# Tennessee: benefit corporation guide
Reviewed 2026-10-11 · Compared form: For-profit benefit corporation

Educational guide to selected statutes and agency guidance, not every court decision or a company-specific legal/tax opinion.

Balanced score: 70 / 100

## Comparison baseline
A small, active, private stock C corporation, after its first tax year, using the lowest capital/receipts/share-count tier, no taxable income or taxable alternative-minimum base, and ordinary online filings where available. It operates in the state being compared. Yearly costs include registry reports and the identified minimum state tax/license charge; multi-year charges are annualized. Variable income, receipts, sales, payroll and local taxes, agents and one-time formation costs are additional.

## Benefit company option
Usual rule: The usual benefit-corporation model is a for-profit stock company with a public-benefit purpose. Washington uses a related social-purpose form; eight states have no identified dedicated for-profit benefit form.

This state: For-profit benefit charter must name one or more public benefits; no separate broad general-benefit purpose required.

Why it differs: Tennessee offers For-profit benefit corporation.

### Benefit company option
Score: 20
Tennessee offers For-profit benefit corporation. The benefit option receives the full form credit.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-104](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

## Personal protections
Usual rule: The common starting point is a director protection clause that must be added to the charter. Many states do not extend that ordinary clause to officers. Exceptions, eligible people and covered claims differ.

This state: Optional charter monetary exculpation covers directors in internal corporation/shareholder fiduciary-duty claims. It does not extend the charter shield to officers acting solely as officers. Exceptions preserve loyalty breaches, bad faith, intentional misconduct, knowing law violations and unlawful-distribution liability; prospective only. Members of a substituted governing body are treated as directors. Ordinary good-faith conduct standards and officer/director indemnification are separate mechanisms. Director-only charter authority is confirmed by official SOS-form instructions and 2025 primary issuer filings; source dates are stated because current public code viewing requires acceptance of provider terms. Benefit-specific rule: Director performing mission duties not liable by virtue of being director; charter may protect disinterested failures from bad-faith/loyalty classification. No blanket corporate or distinct officer benefit-failure monetary bar in the enacted benefit text.

Why it differs: Tennessee keeps this ordinary shield limited to directors; the charter must elect the ordinary protection. 

### Protection for board members
Score: 6
Tennessee has an identified director monetary-protection provision in the compared scope, which earns this credit. Optional charter monetary exculpation covers directors in internal corporation/shareholder fiduciary-duty claims. It does not extend the charter shield to officers acting solely as officers. Exceptions preserve loyalty breaches, bad faith, intentional misconduct, knowing law violations and unlawful-distribution liability; prospective only. Members of a substituted governing body are treated as directors. Ordinary good-faith conduct standards and officer/director indemnification are separate mechanisms. Director-only charter authority is confirmed by official SOS-form instructions and 2025 primary issuer filings; source dates are stated because current public code viewing requires acceptance of provider terms.
- [Official Tennessee agency-hosted SS-4417 charter instructions, paragraph 7, referencing T.C.A. 48-12-102(b)](https://tpucdockets.tn.gov/archive/filings/2000/0001151g.pdf)
- [First Horizon May 7, 2025 SEC registration statement, Item 15: confirms optional director charter authority; issuer primary filing](https://www.sec.gov/Archives/edgar/data/36966/000093041325001672/c112616_s3asr.htm)
- [Filed Tennessee charter, paragraph 9: director carve-outs; archived issuer primary document](https://www.sec.gov/Archives/edgar/data/880026/000119312508163904/dex3117.htm)
- [2025 republication of T.C.A. 48-12-102(b)(3), used to cross-check current exceptions; unofficial statutory republication](https://law.justia.com/codes/tennessee/title-48/for-profit-business-corporations/chapter-12/section-48-12-102/)

### Protection for company officers
Score: 0
Tennessee does not extend the scored ordinary charter shield to officers acting only as officers, so no officer credit is awarded. Separate indemnification or insurance may still matter.
- [Official Tennessee agency-hosted SS-4417 charter instructions, paragraph 7, referencing T.C.A. 48-12-102(b)](https://tpucdockets.tn.gov/archive/filings/2000/0001151g.pdf)
- [First Horizon May 7, 2025 SEC registration statement, Item 15: confirms optional director charter authority; issuer primary filing](https://www.sec.gov/Archives/edgar/data/36966/000093041325001672/c112616_s3asr.htm)
- [Filed Tennessee charter, paragraph 9: director carve-outs; archived issuer primary document](https://www.sec.gov/Archives/edgar/data/880026/000119312508163904/dex3117.htm)
- [2025 republication of T.C.A. 48-12-102(b)(3), used to cross-check current exceptions; unofficial statutory republication](https://law.justia.com/codes/tennessee/title-48/for-profit-business-corporations/chapter-12/section-48-12-102/)

### Protection without extra setup
Score: 0
Tennessee requires an elected charter provision for the scored ordinary protection; it gets no automatic-coverage credit. The clause must actually be put in the charter to help.
- [Official Tennessee agency-hosted SS-4417 charter instructions, paragraph 7, referencing T.C.A. 48-12-102(b)](https://tpucdockets.tn.gov/archive/filings/2000/0001151g.pdf)
- [First Horizon May 7, 2025 SEC registration statement, Item 15: confirms optional director charter authority; issuer primary filing](https://www.sec.gov/Archives/edgar/data/36966/000093041325001672/c112616_s3asr.htm)
- [Filed Tennessee charter, paragraph 9: director carve-outs; archived issuer primary document](https://www.sec.gov/Archives/edgar/data/880026/000119312508163904/dex3117.htm)
- [2025 republication of T.C.A. 48-12-102(b)(3), used to cross-check current exceptions; unofficial statutory republication](https://law.justia.com/codes/tennessee/title-48/for-profit-business-corporations/chapter-12/section-48-12-102/)

### Protection when a benefit goal is missed
Score: 0
Tennessee has no separately credited benefit-specific monetary shield for company. Director performing mission duties not liable by virtue of being director; charter may protect disinterested failures from bad-faith/loyalty classification. No blanket corporate or distinct officer benefit-failure monetary bar in the enacted benefit text.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106; full adopted benefit chapter](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Board protection for benefit work
Score: 4
Tennessee earns the benefit-specific credit for directors. Director performing mission duties not liable by virtue of being director; charter may protect disinterested failures from bad-faith/loyalty classification. No blanket corporate or distinct officer benefit-failure monetary bar in the enacted benefit text.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106; full adopted benefit chapter](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Officer protection for benefit work
Score: 0
Tennessee has no separately credited benefit-specific monetary shield for officers. Director performing mission duties not liable by virtue of being director; charter may protect disinterested failures from bad-faith/loyalty classification. No blanket corporate or distinct officer benefit-failure monetary bar in the enacted benefit text.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106; full adopted benefit chapter](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

## Less paperwork
Usual rule: The most common benefit model requires an annual report using an outside assessment framework, without a separate state benefit-report filing. An outside framework does not necessarily mean paying for certification.

This state: Annual narrative delivered to shareholders within four months after fiscal year-end; all reports public website/latest free copy if no website. No state benefit-report filing specified. Assessment rule: Optional through charter/bylaws. Not required; charter/bylaws may add it.

Why it differs: Tennessee: Annual; Optional / no mandate outside framework; no separate state benefit-report filing. No additional scored benefit-director/report-approval step applies to this private-company scope.

### How often reports are needed
Score: 5
Tennessee: Annual. An annual report gets less ease-of-operation credit than a biennial report or no mandatory report because it must be prepared more often.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Choice of impact framework
Score: 8
Tennessee: Optional / no mandate. An optional framework earns more flexibility credit and no mandatory-framework transparency credit.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107(f)](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107(c),(f)](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Extra reports sent to the state
Score: 4
Tennessee: No separate state benefit-report filing. No separate state submission earns the no-extra-filing credit. Preparing, sharing or publishing the report may still be required.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Extra board or approval steps
Score: 3
Tennessee has no additional scored benefit-director/report-approval step for this private-company scope, so it earns the ease-of-operation credit. Public-company rules and other duties may differ.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

## Yearly state costs and taxes
Usual rule: There is no uniform state charge. Compare the recurring report fee together with the minimum state tax or license charge for the stated small-company scenario. A low income-tax rate alone does not show this cost.

This state: Registry reporting: $20 per year on an annualized basis. Minimum tax/license used here: $100. Small active nonexempt domestic C corporation with apportioned net worth at or below $40,000, no Tennessee taxable net earnings, and no standard business-license tax obligation: $100 franchise minimum. Below-$100,000 receipts remove ordinary business tax when correctly licensed; conditional $15 county/city minimal-activity license fees are outside this state-tax-only amount.

Why it differs: Tennessee has a compared recurring floor of $120 per year, including $100 in identified minimum tax/license charges.

### Yearly filings plus minimum state taxes
Score: 9
Tennessee has a compared recurring floor of $120 per year, including $100 in identified minimum tax/license charges. Small active nonexempt domestic C corporation with apportioned net worth at or below $40,000, no Tennessee taxable net earnings, and no standard business-license tax obligation: $100 franchise minimum. Below-$100,000 receipts remove ordinary business tax when correctly licensed; conditional $15 county/city minimal-activity license fees are outside this state-tax-only amount. Lower recurring floors earn more cost credit. Profit/receipts-based taxes and local charges are additional; this is not the whole tax bill.
- [Corporations annual report fee](https://sos.tn.gov/businesses/forms-and-fees)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Franchise and Excise Tax Basics: minimum franchise tax](https://www.tn.gov/content/dam/tn/revenue/documents/taxpayer_education/fae/Tax_Basics.pdf)
- [Tennessee Revenue: registered-entity franchise/excise scope and $100 inactive/active minimum](https://www.tn.gov/revenue/taxes/franchise---excise-tax.html.html)
- [Tennessee Revenue: current franchise and excise tax rates](https://www.tn.gov/revenue/taxes/franchise---excise-tax/due-dates-and-tax-rates.html.html)
- [Tennessee Revenue: $50,000 standard excise deduction and pre-apportionment calculation](https://www.tn.gov/content/dam/tn/revenue/documents/notices/fae/23-04fe.pdf)
- [Tennessee Revenue: current franchise/excise manual, property-measure repeal and apportionment transition](https://www.tn.gov/content/dam/tn/revenue/documents/tax_manuals/june-2025/Frachise-Excise-Tax-Manual.pdf)
- [Tennessee Revenue: standard single-sales-factor formula from tax years ending December 31, 2025](https://revenue.support.tn.gov/hc/en-us/articles/360058264151-F-E-Apportionment-9-Single-Sales-Factor-Apportionment-Three-Year-Phase-In)
- [Tennessee Revenue: business-tax threshold and state/city scope](https://www.tn.gov/content/tn/revenue/taxes/business-tax.html)
- [Tennessee Revenue: minimal-activity/standard business licenses, $15 renewal and $22 minimum](https://revenue.support.tn.gov/hc/en-us/articles/360057134532-BUS-13-Business-Licenses-Overview)

## Becoming a benefit company and changing back
Usual rule: Two-thirds approval is the common benefit-status gate. Some states use ordinary amendment votes, some demand more, and class-by-class voting can give even a small share class a veto.

This state: Becoming a benefit company: 2/3 each class. 2/3 each outstanding class voting/nonvoting for entry/exit, chosen-benefit change and covered transactions; dissent payment rights. Surviving benefit purpose must be same/substantially same for stated merger exception. Changing back: 2/3 each class

Why it differs: Tennessee entry uses 2/3 each class; exit uses 2/3 each class. Easier entry helps adoption. Easier exit also scores higher here, although a mission-preservation priority may favor a harder exit.

### Ease of becoming a benefit company
Score: 6
Tennessee: becoming a benefit company requires 2/3 each class. Ordinary votes receive more ease-of-change credit than two-thirds; three-quarters, 90% and unanimous gates receive less. Class votes, notice, appraisal and any higher charter requirements remain.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-104](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Ease of changing status later
Score: 6
Tennessee: changing back requires 2/3 each class. Ordinary votes receive more ease-of-change credit than two-thirds; three-quarters, 90% and unanimous gates receive less. Class votes, notice, appraisal and any higher charter requirements remain.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-104](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

## Public transparency
Usual rule: Annual reporting, public access, an outside assessment framework and a mandatory mission duty are common. Stronger disclosure can help people check promises while adding work or exposing owner information.

This state: Director shall consider materially affected interests including shareholders and chosen benefits; shall not give regular/presumptive/permanent priority to a constituency. This is consideration/no-fixed-priority wording, not the three-interest balancing text. Charter may opt in to disinterested-failure safe harbor. Disclosure: Annual narrative delivered to shareholders within four months after fiscal year-end; all reports public website/latest free copy if no website. No state benefit-report filing specified. Enforcement: Derivative enforcement of director mission duties by 2% total shareholders at filing, or listed lesser 2%/$2m.

Why it differs: Tennessee requires public access to the report. Mandatory public annual narrative, third-party optional. Minimum franchise tax separate from $20 report.

### Reports the public can read
Score: 8
Tennessee requires report access for people outside the company, so it earns public-access credit. Annual narrative delivered to shareholders within four months after fiscal year-end; all reports public website/latest free copy if no website. No state benefit-report filing specified.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### Regular updates on progress
Score: 6
Tennessee: Annual. Annual updates earn more transparency credit than biennial updates; no mandated report earns none.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### An outside impact framework
Score: 0
Tennessee: Optional / no mandate. An optional framework earns more flexibility credit and no mandatory-framework transparency credit.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107(f)](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107(c),(f)](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

### A duty to consider the mission
Score: 3
Tennessee makes a mission duty mandatory, so it earns this credit. Director shall consider materially affected interests including shareholders and chosen benefits; shall not give regular/presumptive/permanent priority to a constituency. This is consideration/no-fixed-priority wording, not the three-interest balancing text. Charter may opt in to disinterested-failure safe harbor.
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)

## State taxes
Tennessee's ordinary excise tax is 6.5% of Tennessee taxable income. For tax years ending on or after December 31, 2024, taxpayers receive a standard deduction up to $50,000 of pre-apportioned adjusted net earnings; it cannot create or enlarge a net loss. Franchise tax is a separate net-worth tax.
Franchise tax is 0.25% of Tennessee-apportioned net worth, with a $100 minimum for nonexempt entities incorporated, domesticated, qualified, or registered in Tennessee, whether active or inactive. The former property-value alternative minimum measure was repealed. Tennessee business tax also depends on taxable receipts/classification and has a $22 ordinary minimum for standard-license taxpayers; local minimal-activity licenses can renew for $15 each where receipts exceed $3,000 but are below $100,000.
Franchise/excise registration, nexus, and apportionment matter independently of income. Ordinary apportioning taxpayers use single-sales-factor apportionment for tax years ending on or after December 31, 2025, subject to industry exceptions. Gross-receipts business tax and county/city licenses have separate sourcing, location, thresholds, and renewal rules; a zero-profit corporation can still owe these charges.

## Full reviewed legal topics

### purpose
For-profit benefit charter must name one or more public benefits; no separate broad general-benefit purpose required.

### board
Director shall consider materially affected interests including shareholders and chosen benefits; shall not give regular/presumptive/permanent priority to a constituency. This is consideration/no-fixed-priority wording, not the three-interest balancing text. Charter may opt in to disinterested-failure safe harbor.

### standard
Optional through charter/bylaws. Not required; charter/bylaws may add it.

### certification
Not required; charter/bylaws may add it.

### report
Annual narrative delivered to shareholders within four months after fiscal year-end; all reports public website/latest free copy if no website. No state benefit-report filing specified.

### enforcement
Derivative enforcement of director mission duties by 2% total shareholders at filing, or listed lesser 2%/$2m.

### benefitLiability
Director performing mission duties not liable by virtue of being director; charter may protect disinterested failures from bad-faith/loyalty classification. No blanket corporate or distinct officer benefit-failure monetary bar in the enacted benefit text.

### ordinaryExculpation
Optional charter monetary exculpation covers directors in internal corporation/shareholder fiduciary-duty claims. It does not extend the charter shield to officers acting solely as officers. Exceptions preserve loyalty breaches, bad faith, intentional misconduct, knowing law violations and unlawful-distribution liability; prospective only. Members of a substituted governing body are treated as directors. Ordinary good-faith conduct standards and officer/director indemnification are separate mechanisms. Director-only charter authority is confirmed by official SOS-form instructions and 2025 primary issuer filings; source dates are stated because current public code viewing requires acceptance of provider terms.

### statusChange
2/3 each outstanding class voting/nonvoting for entry/exit, chosen-benefit change and covered transactions; dissent payment rights. Surviving benefit purpose must be same/substantially same for stated merger exception.

## Costs and conditions

### regularReport
Ordinary corporation annual report $20, excluding $20 agent-change surcharge.

### benefitReport
No mandatory state benefit-report filing in the cited reporting provision; no separate required filing fee identified.

### minimumTax
Minimum Tennessee franchise tax $100 for taxable registered/chartered entities, even inactive; exemptions and other excise/franchise amounts require separate calculation.

## Conversion route
Existing domestic stock corporation: use the statute’s charter/articles election process and its board, shareholder, class and notice requirements.
2/3 each outstanding class voting/nonvoting for entry/exit, chosen-benefit change and covered transactions; dissent payment rights. Surviving benefit purpose must be same/substantially same for stated merger exception.

## Important distinctions
- Consideration plus no permanent constituency priority, not Delaware balance text.
- Mandatory public annual narrative, third-party optional.
- Minimum franchise tax separate from $20 report.

## Source qualifications
Benefit law read in adopted SA0433 (2015) and official enactment history; ordinary charter mechanism read in official agency-hosted form and current issuer primary filing, with the 2025 unofficial statutory republication used to cross-check exact exceptions. The paid-provider public-code terms were not accepted.

## All reviewed official/primary links
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-104](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107(f)](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107(c),(f)](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-107](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-108](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Adopted SA0433 to SB0972 (2015), T.C.A. 48-28-106; full adopted benefit chapter](https://capitol.tn.gov/Bills/109/Amend/SA0433.pdf)
- [Official Tennessee agency-hosted SS-4417 charter instructions, paragraph 7, referencing T.C.A. 48-12-102(b)](https://tpucdockets.tn.gov/archive/filings/2000/0001151g.pdf)
- [First Horizon May 7, 2025 SEC registration statement, Item 15: confirms optional director charter authority; issuer primary filing](https://www.sec.gov/Archives/edgar/data/36966/000093041325001672/c112616_s3asr.htm)
- [Filed Tennessee charter, paragraph 9: director carve-outs; archived issuer primary document](https://www.sec.gov/Archives/edgar/data/880026/000119312508163904/dex3117.htm)
- [2025 republication of T.C.A. 48-12-102(b)(3), used to cross-check current exceptions; unofficial statutory republication](https://law.justia.com/codes/tennessee/title-48/for-profit-business-corporations/chapter-12/section-48-12-102/)
- [Corporations annual report fee](https://sos.tn.gov/businesses/forms-and-fees)
- [Franchise and Excise Tax Basics: minimum franchise tax](https://www.tn.gov/content/dam/tn/revenue/documents/taxpayer_education/fae/Tax_Basics.pdf)
- [Tennessee Revenue: registered-entity franchise/excise scope and $100 inactive/active minimum](https://www.tn.gov/revenue/taxes/franchise---excise-tax.html.html)
- [Tennessee Revenue: current franchise and excise tax rates](https://www.tn.gov/revenue/taxes/franchise---excise-tax/due-dates-and-tax-rates.html.html)
- [Tennessee Revenue: $50,000 standard excise deduction and pre-apportionment calculation](https://www.tn.gov/content/dam/tn/revenue/documents/notices/fae/23-04fe.pdf)
- [Tennessee Revenue: current franchise/excise manual, property-measure repeal and apportionment transition](https://www.tn.gov/content/dam/tn/revenue/documents/tax_manuals/june-2025/Frachise-Excise-Tax-Manual.pdf)
- [Tennessee Revenue: standard single-sales-factor formula from tax years ending December 31, 2025](https://revenue.support.tn.gov/hc/en-us/articles/360058264151-F-E-Apportionment-9-Single-Sales-Factor-Apportionment-Three-Year-Phase-In)
- [Tennessee Revenue: business-tax threshold and state/city scope](https://www.tn.gov/content/tn/revenue/taxes/business-tax.html)
- [Tennessee Revenue: minimal-activity/standard business licenses, $15 renewal and $22 minimum](https://revenue.support.tn.gov/hc/en-us/articles/360057134532-BUS-13-Business-Licenses-Overview)