Arkansas has a friendly and welcoming atmosphere for small business owners and is home to some of the largest companies in the world. Arkansas is also centrally located in the United States which makes it the ideal location to expand toward the East and West coast. Most think that starting an LLC in Arkansas is a complex and challenging process. This guide breaks down the steps to get an LLC up and running in no time.
What are the benefits of an LLC?
- LLCs provide liability protection for business owners, meaning that the owners’ assets will not be at risk.
- Easy to set up and manage
- One person may form an LLC
When do you need to form an LLC?
If you are exploring starting a business or perhaps you are already in business as a sole proprietor it is a good idea to form an LLC. If you are operating a business without an LLC you could be placing yourself and your personal assets at risk.
While it is not required to form an LLC before starting a business the benefits include accounting and tax standardization, limited liability risk right away, and it will be easier to stay organized since all of your business-related expenses will be tied to one business bank account.
Step 1: Choose your company name
The first step in starting an LLC is to select a business name. It is essential to choose a business name that is unique from existing entities.
Perform an Arkansas business name search
The Arkansas Secretary of State maintains a database of business entities registered in the state that is free for the public to search.
Visit sos.Arkansas.gov to begin a search.
Your Arkansas corporation must contain the words Limited Liability Company or include the abbreviation L.L.C. or LLC. Prefixes, suffixes, and plural versions of an existing entity name do not make it unique.
If you want to start a BBQ restaurant called “BBQ Shack LLC” you will want to make sure there is not a similar-sounding name like “BBQ Shack House LLC” or else your name may get rejected by the Secretary of State. The intention behind the naming rules is for businesses to create names that are uniquely identifiable from other existing active names so consumers will not get confused.
One great way to come up with unique business names is to use a business name generator.
Perform a trademark search
Perform a trademark search before selecting your Arkansas business name. To protect yourself, avoid using a trademarked or similar name to an existing business.
Find out if your proposed business name is available by conducting a trademark search online at the US Patent & Trademark Office.
If you want to use the same name as another state or country, check with that jurisdiction to make sure the name is available.
Determine if you want to use a DBA name
A DBA is a registered “Doing Business As” name and can be used instead of the legal LLC business entity name.
A DBA allows you to have a name for your business that reflects what it does or who its customers are. Business owners use their company’s DBA names on checks, orders, contracts, and correspondence when doing business.
Some of the main benefits of a DBA:
- Flexibility: If you have your LLC established, you can use DBA names instead of creating separate entities for each new venture.
- Branding: A DBA name is easier to brand and identify for customers.
- Expansion: It is easy to file DBAs in different geographical locations to target other customers and appear hyper-focused in your marketing.
You do not need to operate under a DBA if you use your Arkansas business name for all business purposes. However, using a DBA name will not affect your Arkansas LLC name registration.
Register the domain name
Once you decide on a business name, check to make sure that the domain name is available. Sites like Namechk can show you which domain extensions are available for your business name.
Although .com domain names are ideal, as the internet ages extensions like .net, .co, and .biz are becoming more commonplace
Register social media profiles
It is vital to have a solid social media presence in today’s business environment. Be sure to register for your business name on the different social media platforms ahead of time so that no one can sign up for them.
Reserve Arkansas business name
The Name Reservation form can be downloaded and filed online through the Secretary of State online services business portal.
Step 2: Register Arkansas LLC
After choosing a name, start the registration process online at the Arkansas Secretary of State site.
Registering your LLC in Arkansas is a fairly straightforward and quick process:
Select a registered agent
A registered agent is an individual point of contact for the state-designated to receive official correspondence from the state.
A registered agent is required for an Arkansas LLC. If you are not personally going to be your Arkansas LLC’s registered agent, find a substitute Arkansas resident or company to serve in this role.
Be sure that the registered agent’s address is included in all your business documents and correspondence if you intend to use a different registered office.
Arkansas registered agent requirements
Arkansas registered agent:
- must be over the age of 18
- have a physical street address in the state of Arkansas
- be available during normal business hours
Fill out Arkansas Articles of Organization
Once a registered agent has been selected, the next step to filing an Arkansas LLC is to fill out the Articles of Organization. The Arkansas Certificate of Formation is referred to as an Articles of Incorporation in other states.
The Articles of Organization contains the following elements:
- Name of LLC: Fill out the business entity’s name and be sure to include the words “Limited Liability Company” or the abbreviation “L.L.C. or LLC.”
- Address of the LLC: Fill out the principal place of business address
- Name of Registered Agent: Fill out the registered agent’s name that will be responsible for business correspondence.
- Registered Office Address of Registered agent: Enter the registered office address and be sure not to use a p.o. Box as the Secretary of State will not process the certificate of formation.
- Management Structure of the LLC: Select if the management will be managed by the manager of member structure.
- Name and Title of One Officer: One officer needs to be listed on the Articles form
LLC Franchise Tax Form
At the bottom of the Articles of Organization form, there is additional information that must be added to the Franchise Tax section. This information is required for Arkansas LLCs so that they receive their annual franchise tax reporting form.
The Form Requires the following information:
- LLC Name
- Contact Person
- Phone Number and Email
- Tax ID
File the Articles of Organization
The Articles of Organization can be filed online or through the mail.
File Online directly through the Arkansas Secretary of State Online Services portal.
File the formation documents by sending the Certificate of formation along with the Name Reservation form to the Secretary of State address:
Arkansas Secretary of State
1401 W. Capitol Suite 250
Little Rock, AR 72201
Step 3: Next steps after filing Arkansas LLC
Apply for an EIN
The IRS requires each LLC to have its own unique employer identification number. The Internal Revenue Service website can generate a federal tax identification number. An EIN makes it easy to file your business taxes and stay in compliance with the IRS and is similar to a Social Security number for your business.
EIN’s also add credibility to your business and are required for compliance purposes from time to time by companies that have to pay you for goods and services. An EIN is also required to open a business bank account and will help you establish business credit in the event you need to take out a business loan.
Start a business bank account
A business bank account is required for LLCs to start conducting business. Therefore, it is highly recommended that you start a low-risk bank account to start receiving income and paying any start-up expenses.
After the LLC has been established, your business bank account will be used for payroll, payment of bills, a deposit of earnings from your business, and any other financial transactions your business may have.
Apply for a business license and permits
If you are planning on selling goods or services in the state of Arkansas, be sure to check out the Arkansas.gov site to check for county requirements. The local country probate offices issue licenses and requirements differ from county to county.
Prepare an LLC operating agreement
An operating agreement is a contract between the LLC owners that lays out the financial and functional decisions of how an Arkansas LLC will be managed by its owners. An operating agreement is needed if there are multiple business owners of an Arkansas LLC.
An operating agreement can be as simple or in-depth as desired, but it is important to have one in writing before starting any significant operations within the business.
File annual franchise tax form
An Annual franchise tax form is required for businesses in Arkansas to stay in good standing with the state.
There is no fee to file and you can file through the Arkansas Secretary of State.
How much does it cost to file an Arkansas LLC?
The state filing fee for an Arkansas domestic LLC filing is $45 online and $50 by mail. The Foreign LLC filing fee is $150. The Cost to file an Arkansas Name Reservation cost is $22 online and $25 by mail.
Recommended LLC formation services
- Northwest Registered Agent: Started as a registered agent service but expanded into business formations and offered additional professional services like mail forwarding and virtual business address services.
- ZenBusiness: Another recommended online business formation platform that can help set up an LLC in Arizona. They offer a full suite of services for new business owners, including operating agreements, business websites, domain names, and more.
- Incfile: A top online incorporation service provider in the market that offers various business filing services like LLC formation, Registered Agent, State Filings, and Compliance Filings.
Arkansas LLC FAQs
Is Arkansas a business-friendly state?
Arkansas has a low cost of living and a low regulatory environment that make it a great place to start a business.
What is the difference between a foreign and domestic Arkansas LLC?
– Domestic LLC
Domestic LLCs are entities that are based and operate in Arkansas. A Domestic Articles of Organization form is required for domestic entities.
– Foreign LLC
A Foreign Professional LLC Application for Registration must be filed by businesses that intend to transact business in Arkansas while being based in another state. In addition, foreign entities must file a Foreign LLC Certificate of Registration form with the Arkansas Secretary of State.
How do I get my Arkansas sales tax number?
Arkansas sales tax identification numbers can be generated from the Arkansas Department of Finance and Administration.
How many small businesses does Arkansas have?
Arkansas has over 255,000 small businesses according to the most recent data from the U.S. Small Business Office of Advocacy.
Below are some of the most popular industries for small businesses in Arkansas:
Industry / Small Business Employment
– Health Care and Social Assistance — 88,839
– Accommodation and Food Services — 71,917
– Retail Trade — 52,888
– Manufacturing — 40,832
How many businesses are filed in Arkansas each year?
According to the U.S. Census Bureau, business formations in Arkansas have been steadily increasing in recent years which resulted in 58,268 new business applications filed.
Below is a chart that has shown continued growth of businesses that are filed in Arkansas each year:
Year / New Arkansas Businesses Formed
– 2020 — 32,072
– 2019 — 25,371
– 2018 — 25,678
– 2017 — 23,135
What is the processing time to file an Arkansas LLC?
Arkansas LLCs’ processing times are around 48 hours due to the heavy amount of filings in the last year. The effective date of the organization is the date it is received by the Business and Commercial Services division.
What is an Arkansas Certificate of good standing?
An Arkansas certificate of good standing is a document that an Arkansas LLC receives from the Arkansas Secretary of state. The certificate of good standing is used to affirm that the company complies with the terms and conditions that formed it and reaffirm the information from the certificate of formation. The cost is $25 and is available download from the Secretary of State website.
How do I change officers of an Arkansas LLC?
Officer changes can be completed through the Secretary of State website by filing an amendment form.
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