Delaware vs Tennessee LLC: 2026 comparison for non-residents
Delaware vs Tennessee LLC compared on filing fee, annual tax, case-law depth, and recognition. Honest analysis from Delewarellc.
Side-by-side comparison: Delaware vs Tennessee
5-year state cost: Delaware vs Tennessee
State filing fee + annual fees over 5 years, in USD. Delaware highlighted. Excludes registered agent and CPA fees, which apply to both.
| Criteria | Delaware | Tennessee |
|---|---|---|
| Filing fee | $110 | $300 Tennessee filing fee |
| Annual tax/fee | $300 flat franchise tax (LLC) | $300 annual report fee plus Tennessee franchise tax above thresholds |
| Annual report required | No (LLCs) | Yes |
| Case-law depth | Deepest in US (Court of Chancery since 1792) | Less developed |
| US-counterparty recognition | Strongest (60% of Fortune 500) | Weaker |
| VC familiarity | Standard choice | Non-standard |
What Tennessee does well
Founders with Nashville or Memphis operations.
- No state personal income tax.
- Growing Nashville ecosystem.
What Tennessee does not do as well
- High filing and annual costs ($300/year recurring).
- Franchise tax adds complexity at scale.
When Delaware wins
Most non-resident bootstrap founders.
When Tennessee wins
Tennessee-resident founders.
Practical takeaway for non-resident founders
Tennessee's $300/year matches Delaware but without case-law depth or recognition. Stick with Delaware.
Frequently asked questions
What is a Delaware LLC?
A Delaware LLC is a limited liability company formed under Delaware Title 6 Chapter 18 (the Delaware Limited Liability Company Act). It provides limited liability to its members while allowing pass-through taxation by default. Delaware LLCs are popular among non-resident founders because Delaware allows formation without requiring the owner to be a US citizen or US resident.
Do Delaware LLCs file annual reports?
No. Delaware LLCs do not file annual reports. Instead, Delaware LLCs pay a flat $300 annual franchise tax due June 1. This is different from Delaware Corporations, which file both annual reports and franchise tax payments by March 1.
What does a Delaware LLC cost?
Delaware LLC year-one costs are $110 state filing fee plus registered agent fees ($50-$179/year depending on provider) plus optional service fees. Delewarellc charges $297 plus the state fee for full formation including registered agent for Year 1, EIN application, Operating Agreement, and bank account applications.
Primary sources cited
- Delaware LLCs pay a flat $300 annual franchise tax due June 1, regardless of revenue or member count. Delaware Code Title 6 § 18-1107(b)
- Delaware Certificate of Formation filing fee is $110. corp.delaware.gov fee schedule 2026
- More than 60% of Fortune 500 companies are incorporated in Delaware. Delaware Division of Corporations 2024 annual report
- The Delaware Limited Liability Company Act is codified at 6 Del. C. Chapter 18, sections 18-101 to 18-1109. Delaware Limited Liability Company Act, 6 Del. C. ch. 18
- Delaware does not have a state-level sales tax. Delaware Division of Revenue
Related resources
Form your Delaware LLC today
$297 + Delaware state fee, one-time. 8-10 days. One-time pricing.