Choosing the Right Business Structure in Tennessee: LLC, S Corp, or Something Else?

Your business structure determines how you pay taxes, how you’re protected legally, and what filings you must complete each year. Choosing wisely at the start saves you from expensive changes later.

Sole Proprietorship

The fastest way to get started — but offers no liability protection. Income reports directly on your personal return.

Single-Member LLC

The most common option for new Tennessee business owners.

· Files with the state

· Reports taxes on your personal return

· Must have a December 31 year-end

· Required to register for Franchise & Excise tax

Multi-Member LLC

Owned by two or more people.

· Must file a separate partnership tax return

· Returns are due March 15

· Income is split using K-1 forms

S Corporation

Great for businesses earning enough to justify payroll.

· Owners must be paid a reasonable salary

· Must file an S Corp return by March 15

· Still must pay Franchise & Excise in Tennessee

C Corporation

Less common for small businesses but necessary for some industries.

· Must run payroll for owners

· Separate corporate tax return

· Required to pay Franchise & Excise

If you’re unsure which structure is right for you, we can review your goals and help you choose with confidence.

If you’re starting a business in Tennessee and want clear guidance, our team is here to help. We offer in-person support, transparent pricing, and full-service tax, payroll, and bookkeeping right here in Mt. Juliet.

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