.

Does Tennessee have better asset protection than Delaware?

Not meaningfully. Both states provide charging-order protection for LLC members, and neither offers a decisive asset-protection edge for a typical small business. Sound insurance and clean separation of business and personal finances matter more in practice.

State Comparison

Delaware LLC vs Tennessee LLC (2026)

Written for owners based in Delaware.

Verdict: for most owners, form where the business is based

Tennessee and Delaware happen to cost the same $400 a year, and they get there completely differently. Tennessee's annual report starts at $300 and rises $50 per member above six, up to a $3,000 ceiling, and every registered LLC owes at least the $100 minimum franchise tax whether active or not. Formation scales the same way, from a $300 minimum. Delaware's $400 is one flat tax that never scales with membership. Add members in Tennessee and the tie breaks; add a $200 Delaware registration and the point is moot.

Based in Tennessee? Read Tennessee LLC vs Delaware LLC →

Compare Delaware LLC vs Tennessee LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.

By Edmond Hui · Last updated: September 23, 2026

If your business is based in Delaware, a Delaware LLC needs no foreign registration there; a Tennessee LLC run from Delaware generally must also register in Delaware as a foreign LLC (Delaware's $200 filing fee). If your business is based in Tennessee, a Tennessee LLC needs no foreign registration there; a Delaware LLC run from Tennessee generally must also register in Tennessee as a foreign LLC (a filing fee of at least $300). An LLC formed in one of these states and run from the other owes whatever filings, fees and taxes each state requires. A Delaware LLC runs $510 in year one and $400/yr after; a Tennessee LLC runs from $700 and from $400/yr. See the full breakdown below.

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Factor	Delaware	Tennessee
Filing Fee	$110	$300
Processing Time	Not published by the state	Not published by the state
Annual Report Fee	None ($400/yr entity tax instead)	$300
Annual Report Due	None required	April 1
State Income Tax	Yes	No
Anonymous LLC	Yes	No
Publication Requirement	No	No
Foreign LLC Cost (if forming out-of-state)	N/A, you're in your home state	$200 + registered agent ~$150/yr

Full fee breakdown for either state: Delaware LLC cost and Tennessee LLC cost. Owner privacy options for either state: Delaware anonymous LLC guide and Tennessee anonymous LLC guide.

Business Climate: Delaware vs Tennessee

Factor	Delaware	Tennessee
5-year business survival rate	48.1% (#37 of 51)	46.4% (#45 of 51)
Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months))	+2.5% YoY (#33 of 51 by volume)	+19.9% YoY (#16 of 51 by volume)

Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)

See the full 50-state survival ranking.

Compare LLC Costs: Delaware vs Tennessee

State A

State B

Delaware

✓ Cheaper Upfront✓ Cheaper Long-Term

Formation fee$110

Annual report feeNo report required

State entity tax$400/yr, Annual LLC Tax (alternative entity tax)

Report dueNone required

Processing timeNot published by the state

Late penaltyNo report to file late. The annual tax carries its own penalty

Tennessee

Formation feefrom $300

Annual report feefrom $300

State entity taxfrom $100/yr, Franchise and Excise Tax

Report dueApril 1

Processing timeNot published by the state

Late penalty$0

Total Cost

Delaware

Tennessee

1 Year

$510

from $700

3 Years

$1,310

from $1,500

5 Years

$2,110

from $2,300

Will you operate outside your home state?

A figure shown as "from" is the least the state can charge, not a price. Tennessee's report is $300 for up to six members and $50 for each member above six, its franchise tax is the greater of $100 or 0.25% of Tennessee net worth, Wyoming's report is the greater of $60 or $.0002 per dollar of in-state assets, Kentucky's entity tax is $175 up to $3 million of gross receipts and graduated above it, and New York's annual filing fee is graduated on New York source gross income. A total that contains one of those is shown as "from" for the same reason. Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where the state publishes a rate for it, and any one-time registration charge a state requires before the LLC may trade. Two exclusions follow from that wording. Arizona and Nebraska require publication and publish no rate, so no newspaper cost is carried for either and their totals are not the whole cost. Alaska's $50 annual state business licence is a separate charge from the Secretary of State fees and is not carried here either. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.

Filing Fees & Formation Costs

Delaware charges $110 to form an LLC, while Tennessee charges at least $300. Delaware is $190 cheaper upfront. The cost that usually gets overlooked: if you form in Tennessee but operate in Delaware, you must also register as a foreign LLC in Delaware (a $200 filing) and maintain a registered agent in Tennessee (typically around $150 per year). That puts the realistic first-year cost of the Tennessee route at least $650, versus $110 for simply forming in Delaware. Speed isn't a basis for choosing between them: neither Delaware nor Tennessee publishes a standard processing time, so any figure comparing the two is guesswork.

Taxes: Delaware vs Tennessee

Tennessee has no personal income tax while Delaware does, but forming your LLC in Tennessee won't change that. LLC profits pass through to you and are taxed where you live and operate (in Delaware), not where the LLC is registered, so a Tennessee LLC offers no income-tax savings for a Delaware-based business. Delaware LLCs owe a flat $400 annual LLC tax (no report required). Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.

Privacy & Asset Protection

Delaware, your home state, actually offers more formation privacy than Tennessee: Delaware allows anonymous LLC formation, while Tennessee requires owner or manager information on public filings. Tennessee's annual report (a per-member filing) discloses the LLC's members/managers. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal. From a privacy standpoint there's no reason for a Delaware-based business to form in Tennessee.

Annual Maintenance Costs

Delaware LLCs file no annual report at all, and Tennessee LLCs file an annual report (at least $300, due April 1). If you form in Tennessee while operating in Delaware, you maintain filings in both states, Tennessee's report, though Delaware asks for nothing on the foreign-registration side, and pay a Tennessee registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Tennessee route to roughly $550 a year, versus about $400 to keep a domestic Delaware LLC in good standing. The taxes inside those totals: Delaware LLCs owe a flat $400 annual LLC tax (no report required). Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.

When Tennessee Actually Makes Sense

Forming in Tennessee makes sense in a few specific situations: your business genuinely operates in Tennessee, with a real office, employees, or property there, or you're relocating to Tennessee in the near future, which would also move you out of Delaware's personal income tax. For a typical small business based in Delaware, none of these usually apply. Registering a Tennessee LLC to do business back home means $200 in Delaware foreign-registration fees, on top of Tennessee's $300 minimum formation fee, while Delaware itself never asks for an annual report at all. Delaware already allows anonymous formation, so the privacy argument for Tennessee doesn't apply to a Delaware-based owner. Trading Delaware's no-annual-report status for Tennessee's filing calendar is a step backwards for most owners. When in doubt, form where you actually do business.

Frequently Asked Questions

: No. Tennessee costs more upfront (at least $300 vs $110), and if you operate in Delaware you must also register there as a foreign LLC ($200) plus pay a Tennessee registered agent. Realistic first-year cost is at least $650 versus $110 for forming locally.
: Yes. Any Delaware business can form its LLC in Tennessee. But if the business operates in Delaware, it must also register there as a foreign LLC ($200 filing fee) and maintain a registered agent in Tennessee, so you take on two states' fees and filings instead of one.
: Not meaningfully. Both states provide charging-order protection for LLC members, and neither offers a decisive asset-protection edge for a typical small business. Sound insurance and clean separation of business and personal finances matter more in practice.
: It depends on where the business is based. For a Delaware-based business, Delaware: forming where the business is based keeps costs and compliance simple, and Tennessee is worth considering only if you actually do business there. For a Tennessee-based business, the same reasoning points to Tennessee.
: Speed isn't a basis for choosing between them: neither Delaware nor Tennessee publishes a standard processing time, so any figure comparing the two is guesswork. Whichever you pick, remember that forming in Tennessee while operating in Delaware means you're not fully set up until the Delaware foreign registration is also processed, so the out-of-state route is rarely the faster path end to end. If your timing is genuinely fixed, buy the state's expedite tier rather than relying on a standard turnaround.

Comparison chart of forming an LLC in Delaware versus Tennessee, contrasting filing fees, annual report cost and ongoing obligations across 8 factors. — Delaware and Tennessee side by side on the factors that decide where to form. Source: MyStateLLC 50-state cost dataset, verified against each Secretary of State's published fee schedule, July 2026.

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More State Comparisons

Delaware vs Texas →Delaware vs Utah →Delaware vs Vermont →Delaware vs Wyoming →Tennessee vs Wyoming →

Delaware LLC Guide →Tennessee LLC Guide →

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Sources

Each entry below is a document recorded in our verified sources, and each entry says what the document is. Some statutory text is read from an accurate mirror rather than from the state's own host, and those say so. Where we hold the citation but no stable public link, the citation is printed on its own rather than pointed at a guessed address.

Delaware statute: 6 Del. C. § 18-1107(b) (annual LLC tax)
corp.delaware.govDelaware Division of Corporations: business entity filings
corpfiles.delaware.gov/AugustFee2024.pdfDelaware LLC filing fees
sos.tn.gov/businessesTennessee Secretary of State: business entity filings
sos.tn.gov/businesses/services/business-forms-feesTennessee LLC filing fees

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.