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Last updated on: March 29th, 2019

Free Guide to Start an LLC in Arkansas

Starting a business in Arkansas can be an exciting time. Before selling your product or service though, the nuts and bolts of licenses, registrations, and taxes must be completed.

The guide below will show you the DIY process of forming an LLC in Arkansas. However, you can also use an online LLC service handle the paperwork for you. We reviewed and ranked the 7 best available.

 

Step 1: Name Your LLC

Selecting a name for your Arkansas LLC is a first step, yet a very important one. A name that is unique and easy to remember is helpful in finding potential clients or retaining customers.

The name should indicate the product or service. It should also follow guidelines set forth by the state of Arkansas.

The name of an LLC will likely appear on business cards and stationary, marketing materials, a website, legal contracts, business bank accounts, invoices and/or a building directory.

Arkansas law requires that the business name includes the words, “Limited Liability Company,” “Limited Company,” “LLC,” “L.L.C.,” ”LC,” or “L.C.” In the case of a company that provides professional services, “Professional Limited Liability Company,” “Professional Limited Company,” “P.L.L.C.,” “PLLC,” “P.L.C.,” or “PLC” may be used. The abbreviations “Ltd,” or “Co.”may also be used.

In addition, the LLC’s name can’t contain the name of any person who is not a member of the LLC unless that person is deceased.

The LLC’s name must be different than other names already registered. Distinguishing features include the following:

  • A key word is different.
  • The same keywords are used but not in the same order or with a unique spelling.
  • If the key words are numbers, they are communicated differently: as numerals, Roman numerals, or written words.
  • Key words are differentiated by singular, plural, or possessive.

For Example

Let’s imagine that someone is considering opening a flower shop in Little Rock, Arkansas. The name she is considering, Flowers by Fanny, is already in use. Instead, she decides to legally name her business Fanny’s Florals, LLC.

Determine the Name is Available

Following the selection of a name but before filing the Articles of Organization, check to ensure that your name is unique on the Arkansas Secretary of State Business Name Database. Searching in other places, such as online, is also a good idea.

After you have determined that your chosen name is “distinguishable,” the name can be registered in order that you have exclusive rights for 120 days.

Optional: Name Reservation

Sometimes a situation may arise where an individual wants a particular name but needs time to organize his/her company before filing LLC paperwork. In this case, a name can be reserved for 120 days in the state of Arkansas.

An Application for Reservation of LLC Name can be filed either online or by hard copy through the mail or in person. Most filings are processed within two days but if delivered in person can often be processed while you wait. The downside is that it does cost $25 to file a hard copy application or $22.50 to file online for the reservation.

To mail or deliver in person, use the following address:

Arkansas Secretary of State

Business and Commercial Services Division

Suite 250, Victory Building

1401 West Capitol Avenue

Little Rock, AR 72201

 

Step 2: Choose a Registered Agent

Every LLC in Arkansas is required to have a registered agent. This agent can be an individual or a company.

The role of the registered agent is that of a contact person between the LLC and the state. In the state of Arkansas a Commercial Registered Agent Listing Statement must be filed. The filing fee is $50.

Simply put, the process agent receives communications or documents from the state involving such things as taxes or lawsuits and communicates them to the LLC.

Some may wonder why a registered agent is necessary. The importance of the agent is to ensure that someone is always available to receive important documents even if the business owner leaves the office, goes on vacation, or is otherwise away. Also, having a registered agent is especially important if a physical office does not exist in Arkansas.

The owner of the LLC will need to designate a registered agent on the Articles of Organization application.

Individual as Registered Agent

Most importantly, the individual must be a resident of the state of Arkansas. In the state of Arkansas you may serve as your business’s own registered agent. However, using a third party ensures that nothing falls through the cracks. The third party can be an accountant, an attorney, or even a friend. The agent must have a physical and mailing address in Arkansas.

Registered Agent Service

If using a service, we recommend either using an LLC formation service (like Incfile or Northwest Registered Agent) which gives you a free registered agent or ordering a registered agent service by yourself if you choose to DIY your LLC formation.

 

Step 3: File the Formation Documents with State

Let’s assume that fictional Fanny has selected both the name for her LLC and the registered agent. She is ready to complete the paperwork (called the Articles of Organization) that actually creates Fanny’s Florals, LLC in Arkansas.

This step can be completed either online or by hard copy. When you are ready, it is important to note a few details about each method to ensure that your application is fully completed in the time frame in which you need it.

Online Filing

In order to complete an online application, click here.

If filing for a company that performs a medical professional service, you will need to first file a copy of the certificate issued by the medical board. The copy may be either faxed (501-682-3437) or emailed (corprequest@sos.arkansas.gov).

The cost of online filing for the Articles of Organization is $45. The application will be filed as of the date of your online filing.

Hard Copy Filing

Applications and payments can be sent or delivered in person to the following address:

Arkansas Secretary of State

Business and Commercial Services Division

Suite 250, Victory Building

1401 West Capitol Avenue

Little Rock, AR 72201

Processing time is usually within two days of receipt although if the application is delivered in person, it can often be done while you wait. The cost for filing a hard copy of the application is $50.

 

Step 4: Create an Operating Agreement

An operating agreement in the state of Arkansas is recommended though not required. The agreement is a contract that defines the operations of the LLC, includes terms and conditions, states the responsibilities of its members, and ensures legal protections of its members.

All owners of the LLC must be in agreement of the terms in the agreement and sign before a notary public.

The operating agreement is useful for both multi-member and single-owner LLCs. In both cases, the agreement provides protections.

For example, in the case of the multi-owner LLC, the terms can stipulate what should happen if a death or divorce occurs among one of its members. In the case of the single-owner LLC, the agreement could be used in court as evidence that the LLC is separate from the individual owner.

The operating agreement can be created in two ways. Some individuals may choose to write the agreement on their own, using an online template. In this case, forms are available that are specific to state. Be sure to use the correct multi-member or single-member form.

The alternative is hiring an attorney to create the document. The benefits of using an attorney are ensuring the document doesn’t exclude any important information, adheres to state law, and invalidates default provisions that may not be what you wish.

 

Step 5: Get an EIN

An EIN is an Employer Identification Number. Anyone who runs their business as a corporation or partnership must file for this 9-digit number in order to identify the tax accounts of a business. The number can be applied for in one of the following three ways:

Online

Applying online is the quickest method. The process can be completed between 7 a.m. and 10 p.m. EST, Monday through Friday. When the form is completed, the information will be immediately validated and a number issued while you are still online. In order to apply online, a valid individual taxpayer number, such as a Social Security number, is required.

Fax

Form SS-4 can be downloaded, completed and faxed to 855-641-6935, twenty-four hours, seven days per week. The EIN will be provided within four business days.

Mail

If either of the above methods are unavailable, Form SS-4 can be mailed, though processing will take approximately four weeks. The form can be mailed to the following address:

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

Think you’re ready to open up shop now? Guess again!

 

Step 6: Taxes, Licensing & Income Reporting

Businesses like Fanny’s Florals, LLC may be official after completing the above steps, but it is important not to overlook a few critical details.

Taxes and Reporting

On the federal level, most LLCs do not pay taxes directly to the government. Instead, they report income and losses on the owner’s personal 1040 tax returns. Schedule C is often used for reporting. Unless the LLC chooses to be taxed as a corporation, a single-member LLC is taxed as a Sole Proprietorship and a multi-member LLC is taxed as a Partnership.

In the state of Arkansas, LLCs are required to pay a franchise tax of $150 (often referred to as a privilege tax in other states). The tax is paid in conjunction with the filing of an annual report. This is known as the Annual LLC Franchise Tax Report.

If submitting online, you can pay with a credit card which includes a $5 processing fee or electronic check which includes a $3 processing fee.

If submitting in person or by mail, direct the following hard copy form along with payment to:

Arkansas Secretary of State

Business and Commercial Services Division

P.O. Box 8014

Little Rock, Arkansas 72203

The franchise tax is due on or before May 1. Companies that do not receive a franchise fee tax form by March 20 are required to make a written request for the form, sent to the above address, or download the PDF. A $25 plus interest late penalty will be applied if the tax is received after May 1. It generally takes between two and three weeks for the Franchise Tax Report to process.

Licensing

Professional licenses may be needed depending on the type of business you are starting. To determine if a license is needed visit https://portal.arkansas.gov/.

Required business licenses are issued by the the city or municipality where the business is located. To determine if you need to obtain a license, contact the local government.

Certificate of Good Standing

Certificates of Good Standing are issued by the Arkansas Secretary of State. The certificate certifies that a company is in compliance with all state requirements. The cost is $25. Certificates are available for downloading for 48 hours from the time of purchase.

When all of the mechanics of setting up an LLC in Arkansas have been completed, someone like Fanny can get down to the business of setting up a website, creating a logo… or purchasing flowers!

 

Need Help Creating Your LLC?

We recommend LLC formation services because it allows you to knock off an important thing off your checklist so you can focus all your energy on actually starting a business.

Can you do it yourself? Absolutely.

However, a service that forms an LLC for you will help with ongoing maintenance and keep you notified of any requirements you should adhere to.

As we mentioned earlier, IncFile and Northwest Registered Agent are the top LLC services available. If you’re not familiar with them, as a point-of-reference many of our readers like to compare them to the most well known LLC service, LegalZoom.

IncFile vs LegalZoom or Northwest Registered Agent vs LegalZoom