How to start an LLC in Arkansas

A limited liability corporation (LLC) provides liability protection and tax benefits to small enterprises, among other perks. Follow these easy steps to get your Arkansas limited liability corporation up and going after you’ve decided that an LLC is the most suitable business structure for your requirements.

You have the option of forming the LLC yourself or securing a professional company formation service to handle the legwork.

1. Choose a Name for Your Arkansas LLC

When choosing a name for a limited liability company (LLC) in the state of Arkansas, there are three primary rules that must be followed:

• The name of the limited liability company has to be different from the names of other businesses already registered with the Arkansas Secretary of State.
• The name of the limited liability company must include either the phrase “Limited Liability Company” or the phrase “Limited Company,” or one of the following abbreviations: “LLC,” “L.C.,” “LC,” or “L.L.C.” It is permitted to use the abbreviation “Ltd.” in place of the term “Limited,” as well as “Co.” in place of the phrase “Company.”
  • In Arkansas, the names of professional limited liability companies (LLCs) are required to contain the words “professional limited liability company” or “professional limited company,” or one of the following abbreviations: “PLC,” “P.L.C.,” “PLLC,” or “P.L.L.C.”
• The name of the limited liability company (LLC) cannot include the name of any person who is not a member of the LLC, with the exception of the name of a member who has passed away.

Make a name reservation for your LLC with the Secretary of State.

When you have decided on a name for your limited liability company (LLC), you can then reserve that name with the Arkansas Secretary of State. First, use the company name database maintained by the Arkansas Secretary of State to determine whether or not the name you have selected is available.

In the event that the name of the LLC is not already taken, you may submit an Application for Reservation of Limited Liability Company Name to the Arkansas Secretary of State in order to put a hold on it for a period of up to one hundred and twenty days. 

You have the option of submitting your paperwork either online (for a price of $22.50) or via the mail (for a fee of $25).

2. Choose your Arkansas Registered Agent

A registered agent in Arkansas is required of every limited liability company operating in the state. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.

It is possible for the Registered Agent to be either a resident of Arkansas or a legal organization that is permitted to do business in the state. It is required that the Registered Agent have a real, live street address in the state of Arkansas.

What exactly is the role of a Registered Agent?

A Registered Agent receives tax forms, legal paperwork, lawsuit notices, and formal government communication for your firm. Consider the role of your registered agent as that of the point of contact for your company with the state.

Who is eligible to serve as a Registered Agent?

A Registered Agent in Arkansas has to be either a person who lives in the state on a permanent basis or a company that is permitted to operate in Arkansas and acts in the capacity of a Registered Agent service. You have the option of selecting anybody who works for the organization, including yourself.

3. Publish your company’s articles of incorporation.

Your limited liability company (LLC) will be formally recognized after you have a document called the Articles of Organization that lays forth fundamental information about your business. Because this form serves as the legal registration for your company with the state, it is essential that all of the details be accurate.

What should be included in a company’s Articles of Organization?

When completing the Articles of Organization for your Arkansas limited liability company, you will need to supply the following information:

• LLC name
• The location of the primary office of the limited liability company.
• Whether the limited liability company (LLC) is managed by it’s own members or a management
• The name and address of the registered agent
• In order to do business in the state of Arkansas, foreign limited liability companies (LLCs) that were founded outside of Arkansas are needed to file with the Arkansas Secretary of State. The registration price for enrolling via the mail is $300, while the fee for completing the registration process is $270.

Submission of Your Organization’s Articles of Incorporation

The Arkansas Secretary of State requires that you submit Form LL-01 – Certificate of Organization in order to register your limited liability company in the state. You have the option of applying in person, online, or via the mail.

Please send all completed applications and money to the following address:

Arkansas Secretary of State, 1401 West Capital Ave, Suite 250, Little Rock, AR 72201

4. Pick up your Certificate From the Government

After the formation paperwork of the LLC has been submitted and authorized, the state will send you a certificate that proves the LLC’s official existence in response to a written request for a copy together with the appropriate amount of postage.

With this certificate, the limited liability company will be able to get an Employer Identification Number (EIN), as well as business permits and a bank account for the firm.

5. Compose your company operating agreement

Even while establishing a detailed LLC operating agreement is not a legally required step for founding a limited liability company in Arkansas, it is highly suggested for all new limited liability firms to do so.

The following items should be included in the operating agreement:

• Describe the business structure of the limited liability company.
• Determine the specific duties and commitments that each member of the limited liability company (LLC) 
• Structure of the LLC.

If a limited liability company (LLC) doesn’t have an operating agreement that spells out the exact responsibilities of its members, it could face major legal and organizational problems.

6. Obtain a tax EIN

A federal employer identification number, commonly known as a tax ID number, will be required of many limited liability companies (LLCs). An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service. You need an EIN in order to pay federal employer taxes, open a bank account (in most situations), or recruit staff.

On the website of the Internal Revenue Service (IRS), which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online. 

Single-member limited liability companies, which are an exemption to the rule that most firms are required to acquire an EIN, may instead use the owner’s Social Security number.

Business Licenses

Depending on the nature of their operations and where they are located, some limited liability companies (LLCs) doing business in the state of Arkansas may be needed to get one or more business licenses or permits from the state or from their respective municipal governments.

Review the Arkansas Start a Business Guide, which is made available by the Secretary of State, for information on how to satisfy the prerequisites for obtaining a state license to do business in the state. 

The Arkansas License Directory allows for the search and retrieval of specific license information. Contact the municipal or county clerk where your LLC is situated for local licensing requirements.

7. Meet Your Yearly Tax Obligations to the State

Each year, Arkansas’ Secretary of State requires a minimum tax payment of $150 from all Arkansas-based and overseas limited liability companies. Additionally, annual franchise tax reports are required to be submitted with the Secretary of State in Arkansas.

You have the option of electronically filing the yearly franchise tax report or downloading a report form from the website of the Arkansas Secretary of State. The annual franchise tax report, together with the tax payment of $150, is due on May 1 of each year. There are consequences for turning in reports that are late.

You are needed to register your business with the Arkansas Department of Finance and Administration under certain circumstances. For instance, if you will be selling items and collecting sales tax or if you will have workers, you will be required to do so (DFA).

Both online registration via the Arkansas Taxpayer Access Point (ATAP) and paper registration are acceptable methods for the majority of reasons (using Form AR-1R, Combined Business Tax Registration Form).

Costs and Steps

Costs

The Articles of Organization may be submitted electronically with the Arkansas Secretary of State for a price of $45; if they are sent in, the fee is $50. The Arkansas SOS charges $25 to reserve an LLC name by mail and $22.50 online.

In addition, Arkansas limited liability companies are obliged to file and pay a minimum yearly franchise tax to the state of $150.

Consider the following additional fees that may be incurred by an LLC:

• DBA name is short for “doing business as.”
• Certified document copies
• Your Certificate of Existence

Next steps

When you register a limited liability company (LLC), you establish a legal basis upon which to operate your firm. Companies should make it a priority to maintain their limited liability company in compliance with state regulations and in an active position on the state’s website.

In addition, having a registered LLC enables you to perform the following:

• Obtain any permissions or licenses required to run your company, such as those issued by the health department, the zoning department, the department of home occupations, the department of professional licensing, and others. Some states need a seller’s permission to conduct sales
• Register your company with the department of revenue in your state.
• Create a bank account for your company, such as a Bluevine account or a Kabbage account.
• Create a credit card account for your company.
• Invest in insurance coverage for your company.
• Create a trademark to protect both your company’s name and its logo.

Establish LLC yourself or with a pro service?

To establish a limited liability company (LLC), you are not required by law to consult a lawyer. The majority of states enable the establishment of LLCs via the process of registering the business entity on the website of the secretary of state and with the Internal Revenue Service (IRS).

If you are not acquainted with the process of forming an LLC, your best bet may be to hire a professional LLC provider so that you can be certain that the creation will go smoothly and quickly.

When entrepreneurs start a new firm, they may save startup costs and save valuable time by using a professional agency that specializes in company formations. They can handle items like:

• Developing an operating agreement for an LLC that details your company’s who, what, when, where, why, and how, and putting it into writing (required in some states).
• putting together Articles of Organization that identify the management of the LLC, the registration agent, and the date the company was formed.
• Taking up the role of registered agent for your firm.
• Keeping careful records in the event that there are investigations or litigation.
• Payment of filing fees and registration with the appropriate parties.
• Registering the name of your firm and ensuring that the name you choose for your limited liability company is accessible.
• Finishing up and turning in all of the necessary legal and formation documentation.

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