The Land of Opportunity is working hard to make it easier to start a business there. Over 600 new businesses formed in Arkansas in 2019 alone. Plus, with an increase in incentives, training programs, innovation hubs, and more, it’s no wonder Area Development placed Arkansas on its 2017 list of the top states for doing business.
Arkansas is home to Fortune 500 companies like Tyson Foods, Walmart, and Windstream Holdings. Yet nearly a quarter million small businesses employ 48% of the state’s workforce. It’s only natural that the Natural State could become the home of your business, too. Here’s how to start a business in Arkansas.
Benefits of Opening a Business in Arkansas
With 2019 unemployment rates as low as 3.6%, max corporate taxes of 6.5%, and an individual income tax rate that tops out at 6.9%, Arkansawyers (or Arkansans, depending on who you ask) also benefit from lower costs of living than other parts of the U.S.
As the state works to attract new and growing businesses, programs may be available in urban areas such as Little Rock or Fayetteville, or rural areas in need of more economic development. Whether it’s through simplifying bureaucracy or deploying workforce development programs, Arkansas is investing in its people, and that can help you invest in starting your business.
Start an Entity in Arkansas
ZenBusiness offers the following formation services to our customers:
- Arkansas Limited Liability Company (LLC)
- Arkansas Professional Limited Liability Company
- Arkansas Corporation
- Arkansas Nonprofit Corporation
Search for a Business Name
Before filing for any entity, it will be necessary for you to decide upon a name for your business. To ensure that the desired title has not already been taken by another partnership, company or corporation, you must perform a search of the name database using the Arkansas Business Entity Search for provided by the Secretary of State website. If you are a foreign entity, and the name has already been taken in the state of Arkansas, you may file for the registration of a fictitious name to use in its stead.
Step 1- Filers are recommended to perform a Business Entity Search prior to registration to ensure that their business name is currently available for use. It is also possible to reserve a business name through ZenBusiness.
Step 2- The next step in the filing process is to provide the requisite business information. This process can be accomplished online or by downloading and completing a PDF application. For a full description of what is required of you, click on the link below that corresponds with your business type to read our more in-depth tutorial.
Step 3- Now that the filing information has been supplied, you will be required to pay for the filing fee (fees listed below). Those filing online will be able to pay the filing fee using either a credit card or through their INA account. For those who aren’t using the Secretary of State website to file, the completed application must be accommodated by a check made out to the Arkansas Secretary of State and mailed to the address below. Foreign applications must also include a certificate of good standing from their initial jurisdiction of formation.
Those who are filing as a corporation or limited liability company can secure the rights to their business name by filing a Name Reservation application. You will be given a window of 120 days to file for formation or qualification within the state of Arkansas before the name reservation expires. Reserve your business name with ZenBusiness today.
Arkansas Certificate of Good Standing
The Certificate of Good Standing of a business entity may be required when attempting to take out loans, renew business licenses, or complete any function in which proof of validity and compliance to state corporate law is needed. ZenBusiness also has this service within our offerings.
Arkansas Business Agreements
The below agreements are not required by law in the state of Arkansas, however, it is highly advisable that they be adopted. After filing for registration, an agreement should be completed in order to put into place the details of how the entity will operate. All managing members must agree to, sign, and be given a copy of the form as the state will not overlook the organization of the business.
Employer Identification Number (EIN)
Following the filing of a corporation, LLC, or partnership, an entity should register for an Employer Identification Number (also known as Federal Tax Identification Number) to be used by IRS for tax reporting purposes. This number enables a company to perform financial transactions such as opening bank accounts, applying for credit and paying employees. ZenBusiness offers an EIN service with every formation package available.
Register Your Arkansas Business, Open Financial Accounts, and Secure Insurance
Once you’ve selected your business name, it’s time to take care of the other under-the-hood logistics that will have you ready to do business in Arkansas, such as:
- Register your business structure and file any paperwork required by the state of Arkansas — you can start this process from the Secretary of State’s website or have a business formation service like ZenBusiness take care of it for you
- Apply to the IRS for an employer identification number (EIN), which you’ll use for tasks such as filing taxes or opening business bank accounts
- Review any other licensing, zoning, code, permitting, and/or taxation requirements that might be relevant to your Arkansas business
Your business’s insurance needs will vary depending on factors such as your industry, scale, and location. Consider talking with a local insurance agent who can help you get the right coverage, such as general liability, product liability, professional liability, and/or commercial property insurance.
And, of course, don’t forget the money. Opening business bank accounts, such as credit cards and checking, separates your business and personal finances — something that’s crucial to helping you keep accurate financial records and avoiding headaches if you ever get audited. Opening these accounts can also help you build your company’s credit and better track its financial health long-term.
Market Your Arkansas Business
As you open your small business in Arkansas, how will you get customers?
For starters, set up a basic business website with the domain name you registered. The website can tell people about you and your company, what you do, and, above all, what problems you solve for the customer. Also, include a contact page so customers and prospects can get in touch.
Also, examine social networks such as Facebook, Pinterest, Instagram, and Twitter. What platforms do your customers use, and how can you engage with them there?
Don’t rule out print and broadcast marketing, either. With hundreds of newspapers and broadcast media, advertising with local Arkansas media can be a powerful way to get your company in front of your target customer quickly.
Examples of Good Businesses to Start in Arkansas
From foreign investment to technology innovation, Arkansas is attracting a diverse range of industries. Here are some ideas for small businesses to consider starting in Arkansas based on recently-reported trends:
- Poultry farming
- Smartphone repair
- Nature tours
- Environmentally friendly cleaning services
- Fitness or personal training
Start Your Business in the Land of Opportunity
Arkansas wants more entrepreneurs to start businesses, and you could be one of those new business owners. From Bentonville to El Dorado, Little Rock to Fort Smith, there are low-risk, low-cost, and high-reward opportunities for the taking in the Natural State. With a solid business plan, an understanding of the state’s regulations, and hard work, you could be on your way to building a successful, profitable business in Arkansas.
Start Your Business in Arkansas FAQs
- How much does it cost to start a business in Arkansas?
Depending on the type of business, the application cost for a business license can range from $50 to over $1,000, plus an LLC filing fee of $45 or a corporation filing fee of $50.
- What is a good city to start a business in Arkansas?
Consider Arkadelphia, Conway, Fayetteville, Fort Smith, and North Little Rock for their business-friendly attitudes and proximity to big population centers.
- Do major corporations have headquarters in Arkansas?
Over 170 corporations base their operations in Arkansas.
- Does Arkansas help entrepreneurs and startups?
The Arkansas Economic Development Commission provides incentives, resources, collaboration partners, and more to help new businesses grow in Arkansas.
- Does Arkansas have a tech sector?
Arkansas has a growing tech sector. Many public and private resources are available to drive innovation and investment in Arkansas, such as the Arkansas Small Business and Technology Development Center.
- Does Arkansas have Opportunity Zones?
Arkansas has 85 Opportunity Zones throughout the state.