If you’re forming a small business in Arkansas, a Limited Liability Company (LLC) is one of the best business structures you can choose. An LLC provides the owners (known as members) legal protection from any legal action toward the business, and vice versa.
If you live in Arkansas or intend to do business there, you need an Arkansas LLC. Arkansas makes the process simple, filing fees are low compared to some other states, and even their annual taxes are reasonable. If you’re ready to form your Arkansas LLC, simply follow the steps in our guide below.
The first step is also usually the easiest and the most enjoyable, and that’s picking a name for your Arkansas LLC. Your LLC name won’t always match your brand name, but it’s still important to choose a name that feels like a good fit for your business.
All Arkansas LLCs must have a name that is distinguishable from any other business operating in the state. You can check if your preferred name is available on the Secretary of State’s business name database. Note that if your preferred name is taken you’ll need to think of one that’s obviously different from the taken name.
For example, if you were going to call your business Littlewood Fabrics, but you found it was already taken, you couldn’t call it Littlewoods Fabrics, because it’s too similar.
Your business name must also include a designator on the end to show it is an LLC. You can choose from:
If you are a professional (such as an attorney), you need to include the word “professional” in your designator. You can choose from:
Your name cannot include any misleading language, such as association, corporation, bank, state department, or similar.
You cannot include a name in your LLC unless that person is an active or deceased member of the business.
Now is also a good time to check that your preferred website address is available if it’s going to match your LLC’s name. Buy your domain name at the same time as you register your LLC so you don’t miss out on your preferred domain.
Arkansas does not require you to reserve your name before you form your LLC, but if you’re not going to be going through with the rest of this process but have already found an available name, you should consider it.
You can reserve your LLC’s name for 120 days by filing an Application for Reservation of Limited Liability Company Name online ($22.50 filing fee), or by mail ($25 filing fee). Filing online is more convenient and more affordable.
All LLCs, regardless of which state they’re registered in, are required to have a registered agent in the state. A registered agent is the person (or business) who receives legal documentation on behalf of your LLC. This will mostly be tax information and government notices, but it can include legal summons if your business is sued.
The registered agent must have an Arkansas address that’s available to receive mail during normal business hours, Monday through Friday. You cannot use a virtual mailbox or PO Box.
If you live in Arkansas, you can be your own registered agent. You can also choose a friend, family member, or commercial registered agent. Your registered agent’s address will be available to the public, so many LLC owners choose to pay for the service of a commercial registered agent so their own address isn’t easily found online.
A commercial registered agent will allow you to use their address on your legal documents and will forward any mail to you electronically or physically. Most registered agent services cost around $15 a month for basic mail forwarding, though they often have other services available at a higher cost.
Deciding whether or not to be your own registered agent can be a difficult decision for single-member LLCs, so read our guide on the pros and cons here. If you decide a commercial registered agent is the right choice for you, we can be your trusted agent in Arkansas. Simply contact us and we’ll give you the information you need to continue with your business formation.
With those basics covered, you’re ready to do the exciting step of making your business official. To do so, you need to file your Articles of Organization (called a Certificate of Formation in some states) with the Arkansas Secretary of State. That may sound intimidating, but it is a straightforward process.
You can file your Articles of Organization online or by mail. It costs $45 online or $50 by mail. The information you need ready in order to fill in your forms includes:
To file your Arkansas LLC online go to the Corporations Online Filing System and scroll down to “Certificate of Organization for Domestic LLC”, which has a large “Start Form” button beneath it.
To file your Arkansas LLC fill in Form LL-01 and send the form to:
Arkansas Secretary of State
1401 W. Capital Ave.
Little Rock, AR 72201
Arkansas has a guide that will take you through filling in the form in detail - you can find that here.
If you are filing a Foreign LLC (which means your current LLC was formed in another state and you are now registering so you can do business in Arkansas), the process is the same, but you’ll need to file a different form. Go to the same Corporations Online Filing System but scroll down to “Foreign LLC” and click on the first link “Certificate of Registration for Foreign LLC.”
It is more expensive to file a Foreign LLC - it costs $270 to file online or $300 by mail.
Arkansas usually processes LLC formations quickly, often taking less than 24 hours, but more commonly taking 2-3 days. Filing by mail will extend this time to 1-2 weeks.
Once you receive your approved copy of your Articles of Organization, your business is a legal entity that is legally able to start doing business. Continue now to get your business ready to start trading.
An operating agreement is not legally mandated in Arkansas, but not having one can get you into trouble. An Operating Agreement is a document that outlines how the business will be run, how much each member owns, what they invested in the business, and so on.
Your operating agreement should include:
In essence, it should include anything that will help in the event that there are any internal legal issues in the future.
Now your business has its official Articles of Organization, you can apply for your business’s EIN. An EIN is a tax ID number that works like a Social Security Number for your business, and it allows you to hire employees, pay taxes, and get a business bank account.
Getting an EIN is simple, free, and instantaneous; apply for your EIN on the IRS website: Get Your EIN. When your form is complete the EIN will be generated for you.
You can also apply for your EIN by mail, but be aware that it will take up to 4 weeks for you to get your number. Use Form SS-4 if you need to do this.
All Arkansas LLCs must pay a minimum of $150 each year in taxes. That means even if you are not actively trading, you’ll still need to pay this tax. The payment must be made each year by May 1.
This payment must come with an Annual Franchise Tax Report. This tax report determines how much tax you have to pay and confirms if your current LLC’s registered information is correct.
You can find out more and file your Arkansas state tax here.
There is no state-wide required business license, but you may need to seek some in order to operate your business in Arkansas or your local area. Any business with employees and/or that will collect sales tax will need to register with the Arkansas Department of Finance Administration (DFA), which is often referred to as a “seller’s permit.”
Other licenses in Arkansas are given on a city or county level, so go to your local government website to find out if you need any other licenses or permits to operate.
Your next step is to acquire a business bank account - this is not a legal requirement but since you chose a business structure that is designed to protect your assets from your business and vice versa, you need to separate them to see those benefits.
Now your business is registered and you’ve got your EIN you can apply for a business bank account so you can keep your assets separate. It may not seem like something you need to get started, but you’ll thank us if you do come tax time!
This step is often overlooked by many; it is a legal requirement to keep certain documents at your business’s principal address, regardless of size. If you’re a single-member LLC working from home, you won’t need to do anything to meet these requirements, but if your principal address is elsewhere you’ll need to keep this in mind.
The documents you need to keep are:
With all these steps covered, you’re ready to launch your Arkansas LLC and start finding success.
Forming your Arkansas LLC is straightforward, but it is time-consuming, especially if you’re not used to all the jargon government websites so often use. Instead of spending the precious early days of your business creating your products or creating the foundation for your marketing, you may spend it filling in forms and looking up terminology.
The good news is this can all be avoided by allowing us to handle your Arkansas LLC’s formation. We’ll register your LLC’s name, acquire your EIN, and can even be your registered agent. To get started, fill in this short form and we’ll do the rest.