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Looking to start a new Limited Liability Company (LLC) in the Natural State? With its diverse geography, warm weather, and booming population, it’s no surprise that Arkansas has been ranked one of the best states for doing business. So an LLC in Arkansas can be an excellent way to take advantage of a friendly commercial climate and a business configuration that offers flexibility and asset protection.
But like every other state, you can’t just get an LLC in Arkansas overnight. Instead, you have to follow a specific process for starting an LLC in Arkansas. In this article, we’ll explore each step of the LLC formation process in Arkansas and valuable tips and tricks that’ll make the process easier.
If you’re looking to cut through the red tape of running an LLC in Arkansas, check out our carefully crafted suite of products and services. We specially designed each one of them to make it less stressful to form a limited liability company.
Just one note before you hop in. These directions apply only if you want to start a domestic, for-profit LLC in Arkansas. Foreign LLCs, or LLCs formed outside of Arkansas but want to do business in the state, must follow a different process. Similarly, a Professional Limited Liability Company (PLLC) has unique filing requirements compared to a typical Arkansas LLC. However, we have a separate article to help you learn more about forming an Arkansas PLLC. Now let’s get started.
The first step to getting an LLC in Arkansas is to name your company. For obvious reasons, every business requires a name before registering with the state. Picking a name for your LLC is one of the most fun and exciting parts of the formation process. Start by taking some time to brainstorm a few ideas. Then run over them with your business partners and potential customers to discover the most popular ones. Also, take a moment to see our tips and tricks for naming your LLC.
You can pick virtually any name that you want for your LLC. Arkansas has only a few naming conventions that you have to follow. Specifically, your LLC’s name must:
The easiest way to see whether your business name is available is by using our Arkansas Business Entity Search. That said, it’s always a good idea to have a backup, so you should also search for your business’s name on the Arkansas Secretary of State’s website. Finally, you can call the Arkansas Secretary of State’s office directly at 501-682-2010.
Finding a name is easy, but starting an LLC takes time and planning. If you have the perfect name for your LLC but aren’t ready to form it yet, consider reserving a name to give yourself some peace of mind. With our name reservation service, you can reserve your ideal LLC name for up to 120 days while you get ready to launch your company.
All modern businesses need a vigorous online presence to attract customers and maximize their market share. Consequently, it’s a good idea to make sure you can find an online domain name that matches your LLC’s name. Register the perfect domain name for your business here.
More often than not, businesses can benefit from having an extra name. These names allow commercial ventures to enjoy some versatility while solidifying their reputation with their customers. Most states call these alternative monikers “Doing Business As” names (DBA names), but Arkansas simply refers to them as “fictitious names.” If obtaining a fictitious name sounds right for your situation, you’ll need to file an Arkansas Application for Fictitious Name with the Arkansas Secretary of State. Learn more about this process with our step-by-step guide on how to get a DBA name for your business in Arkansas.
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Now that you know the first part of how to start an LLC in Arkansas, you need to find a registered agent. A registered agent is a representative of the LLC with the power to accept important legal and financial documents on behalf of the business.
Every Arkansas LLC needs to have a registered agent by law. And every registered agent must have a set physical address within Arkansas. As the point of contact for the business, registered agents must be available during standard business hours to accept all incoming documents and forward them to the LLC. Examples of critical documents include lawsuit notices, notification of annual report deadlines, and tax forms.
A registered agent in Arkansas has one job: be present to accept important correspondence. Unfortunately, registered agents are unavailable more often than you might think. This can happen for a variety of reasons. Sometimes your registered agent may go on vacation or become sick without notifying anybody. Or maybe the registered agent incorrectly files paperwork or forgets to update the business’s contact information. Whatever the reason, if the registered agent is unavailable, a whole host of negative outcomes can follow. At the very least, your business will miss out on critical legal and business notices. Furthermore, the state may take action against you and your business if it can’t contact your registered agent. In some situations, it may initiate a lawsuit against your LLC or impose financial penalties. In the worst case scenario, the state may dissolve your LLC entirely for failing to meet the state’s requirements for LLCs.
Assuming they meet basic requirements, almost anyone can be a registered agent. Yet it’s best to use a commercial registered agent service rather than work as a registered agent yourself. For one, you have more important things to do than sit in an office waiting for documents to arrive. Second, making a mistake (notably, not being present to receive a notice) as a registered agent can be costly. Failing to respond to government notices can lead to fees, sanctions, and lawsuits. Those are the last things your business needs.
If you’re looking for a quality registered agent service, then look no further. Let us help you get a registered agent in Arkansas.
The most vital step of your Arkansas LLC application is filing an accurate Certificate of Organization. Once you file this form with the state, you will have an official Arkansas LLC. However, you need to complete this form accurately. Mistakes can delay the formation of your LLC or lead to several administrative consequences. Fortunately, we can take care of the filing process for you with our LLC formation plans.
Filing an Arkansas Certificate of Organization will set you back $50. If you choose to use our LLC formation plan, you can opt to expedite our processing speed for an extra fee. Normal processing time for our filings is 2 to 3 weeks. For an extra $50, you can reduce our processing time to 6 to 9 business days. And for an extra $100, you can further shrink processing time to 2 to 5 business days. To learn more about Arkansas’s other LLC fees, see our guide to Arkansas LLC costs.
Another tool to consider at this stage of the process is using an LLC organizer. An LLC organizer is a special agent of the business that prepares and files the business’s Certificate of Organization. A variety of people can serve as LLC organizers, including licensed attorneys, family members, registered agents, and companies like us. Curious about LLC organizers and how they can help you get your Certificate of Organization squared away? Check out our page on LLC Organizers.
LLCs commonly have two forms of management. With member-managed LLCs, the owners (or members) exercise control collectively over the company’s decisions. Alternatively, an LLC can choose to invite one or more professional managers (analogous to the executives of a corporation) to run the company. In Arkansas, LLCs are member-managed by default, and most LLCs begin operations as member-managed enterprises. LLCs tend to switch to manager-managed as they expand and complexify their operations.
Even if you accidentally filed your LLC’s Certificate of Organization incorrectly, we can give you a hand. Our amendment filing service lets you easily make changes and updates to your business’s name and address. You can also tweak your ownership structure and the name and address of your registered agent. Moreover, you can opt to use our Worry-Free Compliance service. This service can help you stay compliant with all of Arkansas’s annual filing requirements. It also gives your business two free yearly amendments so you can update your business’s Certificate of Organization when the occasion requires.
Although there’s no longer any requirement to file it with the Arkansas state government, an operating agreement is a vital document for your business. If you haven’t heard of them before, operating agreements help protect your personal assets by clearly stating the guidelines and procedures of the business. They can also help attract investors and future business partners.
If you’re going into business on your own, you may find it tempting to avoid drafting an operating agreement altogether. After all, why worry about avoiding disputes when there’s no one to have a dispute with?
Nevertheless, sole owners should still consider drafting an operating agreement for several reasons. First, having an operating agreement allows you to bring in new members on your terms. By having an operating agreement on hand before you bring on new members, you won’t need to worry about negotiating an agreement with them.
Furthermore, investors and business partners alike will use your operating agreement to size up your business. On top of that, many banks require you have an operating agreement before a business bank account with them. And if you are somehow incapacitated, a third party can easily uncover how to manage the LLC until your return.
Finally, in the unlikely event that you find yourself in a business lawsuit, an operating agreement can serve as valuable evidence and help prove that your business is a serious venture rather than mere pretense.
Operating agreements help clarify things like:
At the very least, you should take a few moments to learn more about the benefits of operating agreements. Without an operating agreement, your business will have to follow Arkansas’s default guidelines in the state’s Uniform LLC Act. These default provisions will almost certainly mean less favorable (and more cumbersome) treatment for you and your LLC compared to a personalized operating agreement.
Let’s say you’ve decided to make an operating agreement. Where do you start? What kinds of provisions should you include? These are the kinds of questions we love to solve. With our LLC operating agreement guide, we can give you a solid foundation for how your LLC operates. If you decide to form an LLC with ZenBusiness, our plans include a customizable operating agreement template. Our template can address issues like the division of profits and losses, the ownership structure of the LLC, and each member’s rights and responsibilities.
The last step in the LLC formation process is registering your company with the federal government by obtaining an Employer Identification Number (EIN). An EIN functions like a Social Security number for your business. And just as individuals place their Social Security numbers on their tax returns, businesses use their EIN to file taxes with the Internal Revenue Service (IRS). In addition to streamlining tax payments, EINs allow your LLC to hire new employees and qualify for a business bank account.
While you technically don’t need an EIN if you have only one employee, we recommend you get one anyway so you can respond quickly to new growth opportunities. On top of that, your investors will be far more confident in your company if you have a business bank account. And keeping your business funds in a business bank account is a fantastic way to solidify your business’s limited liability and protect your assets.
Want to get an EIN without dealing with the IRS? We understand completely. Let us handle the hassle for you with our quick and efficient EIN service.
✓ Our LLC formation service includes obtaining an EIN for your LLC but we can also help you get an EIN for an existing company
Arkansas requires all businesses — including LLCs — to pay the state’s yearly franchise tax. The annual franchise tax report costs $150. When filing your annual LLC franchise tax report, make sure you have your LLC’s management and registered information handy. And be extra careful to submit your LLC’s franchise tax report on time. Late filing can lead to penalties, interest, and even legal consequences.
If you plan to hire employees to work for your LLC, you will need to file for Arkansas Workers’ Compensation Insurance and withhold your employees’ income taxes. To get started, register for withholding tax with the Arkansas Department of Finance and Administration.
Finally, if your LLC plans to sell products to Arkansas customers, you will need to collect sales and use tax. As with withholding taxes, the first step in paying sales and use taxes is registering with the Arkansas Department of Finance and Administration.
We can help
Knowing how to get an LLC in Arkansas is the most important part of the formation process. But knowing the process and working through the process are two different things. We are dedicated to making it easier for entrepreneurs to start and grow their businesses. Our wide variety of services can handle almost any business need that comes your way. Whether you want to start your LLC in Little Rock, Hot Springs, or the heart of the Ozarks, we’re ready to help.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Arkansas LLC FAQs
Unlike some states, Arkansas doesn’t require every business to obtain a general business license. However, some localities may insist you obtain a municipal or county business license. The list of business licenses and permits you must acquire depends on your LLC’s individual characteristics. In what industries does your LLC operate? What kinds of products does it sell? When and where does it operate?
Whatever the answers to these questions, it’s more likely than not you will need permits and licenses from various authorities at the federal, state, and local levels. Discovering all the permitting and licensing requirements for your business can be overwhelming. But we can give you some peace of mind with our convenient business license report. This tool will provide a concise summary of all the licenses you need to operate legally in Arkansas. Our report includes not only federal and state permit requirements but also local and county ones as well!
The amount of money you need to start an LLC in Arkansas varies on several factors. At the very least, you will need $50 to file a Certificate of Organization. Note that filing fees can vary from time to time. To obtain the most recent list of fees, visit the Arkansas Secretary of State website.
On top of those $50 in filing fees, you will need to spend significant time going through the formation process. If you are willing to trade your time for a small amount of extra money, we can help you save a tremendous amount of time with our formation services.
The most significant benefit of LLCs in Arkansas is that they offer both liability protection and favorable tax treatment. By way of comparison, corporations offer favorable asset protection at the cost of subpar tax treatment, and sole proprietorships provide pass-through taxation without any form of limited liability. LLCs can also help their owners design their own custom operating procedures and choose from a versatile range of ownership structures.
Because LLCs offer pass-through taxation by default, they do not need to pay federal income tax at the organizational level. Instead, the LLC’s owners and partners pay taxes on their business earnings at the individual level. Your ownership share in the LLC determines the amount of taxes you pay for your LLC. For instance, if you own 50% of the LLC, you’ll be responsible for paying 50% of the taxes.
Pass-through taxation stands in contrast to double taxation, where the government imposes taxes both at the business level and at the individual level.
While most LLC owners embrace pass-through taxation, there are two possible alternatives. First, LLCs can choose to pay taxes as a C corporation. They can also try to pay taxes as an S corporation. Paying taxes as an S corporation allows LLCs to receive pass-through taxation treatment while also obtaining certain employment-related tax savings. However, there are cons to electing S corporation tax treatment. Specifically, the IRS places more restrictions on companies that identify as S corporations; it also keeps a closer eye on those companies’ financial activities. To learn more about what taxation approach is best for your LLC, you should consult a tax professional.
Aside from federal taxes, LLCs have to pay various state taxes. First, LLCs have to pay Arkansas’s annual franchise tax. Depending on their activities and situation, Arkansas LLCs may also have to pay state withholding taxes, sales and use taxes, unemployment insurance taxes, and good-specific taxes. Finally, your LLC may be responsible for paying certain local and municipal taxes depending on its location.
According to the Arkansas Secretary of State’s website, the estimated processing time is between 2 to10 business days. However, COVID-19 may cause delays in processing times.
No. It’s not a requirement to file your LLC’s operating agreement with the Arkansas state government. But because your operating agreement is vital to your LLC’s daily operations, keep at least one copy saved in a safe place.
Most business owners decide to take advantage of an LLC’s pass-through taxation so that they pay state and federal income taxes on their personal income rather than at the organizational level. That said, some LLC owners may decide to file taxes as a corporation. While not the ideal choice for all LLC owners, adopting this approach has advantages. Reach out to a qualified tax expert to learn more about how different tax treatments will affect your tax picture.
Yes. Arkansas state law allows business owners to operate a series LLC. If you haven’t heard of the concept before, a series LLC features a “parent” LLC that serves as the base for several subordinate, or “child,” LLCs. Each child LLC under the parent LLC operates independently. In addition, each child LLC has complete asset protection, so the liabilities of one child LLC can’t impact the other child LLCs. Think of it like a tree, with the master LLC being the tree trunk and the individual series LLCs being separate branches.
To dissolve an Arkansas LLC, simply file a Statement of Dissolution with the Arkansas Secretary of State. Make sure you include the appropriate fee. However, there are other steps you should take before you file a Statement of Dissolution. See our guide on dissolving your Arkansas business to learn more about winding up your business properly.
One of the benefits of an operating agreement is that it allows you to determine in advance how ownership transfer works in your LLC. Depending on the exact situation, transferring ownership may trigger a change in your LLC’s membership. However, you don’t need to notify the state if you change the ownership structure of your LLC.
Yes. However, Arkansas refers to DBA names as “fictitious names.” To obtain a fictitious name, apply for one with the Arkansas Secretary of State.
The answer depends on your operating agreement. If you have an operating agreement that addresses the issue of removing a member, you must follow that procedure unless it violates Arkansas law. If your LLC doesn’t have an operating agreement that touches on this issue, you’ll have to follow the default procedure in Arkansas’s Uniform LLC Act.
Yes and no. Arkansas LLCs must pay an annual franchise tax on or before May 1 of every calendar year. The forms for these franchise taxes essentially serve as the state’s version of annual reports. Outside these annual franchise tax reports, there is no annual report requirement. Even though they are a bit different from other states’ annual reports, we can help you prepare to file Arkansas annual franchise tax reports with our annual report service.
Technically, you don’t need a business plan for your LLC. However, it’s definitely a good idea to have a business plan before you start an LLC in Arkansas.
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