How to Start an LLC In Arkansas: Your Ultimate Guide
Follow our free guide on how to start an LLC in Arkansas:
To make the Arkansas LLC filing process easier, check out our comprehensive guide on setting up an LLC in Arkansas.
Phase 1: How to Start an LLC in Arkansas
Forming a new LLC in Arkansas may seem like a difficult task, but the process is not as hard as you think, especially when you have the right kind of help.
Here are the steps needed to start your Arkansas LLC:
Only 10 Minutes Required!
1. Name Your Arkansas LLC
Picking a business name is an important part of getting an LLC in Arkansas. Before you settle on a specific company name, there are a few state and federal guidelines to keep in mind:
Tip: Use a free business name search tool to ensure your company's desired name is available.
Business Name Guidelines
The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C
Your business name cannot be intentionally misleading to consumers
The name of your new LLC must not be similar to another organization's name/trademark
Restrictions
A few restrictions do exist regarding the name of your LLC, depending on the state where you are starting your business.
A few examples include:
“Lottery” and “Bank” are ineligible for use (any state).
Terms that represent educational or Veterans' organizations are restricted.
Terms related to the Armed Forces or civil servants (police, EMT, fire).
URL Availability
Create an online presence for your LLC by creating a website. You can easily check the availability of your domain names at a variety of online web services sites.
2. Establish Ownership
The owners of an LLC are called either members and managers. Depending on the management structure of the LLC, all LLCs will have members, but not every LLC will have managers.
LLCs generally have two management structures:
Member-managed (ownership of the business is divided among the members and all parties receive portions of the profits)
Manager-managed (the appointed manager is the main operator and the members are passive investors who are not actively involved in the daily business operations)
After you have selected a name for your business, you need to choose a management structure and designate the members of the LLC. The rules concerning LLC ownership in Arkansas include:
Required Number of Members
Arkansas LLCs must have at least one member or manager to form a business.
Member Disclosure Requirements
You do not disclose LLC members in the filing paperwork. An organizer/authorized representative may sign and file the Articles of Organization in place of members.
Age Restrictions
LLC members in Arkansas may be of any age. An organizer must be at least 18 years old.
Residence Restrictions
There are no residency restrictions imposed on LLC members in Arkansas.
3. Find a Registered Agent in Arkansas
Arkansas LLCs must select and appoint a registered agent and submit the agent's contact information (must be a physical address/not P.O. box) to the state. This person/office is required to operate during standard business hours and act as the state's point of contact with the business.
What is a registered agent?
A registered agent is a person or business who is authorized to accept official government notices (including the Secretary of State) and service of process notices on behalf of the LLC.
Why do you need a registered agent?
Arkansas state law requires all businesses to have a registered agent so that the Secretary of State's office has a consistent contact person for businesses. This position is beneficial for LLCs that do not have a physical address.
Who can be a registered agent in Arkansas?
The requirements to be a registered agent are as follows:
A resident with a physical address in Arkansas
An LLC or corporation that is licensed to conduct business in Arkansas
Please Note: It is also possible for you to be your own registered agent as long as you use a physical address.
Why you may not want to be your own registered agent
Because the registered agent's name and address are a matter of public record, LLC business owners who choose to be their own registered agent risk compromising their personal information.
Tip: Avoid the hassles and choose Swyft Filings' registered agent services to fill the registered agent needs for small businesses in Arkansas.
4. File the Articles of Organization
Filing the Articles of Organization is the most important step in officially forming an LLC in Arkansas because it allows your business to be legally recognized by the Secretary of State.
What are Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the state government to officially and legally form your LLC.
Why do I need the Articles of Organization?
Without filing this document, the Secretary of State will not legally recognize your LLC business in Arkansas. Consider the Articles of Organization as part of your LLC's foundation.
What is the cost of filing the Articles of Organization?
The filing fee for Arkansas is $50.
What information is included in the Articles of Organization?
This vital document includes the following:
The name and address of the LLC
The name of the organizer filing the paperwork
The name and location of the registered agent
The chosen LLC management structure
The duration of the LLC
Additional Arkansas Filing Requirements - Professional Service Businesses
Arkansas allows professional service businesses to form a specific type of LLC known as a Professional Limited Liability Company (PLLC).
The following professions generally form a PLLC:
Accountants
Attorney
Physicians and Dentists
Professional Counselors and Psychologists
Architects and Engineers
Veterinarians
Please Note: There are specific regulations for medical professionals seeking to form a PLLC.
A few points to consider:
All members of the PLLC must be licensed in the profession of the business.
The PLLC is only allowed to provide services for which the business was formed.
The members are still subject to whichever licensing boards govern the PLLC's profession.
5. Create an LLC Operating Agreement
It is not a requirement to have an Operating Agreement for an Arkansas LLC; however, this document is still considered necessary for any successful business.
What is an LLC Operating Agreement?
The LLC Operating Agreement is a legal document that defines the details of the business's operations and the rights and responsibilities of each person involved in the business.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement adds stability and structure to the business by stating the members' roles and providing direction for daily operations. The agreement also reduces future disputes among the members.
Do I need to file the LLC Operating Agreement?
You do not need to file the Operating Agreement with the state; it is for the benefit of your LLC and remains in-house.
What goes into an LLC Operating Agreement?
Most Operating Agreements will include the following the information:
List of the members/managers and their roles
Designation of authority in the LLC
Initial capital contributions of the members
Voting designations and percentages of the members
Member transfer/addition rules and restrictions
Distribution of profits
Meeting schedule
Tip: Get a customized LLC operating agreement for your small business with Swyft Filings and add structure to your LLC.
6. Register for an EIN
Arkansas requires an EIN for any business that has/will have employees. Additionally, most banks and financial institutions require the EIN to open any accounts for the business.
What is an EIN?
The EIN is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS). It identifies your business with the government much like a personal Social Security number.
What does EIN stand for?
EIN is an acronym for Employer Identification Number. It is also known as a Federal Tax ID.
Are all businesses required to have an EIN?
Federal law dictates that certain types of business entities register for an EIN:
Any business with employees (even if owned by one person)
Any business with more than one member
A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
Why does my LLC business need an EIN?
The more common reasons you would need an EIN are:
To hire employees
To open a bank account in the U.S.
To file your company’s taxes
To pay independent contractors
In short, if you make money through your business and have employees, you must have an EIN.
Is the EIN publicly listed?
The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN?
You can use your social security number; however, your EIN is part of public record.
Swyft Filings offers EIN/tax ID services for small businesses in Arkansas.
Phase 2: Maintaining Your Arkansas LLC
Once the initial phase of your Arkansas LLC formation is complete, it's time to move on to the next phase that involves getting your LLC ready for business. The next few steps are:
1. Register for Arkansas State Taxes
All businesses in Arkansas (corporations and LLCs) are required to pay an annual franchise tax that is also connected to the annual report. The total due each year is $150.
Corporate Tax Information
The table below shows the corporate tax rates for Arkansas:
Additional Tax Information
Other taxes your LLC may need to pay:
Sales and Use Tax at 6.5%
Employee Withholding Tax
Unemployment Tax
2. Obtain Business Licenses and Permits
The business licenses and permits required in Arkansas vary on a number of variables:
Location (city and county)
Type of Business
Industry
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit our business license research package page.
3. File an Annual Report
Arkansas LLCs are required to file an annual report with the Department of State. The purpose of the annual report is to keep your business's information and status updated with the state.
What is an annual report?
An annual report, also called a periodic report, is a legal form filed with the Secretary of State on a periodic basis. It keeps your business's information current with the state.
What kind of information is in the annual report?
The information requested in the annual report is similar to the Articles of Organization.
The name and address of the business
The name and address of the registered agent
The business’s EIN
Is the annual report part of the public record?
The annual report filed on behalf of your LLC is a matter of public record.
Please Note: The annual report for Arkansas is filed in conjunction with the franchise taxes.
Fee: Included in franchise tax payment Due Date: May 1st Frequency: Every year Implications of Late Filings: $25 Late Fee
Swyft Filings helps you stay compliant by providing stress-free solutions. Use our annual report service today.
4. Obtain a Certificate of Good Standing
After your Arkansas LLC has been formed and is ready for business, there is still one last step—getting a Certificate of Good Standing.
What is a Certificate of Good Standing?
The Certificate of Good Standing is an official document from the government agency that confirms your entity has been properly filed and is still in compliance with all state regulations.
Who issues the Certificate of Good Standing?
The Secretary of State generally issues the Certificate of Good Standing.
When can I request a Certificate of Good Standing for my business?
After forming your LLC, you can request a Certificate of Good Standing through the Secretary of State.
Why do I need a Certificate of Good Standing?
You may need to prove that your business is fully compliant with the state and has a Certificate of Good Standing gives your LLC that backing. Additionally, many banks and businesses will require this document as part of the due diligence process.
Does the Certificate of Good Standing have an expiration date?
The Certificate of Good Standing does not expire and does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Arkansas LLC.
Starting an LLC in Arkansas: Recap
When you're ready to start your LLC, you can save time and money by completing each step accurately. Review the steps on creating an LLC in Arkansas discussed in this guide below to make sure you're on track for success.
Name your Arkansas LLC
Establish Ownership
Find a Registered Agent in Arkansas
File the Articles of Organization
Create an LLC Operating Agreement
Register for an EIN
Register for Arkansas State Taxes
Obtain Business Licenses and Permits
File an Annual Report
Obtain a Certificate of Good Standing
Setting Up an LLC in Arkansas: Pros and Cons
Pros
Growing Economy
Arkansas's economy has been steadily increasing as the state closed 2017 with a GDP at almost $125 billion. Six Fortune 500 corporations, including global magnate Wal-Mart, call Arkansas home. Additionally, the state is among the top 25 best states in the nation for business.
Low Cost of Living
The cost of living in Arkansas is well below the national average, by almost 20%. The median price for a home in Arkansas is only $120,000, compared to the national median price of $215,000.
Privacy for Owners
Arkansas does not require all of the names of members/manager of an LLC to be included in the Articles of Organization. In fact, an organizer (the party who prepares and files the paperwork) can submit the formation paperwork in place of the members.
Cons
High Poverty Rate
Arkansas currently has one of the highest poverty rates in the nation. With 17% of the state's residents living below the poverty level, businesses have much less opportunity to gain new customers.
High Crime Rate
The crime rate in Arkansas is almost 50% higher than the national average, especially in areas of theft and property crime. Little Rock is considered one of the more dangerous cities in the nation.
Cost of Doing Business
$50 Filing Fee
$150 Franchise Tax / Annual Report (Filed Together)
How Long Does it Take to Get an LLC in Arkansas?
It takes 2-3 business days to get an LLC in Arkansas if you file all of your paperwork online. Filing by mail is an option, but processing times for mail-in applications can be as long as 3-4 weeks. Currently, Arkansas doesn’t offer expedited filing processing.
How to Get LLC in Arkansas: Key Takeaways
With Arkansas' low cost of living and growing economy, it might be the perfect state for you to start and maintain your LLC. Keep this handy guide in mind during the incorporation process, and contact Swyft Filings if you have any questions.
How to Form an LLC in Arkansas: Related Resources
Guides for Other States
Don’t Just Take Our Word for It
Every day, business owners from all over the nation rely on Swyft Filings to help them file an LLC online and maintain their company.
Frequently Asked Questions
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Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
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