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Start an LLC in ArkansasIf you’re looking for a reliable DIY guide for starting an LLC in Arkansas, look no further. Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.

That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an LLC formation service – they’ll take care of the paperwork so you can spend more time growing your business.

Recommended: Compare the Top LLC Services

If you’re new to the process of starting an LLC, you might also be unfamiliar with the LLC formation services that are reliable and offer great value – like ZenBusiness. As a reference point we compared them to the two most well known LLC formation services, IncFile and LegalZoom. See our comparison guides for more information:

ZenBusiness vs LegalZoom or ZenBusiness vs IncFile

Step 1: Name Your LLC

What’s in a name? Quite a bit, actually. Your business name is your Arkansas LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.

Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.

While you can (and should) be creative with your business name, there are certain state requirements that it must follow.

Comply with the state’s rules by including a term that indicates its business type, like “Limited Liability Company,” “L.L.C.,” or “LLC.” And it may not contain the name of any person that isn’t an LLC member or former member. Plus, it must be distinguishable from every other business name on record with the Secretary of State.

But what if your name is unavailable? You’ll probably want to distinguish it without losing it completely. One or more of the following changes will make your name unique:

  • Adding, removing, changing, or rearranging keywords
  • Using unique spellings
  • Switching how numbers are expressed (Arabic numerals, Roman numerals, or words)
  • Changing between singular, plural, and possessive forms of the same word

Small, syntactic changes to components like punctuation, capitalization, spacing, articles, conjunctions, and special characters will not be enough to distinguish your name.

For Example

Consider this: your friend Fanny wants to open a flower shop in Little Rock, Arkansas. The name she wants, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Secretary of State’s records.

Determine the Name is Available

Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Articles of Organization without first confirming it’s available. Use the Secretary of State’s Business Entity Search to see if there’s an existing business using your desired name.

Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.

Optional: Name Reservation

You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Arkansas for a total of 120 days.

Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold either online or by mailing/hand-delivering an Application for Reservation of Entity Name to:

Arkansas Secretary of State

Business and Commercial Services Division

Suite 250, Victory Building

1401 West Capitol Avenue

Little Rock, AR 72201

Online filings cost $22.50 and mailed or hand-delivered ones cost $25.

Step 2: Choose a Registered Agent

Fanny’s LLC is quickly taking shape, and if it’s going to operate in Arkansas, she’ll need a go-between for state and legal communications. This is called the registered agent.

A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. The Secretary of State website puts it this way: “The registered agent is the “mailbox” for the corporation. He or she is the person or entity designated by the corporation to receive any service of legal action or other official communication on its behalf.”

Taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside Arkansas.

But maintaining an agent isn’t just a convenience, it’s mandatory. Arkansas’ Model Registered Agents Act requires every business entity to appoint one, or face a loss of good standing or administrative dissolution.

Now for the practical application, the “how-to.” Designating a registered agent is a one-step process. All you need to do is include the agent’s name and address on your Articles of Organization. Then, after the form has been filed, this information will be part of your LLC’s public record.

You can choose either an individual or a business entity as your registered agent.

Individual as Registered Agent

You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. In fact, you have a wide range of agent options. Any person who is an Arkansas resident with a physical address in the state is a viable agent.

Often, third parties like an attorney or business partner, someone who knows the particulars of LLC operations, can be quality choices. But family members and friends are equally valid. You can even assume the role yourself, as long as you meet the requirements and are prepared to take on the additional responsibilities.

Registered Agent Service

It can be a lot easier, though, to use an LLC formation service like IncFile or Northwest Registered Agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your Arkansas LLC on your own, you can use a national registered agent service to cover your agent duties.

During the life of your LLC you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.

Step 3: File the Formation Documents with the State

This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.

She’s reserved her unique business name, designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Articles of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the Arkansas Secretary of State, giving it the authorization to commence business in the state.

Ready to get started? First, choose a filing method. You can submit your Articles of Organization online, by mail, or in person.

Online Filing

Navigate to the Secretary of State’s Online Filing System. Scroll down to find “Articles of Organization” and click “Start Form.” From there, just follow the onscreen instructions to complete your filing.

Electronic filings cost $45 and will be processed the same day you file.

Filing By Mail

Download and complete a paper application. Hard copy filings cost $50, so include a check or money order and mail your materials to:

Arkansas Secretary of State

Business and Commercial Services Division

Suite 250, Victory Building

1401 West Capitol Avenue

Little Rock, AR 72201

Filing In Person

Live in Little Rock? You can drop off your form and payment to the same address as part of your weekly errands.

Standard processing time for mailed and in-person filings typically takes two business days, although hand-delivered forms may be processed while you wait.

Step 4: Create an Operating Agreement

The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.

Arkansas LLCs aren’t required to adopt operating agreements. But this doesn’t mean it wise to go without one. An operating agreement is actually one of the most important documents for your LLC. It optimizes your efficiency, protects your legal assets, and legitimizes your LLC to courts, banks, and more. We strongly recommend creating one.

Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to the tax structure.

If you’ve decided to draft an agreement, there are two ways to go about it:

  1. Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend getting one through ZenBusiness, which includes a free LLC operating agreement with every package. This will save you a lot of time and money.
  2. Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.

What are default laws?

Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.

Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.

Step 5: Get an EIN

There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.

Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.

The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:

Online

Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.

Fax

You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.

Mail

Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

Okay, so you’ve filed the Articles of Organization, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!

Step 6: Taxes, Licensing & Income Reporting

For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep an Arkansas LLC running smoothly and in good standing with the state.

Before you start doing business, create a plan for the following potential LLC requirements:

Federal Taxes

As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.

State Taxes

Arkansas income taxes work the same way that federal ones do, so the LLC’s owners will report any income on their personal returns rather than a separate corporate one. Your LLC will, however, need to pay a $150 franchise tax each year as part of a combined franchise tax/annual report filing called the Annual LLC Franchise Tax Report. You can file the report online or by mailing a hard copy to:

Arkansas Secretary of State

Business and Commercial Services Division

P.O. Box 8014

Little Rock, Arkansas 72203

Mark May 1 in your planner, on your phone, and wherever you won’t forget it, because that’s the due date. Late reports incur an additional $25 and could cause the state to dissolve your LLC.

Additional Taxes

State taxes don’t stop with the franchise tax, though. Depending on your LLC’s circumstances, there are other specific taxes it might owe. For example, if you sell any merchandise, it will need to pay a Sales and/or Use Tax. And if you hire employees, it will be responsible for Withholding and Unemployment Insurance Taxes. For more information on your LLC’s tax responsibilities, refer to the state’s Tax Guide for New Arkansas Businesses.

Licensing

The Articles of Organization may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.

Unsure which professional licenses your business might need? Search for your business purpose on Arkansas.gov to find out. Fees and timelines vary depending on the license and licensing agency.

Certain cities and counties require their own specific licenses as well, so you should also check with your local government.

Reporting

Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that Arkansas requires all of its businesses to submit one important recurring filing: the Annual Report.

Arkansas’ Annual Report is part of the Franchise Tax payment (see the “Taxes” section above). You will need to file the Annual LLC Franchise Tax Report each year online or by mail before May 1.

And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Arkansas LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.

Need Help Creating Your LLC?

If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.

But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC formation service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.

Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered agent.

Sound good? Whether you know that you’ll need an LLC service or you’re just exploring your options, take a look at IncFile and Northwest Registered Agent. These are two of the top services available. And you can take our word for it because we’ve done a whole lot of research on the topic.