5 Best States to Start an LLC

4. Tennessee

Business Tax Climate Score: 5.44

Cumulative 10 Year Job Growth Rate: 30.1%

Tennessee is among the best states to start a limited liability company. It is very easy to form a limited liability company in Tennessee and the formation costs are only $309. Limited liability companies in Tennessee are taxed as pass-through entities, meaning the entity is not liable to any federal taxes directly. Instead, LLC members are supposed to pay federal income taxes on their earnings from the limited liability company. Tennessee also offers asset protection to limited liability companies.