Start An LLC In Arkansas
This guide will provide you with information about starting an LLC in Arkansas. We will go through an LLC’s formation process. We will also answer how much it costs to start an LLC in Arkansas.
An LLC (Limited Liability Company) is a business structure that protects its owners from personal responsibility for its debts or liabilities. To learn more about founding an LLC in the Natural State, check out our simple instructions below on starting an LLC in Arkansas.
In Arkansas, you’ll interact with the Arkansas Secretary of State’s Business and Commercial Services division to form an LLC. The first step is to give your LLC a name. After that, you’ll choose a registered agent and file your articles of incorporation. We’ll also discuss the importance of establishing an operating agreement and how to apply for an Internal Revenue Service Employer Identification Number (EIN) (IRS). In addition, we’ll demonstrate how our recommended LLC services can help you simplify the formation process.
Let’s start with a comparison table between Arkansas and its neighboring states as a place to start an LLC.
|LLC Filing Fee||$45||$100||$50||$50||$130.38|
|LLC Annual/Biennial Fee||$150 (every year)||$25 (every year)||$0 (no fee and no information report)||$0 (however, an information report must be filed every year)||$89.34 (every year)|
|Corporate Tax Rate||1-5.9%*||4.00%||4.00%||4.00%||5.60%|
|Nominal GDP per capita||$47,770||$51,861||$58,356||$42,411||$64, 773.08|
Before You Set Up An LLC In Arkansas
The rules for founding a limited liability company vary by state. You will need a good understanding of the state regulations for LLC creation if you’re starting a firm or incorporating an existing one.
Here are the requirements for starting an LLC in Arkansas:
- A limited liability company’s name must finish in “Limited Liability Company,” “Limited Company,” “LLC,” “L.L.C.,” “LC,” or “LC.” The words “Limited” and “Company” can be shortened as “Ltd.” and “Co.” respectively.
- A minimum of one shareholder is required to form an LLC.
- Limited Liability Companies must contain the name and address of a registered agent in Arkansas who has a physical address (no PO boxes). During regular business hours, the registered agent must be ready to accept the company’s vital legal and tax paperwork.
How Much Does It Cost To Start An LLC In Arkansas?
Legal business registration comes with some costs. Some of these expenses must be paid to the Arkansas Secretary of State and others to state agencies or the federal government. The most typical requirements and fees are listed in this article.
Please keep in mind that Arkansas business license and permit fees may be due when you first start your firm, on a regular basis, or on an as-needed basis. More information is available below.
- The Arkansas Secretary of State charges $45 for filing Articles of Organization online and $50 for filing them by mail.
- You can reserve your LLC name for $25 if you file by mail or $22.50 if you file online with the Arkansas Secretary of State.
- Arkansas LLCs must additionally pay the state a minimum annual franchise tax of $150 each year.
The costs associated with starting an LLC are Secretary of state charges, reservation of name charges, and annual franchise tax.
A common question is how to start an LLC in Arkansas for free. Unfortunately, getting a free LLC is not possible due to the state filing fee.
Steps To Start An LLC In Arkansas
Creating an LLC in Arkansas is easy. To form an LLC in Arkansas, follow these steps:
Pick A Name For Your LLC
The first thing you’ll need to do is pick a name for your Arkansas LLC. The state of Arkansas permits you to reserve a company name for 120 days for a fee. You can use Arkansas LLC Search to check for the availability of the name.
There are certain rules you need to follow when picking your name:
- The name must include the phrase “limited liability company” of one of its abbreviations.
- You can’t use words that might confuse your business for a government agency. (ex. State, Department, Treasury, etc.)
- You can’t use names that could confuse you with any other Arkansas business.
Find A Domain
You’ll need to search for a domain name at this point. A domain name is your company’s website address. It might also be your official email.
You can use our brand name generator to find the right domain name for your LLC.
Get A Fictitious Name (DBA Name)
It is required that you submit an Arkansas application for a Fictitious Name known as a DBA name to the Arkansas Secretary of State.
DBA name filings in Arkansas are overseen by the Arkansas Secretary of State’s Business and Commercial Services Division. Applying online costs money, and applying by mail costs more.
DBA names can be registered by mail or online. If we exclude Pulaski County, you must submit a copy of the application to the clerk of the county where your registered office is situated and also to the state.
Consider A Trademark
Finally, you should check into trademark registrations for your LLC name. In order to protect your company’s name and image, you must register a trademark.
Your name is used in advertising and marketing to distinguish your products or services. For further protection, you may register your trademark in Arkansas and with the USPTO.
The state registration is $50 and lasts five years. State trademark registrations are simpler and faster, but federal registrations provide greater protection, which is helpful for firms looking to expand outside Arkansas.
Visit this link to know more about the Arkansas naming rules.
Find A Registered Agent In Arkansas
You must appoint a registered agent for your LLC in Arkansas.
A registered agent is a person or company authorized to receive service of process and other official legal documents and notices on behalf of your LLC.
A registered agent might be a person (such as yourself or an employee of your LLC) or a company that provides this function. They must fulfill the following requirements:
- Registered agent services must be a person or legal entity.
- The agent must have an Arkansas address.
- During regular business hours, the agent must be on-site and ready to accept documents.
You can choose one of the following for the registered agent services:
|ZenBusiness – $49 + state fees to register your LLC (read review)|
|Incfile – $0 + $50 state fees to register your LLC (read review)|
Articles Of Organization
The Articles of Organization is a legal document that provides basic information about your limited liability corporation (LLC). When forming an LLC in Arkansas, you will need to file your Articles of Organization (Form LL-01) with the Arkansas Secretary of State once you’ve acquired all the information for your Arkansas LLC.
This process includes filling out an online form or sending it via email. The filing charge is $45 online, and a $50 fee if you opt to file in a paper form.
You will need the following information to fill out this form correctly:
- Name of your LLC
- The principal address of your LLC.
- The registered agent’s name, address, and phone number
- Whether the LLC will be handled by members or by a manager
- Authorized person’s name(s) and signature(s).
Receive A Certificate From The State
After the LLC’s formation documents are filed and approved, the state will provide you with a certificate confirming the LLC’s formal existence.
The LLC will be able to obtain an Employer Identification Number (EIN), business licenses, and a business bank account with this certificate.
An operating agreement serves as a “handbook” for how you’ll run your business.
Although it is not needed in Arkansas, it is strongly recommended. It defines how the LLC will be administered. As a result, it puts the control of the LLC in your hands.
Your LLC will be governed by state law if you don’t have an operating agreement. It might sound like a huge job, but it is quite easy to create an operating agreement. There are lots of different templates available, some paid and some free.
Additionally, It outlines critical aspects of business, such as:
- The initial investment of each member in the company
- Who will manage the company?
- Distribution of profits
- Dissolution of LLC
- What will happen when a member departs from the LLC?
- Voting rights of each member.
Obtain An EIN
You’ll need an EIN to identify your LLC to the IRS if the LLC has more than one member.
This requirement is obligatory even if there are no employees in the LLC. However, things change when you form a one-member LLC. You will need an EIN only if it will have employees or for tax purposes, you opt to establish it as a corporation rather than a sole proprietorship.
This number is used when filing and paying taxes, as well as providing payroll information and payments for your employees by creating a business bank account.
The forms you need to register an LLC in Arkansas
All the forms you need to register an LLC in Arkansas are listed here.
You can find all the information you need on the Arkansas Secretary of State’s Business and Commercial Services division website. The website also includes all necessary forms.
Did you know?The LLC emerged as a business structure in Arkansas in 1991 and became very popular. It gives you the liability protection of a corporation. The formation of an LLC is much easier and comes with flexible tax and management policies.
LLC taxes in Arkansas
An LLC is subject to both Federal and state taxes. The primary distinction between federal and state taxes is that federal taxes are collected by the federal government, whilst state taxes are collected by the state government.
There is a requirement of filing a minimum $150 tax per annum and an annual report to the Arkansas Secretary of State. Both these things accumulate to become the Annual LLC Franchise Tax Report. The franchise tax report is due every year on May 1st.
Which additional taxes and forms are owed depends on your sector, where your LLC is situated, how the IRS taxes you, and whether you have workers.
You must register with the Department of Finance and Administration since you are conducting business in Arkansas. Besides, you can register by mail with the AR-1R Combined Registration Form or online with the Arkansas Taxpayer Access Point (ATAP). Before registering, make sure you have your IRS EIN number.
Major taxes and forms that are payable include:
- Sales Tax
- Employer Taxes
- Income tax
- Partnership and LLC tax
- Local taxes
- Miscellaneous tax
- Income withholding tax.
How long does it take to form an LLC in Arkansas?
Online LLC filings in Arkansas typically take 2-3 business days, while mailed filings take 2 weeks. For an extra cost, expedited processing is also available.
How much does it cost to run an LLC in Arkansas?
There are two types of costs you have to bear when forming an LLC in Arkansas. They are:
- LLC filing fee — It is a one-time fee of $45 paid to the state for registering your LLC. If you are filing by mail, it will cost you $50.
- LLC annual fee — The LLC yearly fee is a recurring payment made to the state to keep your LLC in good standing. In Arkansas, you must pay an LLC annual fee of $150.
What should you do after formation?
Registering your LLC provides you with a legal base from which to conduct business, but it is not the end of the process. It is the beginning of a long process called running the business. Following are some of the major things that everyone should do after setting up a business.
- Creating a logo for the business is very important because it is the first impression of the company on its customers. It should be selected very carefully and thoughtfully.
- A business is incomplete without a website or online store. Ideally, this should be in place before you incorporate your business.
- A separate business bank account should be opened and used only for business-related transactions.
- Business insurance allows you to control risks while focusing on building your company. There are many types of insurance, but the most common and essential are Professional Liability Insurance, Workers’Compensation Insurance, and General Liability Insurance.
- Annual reports should be used to determine whether the business has made a profit.
- Make sure to keep your personal and business finances separate.
Resources to start a successful LLC in Arkansas
Your success is the state’s success, whether you’re a native Arkansan or a newcomer. Here are a few resources to assist you in launching a business in Arkansas.
- The Arkansas Small Business and Technology Development Center has seven locations throughout Arkansas and offers consultancy, marketing research, in-person seminars, and webinars (both live and archived).
- Little Rock SCORE provides free mentorship, local training, and internet services to small businesses in the Little Rock area.
- The Resource Guide for Small Businesses, published by the Federal Reserve Bank of St. Louis, contains a wealth of information for new businesses in Central Arkansas. The resources are aimed at the following 11 Arkansas counties: Garland, Faulkner, Conway, Grant, Hot Spring, Saline, Jefferson, Lonoke, Perry, Pulaski, and White counties are among the most populous in the state.
- Eventbrite is a terrific place to look for business events in your region. You can go to various events to help your new business succeed, from networking to seminars.
- The US Small Business Administration’s Arkansas District Office is your one-stop shop for state and local business information, business news, success stories, small business loans, and more.
- The Arkansas Secretary of State’s service and the Arkansas Business Startup Wizard guide entrepreneurs through the essential phases of starting a business in Arkansas.
- Finally, the Arkansas Department of Finance and Administration website contains several useful forms and documentation for Arkansas companies.
How to dissolve an LLC in Arkansas
You will have to follow the three major steps when you want to dissolve your LLC:
- Follow the terms of your LLC operating agreement.
- Close your company’s tax accounts.
- Fill out and submit the Arkansas Articles of Dissolution.
Forming an LLC in Arkansas is very easy. You have to first pick and reserve a name for the LLC. Find a registered agent and file your articles of organization. Once the documentation is complete, the state will provide you with a certificate confirming the formal existence of the LLC.
Then you have to obtain an EIN from IRS and create an operating agreement for your business.