Should you form your corporation in Arkansas? We've collected the relevant information that will help you make this decision.
- Tax rate of 1-6.5%
- Low cost of doing business
- Low cost of living
- Forming a corporation may result in higher taxes
Cost of doing business
- $60 filing fee / $150 annual statement
- No disclosure of owners
Forming your corporation in Arkansas
In order to communicate to the public that your new business is incorporated, its official name will need to end with one of the following signifiers (or a relevant abbreviation): “incorporated”, “Company”, or “corporation.” In addition, it is required that the name of your business is not intentionally misleading to consumers, for any reason. Your company’s new name must also be completely unique, and not deceptively similar to any other organizations name or trademarks. Do a FREE name search now.
Board of directors requirements
You will need to form an official board of directors when incorporating in Arkansas. Here are the states explicit regulations regarding these directors:
- Required number of directors
Arkansas corporations must have at least three directors, but are able to operate with only two n the event that there are only two shareholders. However, there can never be less directors than shareholders if this exception is being employed.
- Age restrictions
Directors of corporations located in Arkansas can be of any age.
- Residence restrictions
There are no residence restrictions imposed on the directors of C corporations in Arkansas. However, S corporations are only allowed to have directors located in the United States.
- What information needs to be included in the Articles of Incorporation?
Arkansas does not require the names or addresses of directors to be disclosed in incorporation documents.
Requirements for the Articles of Incorporation
The Articles of Incorporation is a document that must be filed during the incorporation process in every state. Here is the information that must be included in this document when filing in Arkansas:
Arkansas requires the number of initial shares outstanding, and their par value, to be disclosed during the incorporation process. The number of outstanding shares does not affect initial state filing fees.
The state of Arkansas does not require officer information to be disclosed during the filing process.
Registered agent information
All Arkansas corporations must have a registered agent on file, and submit their name and address (which cannot be a PO box). This agent will be required to be accessible during standard business hours, and act as the state’s point of contact with the company. Learn more about registered agents.
If your business is a professional practice
Professional service corporations are permitted to form under the professional corporation (PC) structure.
Corporate record keeping requirements
Corporations are required to keep formal documentation regarding several of their operations. These are the explicit record keeping formalities required by Arkansas:
- A copy of the Articles of Incorporation, bylaws, and their amendments
- A list of all shareholders
- The business address and names of all officers and directors
- Meeting minutes for all shareholder meetings.
- A copy of all written communications with shareholders within the previous three years
- A copy of the corporation’s most recent annual franchise tax report
- Formal documentation of all resolutions by the board of directors
Arkansas corporate taxation and fee requirements
There are several tax and fee requirements that must be addressed by corporations in Arkansas. They are as follows:
All states have complex taxation requirements. For more information regarding taxes in Arkansas it is advised that you visit the state’s official business related website.
Annual report requirements
Corporations in Arkansas are required to file a Franchise Tax Report by May 1st each year. The minimum tax imposed is $150, and is determined by the size of the organization. Learn more about annual reports.
Tax identification numbers
Arkansas requires an EIN (employee identification number) for all corporations that will have employees, and most banks will require one to open accounts. Arkansas does not require corporations to obtain state tax ID numbers. Learn more about EINs.
Business license requirements
The business licenses and permits required in Arkansas vary wildly depending on the county or municipality in which your new corporation is located. If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
S corporation election
Arkansas does require a state-level S corp election, but they also recognize any elections held at the federal level.
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