How to Start an LLC in Arkansas: If you’re looking to start an Arkansas LLC for $0, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC for free in Arkansas. However, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost $0.
On this page, You’ll find all the steps that must be taken to ensure that your Arkansas LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Arkansas
- After Starting Your Arkansas LLC
- Arkansas Foreign LLC
- Arkansas LLC Formation Review
How to Start an LLC in Arkansas
An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC, you must file your Certificate of Organization with the State and pay a filing fee of $50. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in Arkansas. Below mentioned all 5 steps that explain everything you need to do to start an Arkansas LLC in 2023. Let’s get started! You can always hire a professional LLC formation service in Arkansas to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your Arkansas LLC
The first step while forming a limited liability company in Arkansas is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
LLC Naming Guidelines in Arkansas
There are a few specific requirements all the LLCs in Arkansas have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Arkansas can have the same name. ZenBusiness offers unlimited business name searches at $0.
- “Limited Liability Company”, “LLC”, “L.L.C.”, “LC”, “L.C.”, and “Limited Company” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Arkansas State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Arkansas Business Entity Search – Online Name Search|
Name Reservation Form – PDF
Arkansas LLC Name Search Guide – Instructions
|Secretary of State|
Attn: Business and Commercial Services Division
1401 W. Capitol Street, Suite 250
Little Rock, AR 72201
Reserve Business Name for Future
If you do not wish to file your LLC right now, but want to hold the name you have decided, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $22.5 (Online) and $25 (by mail or in-person) to reserve your name with the Arkansas Secretary of State. You can renew your LLC name after 120 days only once.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Arkansas Secretary of State by submitting the Form (Assumed Name Certificate) by mail or in person, along with the filing fee of $25.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
ZenBusiness – ($0 for LLC Formation)
Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Arkansas
The second step to forming an LLC in Arkansas is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Arkansas. Hence, hiring a competent Arkansas Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Arkansas or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0/year), you also get registered agent service and other services at a very reasonable price.
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Arkansas. Some LLC formation services also offer standalone Arkansas registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
You can change your existing registered agent if they want to leave the job or they leave for any other reason. To change the registered agent, you must fill out the change of registered agent form and mail them or submit them online. For more information, read how to change a registered agent in Arkansas.
A person above 18 years of age and has a physical address in the state of Arkansas can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Yes, you can be your own registered agent if you are a resident of the state of Arkansas and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Arkansas.
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
If an LLC is sued in Arkansas, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Step 3: File Certificate of Organization in Arkansas
The third and most important step in forming an LLC is to file the Certificate of Formation. This Arkansas Certificate of Organization is a legal document that is required to register your business with the Arkansas Secretary of State. It costs $50 (online or by mail) to file your formation certificate in Arkansas. (Read more on LLC cost in Arkansas).
The Certificate of Formation includes details like the name of the LLC, the registered agent’s name, address, employees’ details, and the structure of the company (member-managed or manager-managed). Before hiring employees in Arkansas LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to Arkansas, you must register as an Arkansas Foreign LLC.
How to File Online
How to File by Mail
If you prefer filing real-life forms for your LLC registration, you can download form LL-01. Read the form thoroughly, fill it out, and send it to the address mentioned below.
Mailing Address: Arkansas Secretary of State
1401 W. Capital Ave.
Little Rock, AR 72201
Processing Time: Normally, it takes around 7 business days (approx) to get your LLC formed in Arkansas. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Every LLC owner has to pay the filing fees to register their business in Arkansas. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Arkansas.
Step 4: Create Your LLC Operating Agreement in Arkansas
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing an Arkansas LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Arkansas LLC later. Hence, having an operating agreement may not be necessary but it is surely ideal. The operating agreement guide will tell you everything about it.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing an LLC EIN in Arkansas
The Employer Identification Number (aka EIN) is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Arkansas LLC requires following specific rules and regulations. On the other side, EIN for Arkansas foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Limited Liability Company in Arkansas. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Arkansas LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account
- File Arkansas business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File an Arkansas LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings, to make sure your LLC is up-to-date.
Cost of Starting an LLC in the State of Arkansas
LLCs can be formed for $0. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Arkansas must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in Arkansas,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee|
Certificate of Formation Fee
|$25 for 120 days|
In Arkansas, LLC name reservation is mandatory. If you wish to hold the name for some time (120 days) without registering your LLC, then you can do that online. It can be renewed by paying $25 for another 120 days. But you can renew it only once before you register your LLC. In some states, Name Reservation is not mandatory. Read our guide on LLC costs in Arkansas for more information.
According to the Franchise Tax rule, LLCs have to pay this tax on a yearly basis. Annual Franchise Tax reports are considered to be the annual revenue report or annual report of the LLC. If you evaluate LLC costs in Arkansas, the amount of Franchise tax is not as high as for any other form of business ownership.
Arkansas Foreign LLC
If you are interested in forming a Foreign LLC in this state, you need to file the Certificate of Foreign LLC to the Arkansas Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Single-member LLCs are taxed as sole proprietorships by default. But you can choose what type of tax structure you want for your LLC at the time of business registration. There are some federal taxes to be paid, such as federal income taxes.
Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Arkansas SOS to form your foreign LLC in the state. To know more, check out our guide on Arkansas Foreign LLC.
Reasons to Start an LLC in the State of Arkansas
Arkansas ranked 8th in the State Business Tax Climate Index and 5th for the cost of living. Currently, the state has 36,000 active LLCs, including domestic and foreign. Along with various tax benefits, Arkansas has a few more factors that are certainly beneficial to starting an LLC there.
Arkansas has a business-friendly atmosphere for LLCs. Over 7000 LLCs are formed in a year in Arkansas. The state has earned 5th position in the Nationwide index for cost of living and 8th rank for business tax climate.
- ArkPlus – Qualified businesses can get an income tax credit of up to 10% of the total capital investment under ArkPlus for specific projects. Depending on the employee payroll, the companies get qualified for the program.
- Advantage Arkansas Credit – Under this program, an income tax credit of up to 4% of the new-hire employee payroll can be received. This kind of credit will be available only if your company or business can generate full-time jobs in the state.
- InvestArk – Under this program, qualified companies can enjoy up to 7% of the total project expenditure as a credit. The LLCs, in this case, have to operate from within the state for at least a couple of years. This tax credit falls under Sales Taxes, and they are non-refundable taxes. Read more on Arkansas’ classification of LLC tax.
If your LLC has unused credits in Arkansas, it will be carried forward to the next year. For up to 9 years, the unused credits will be carried forward.
Removal of Unwanted Partners
According to the LLC Act in Arkansas, filing members’ names are not mandatory at the time of formation. However, it is needed at the time of submitting the Annual Report, which is kept confidential. In this situation, even if the LLC agreement does not prohibit any member from participating, it does not allow them to participate as well. That means if the assignor wants, he/she can remove any partner without any hassle.
It is easy and cost-effective to start an LLC in Arkansas. Especially with so many benefits, you can smoothly start and operate LLC in the state of Arkansas.
Best Business to Start in Arkansas
Are you about to form an LLC in the state of Arkansas, then you must be known to the best and most profitable niches of Arkansas. If no, then you should go through the below-mentioned information to know the most profitable businesses.
The first niche that is contributing the most to the Arkansas GDP is poultry. Arkansas is known as the rural state of the United States Of America, due to which the opportunity of this farm-based business is very high. Arkansas is known to deliver poultry-based products to most of the country’s states and nearby countries also. If someone is interested in living in remote areas and wants to work on farms, then this is the best option.
The next business is the agricultural business which is also one of the biggest farm-based businesses. The crops grown the most in Arkansas state are soybean, corn, millets, sorghum, wheat, cotton, etc., which are required for a healthy human diet. The industry has many businesses established, but the increasing demands make more business spaces enter the field and show their talents.
Along with producing these products, there is an option of opening up a manufacturing unit where one can process this raw material. It will increase the value of raw grains from a customer point of view and profits from a business perspective.
Construction Equipment and Machinery
The construction business is also on a hike in Arkansas state. Those who don’t know the fact should know that Arkansas is the first producer of construction equipment used for heavy-duty work and is still a milestone in the field. That is why people still trust the machinery made in Arkansas, making it a profitable business option.
Some small business opportunities an individual can grab are:-
- Digital businesses (Home-based)
- Restaurant business
- Daycare services
Arkansas LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Arkansas. Click on the steps in this list to read the full detail.
- Name your Arkansas LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Arkansas, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming a Limited Liability Company in Arkansas. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Arkansas but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
Things to Consider While Starting an LLC in the State of Arkansas
This article has almost all the essential steps to start your LLC. However, there are some more steps that are required. Things like business plans that include all the details, such as business type, cost, estimated business income, business funds, and other things for business checking.
You must separate personal and business accounts when it comes to expenses. You might get a business credit card to ease your expenditure. Your business earnings must be separated from your other personal earnings. You can get a business accountant to handle your business tax accounts.
Your registered agent will be responsible for handling all your business notices and government documents. The registered agent needs to be present in their office during standard business hours. The next thing to consider is the business licenses. You might get a list of business licenses to obtain to run your LLC in the state of Arkansas. Based on the type of your business, you need to obtain a proper license.
If you plan to hire a professional service, some of these services will be available with their business kit. The type of service may vary depending on the business plan you’re choosing. Amendment filing service, annual report service, name reservation service, then handling vital documents and financial documents from time to time are all included in their services. With professional service, there will be no delays in processing times as well.
How Fast Can I Form an LLC in Arkansas
If filing via mail, Arkansas LLC takes about a week to process. Filing through mail may take upto 48 hours only. The whole process can be expedited by hiring professional online services.
Using an LLC is an excellent way to set up a business that is easy to run and tax-friendly. In addition, it also provides liability protection to its owners. However, it can be a daunting task to start and maintain a successful LLC. This article outlines the steps necessary to form and manage an LLC in Arkansas.
First, you must choose a business name. The name of your business must be unique and must not be identical to an existing business in the state. It’s a good idea to check if the name you want is available by visiting the Arkansas Secretary of State’s website. If the name isn’t available, you can still incorporate a company, but you will need to make some other arrangements.
Next, you need to find a registered agent to receive legal documents on behalf of your LLC. A registered agent is required by law, and he or she must have a physical address in Arkansas. They can be an individual, a corporation, or a partnership. When choosing an agent, make sure that he or she is available during regular business hours for the purpose of service of process.
Your LLC will need to register its name with the Arkansas Secretary of State. There is a $25 filing fee to do this. You can do this in person or by mail. Once you have completed the paperwork, you can send it in a prepaid overnight envelope. To ensure that the envelope is postmarked on time, it must hold at least 3 ounces.
Finally, you will need to file an annual report. An annual report is a form that requires some research and preparation. This is one of the most important pieces of information that you can collect about your business. If you miss this, your new LLC could fall out of compliance. Luckily, you can easily prepare an annual report with help from a managed annual report service.
Fortunately, there are many options for how to file an annual report in Arkansas. Online options are available for small businesses, and the cost is nominal. However, it can take weeks to get the process done. For larger companies, it’s advisable to hire a professional to handle this task.
In fact, preparing the annual report is a time-consuming endeavor that should not be left to chance. This is because if you do not track your reporting requirements, you could end up losing money and getting into legal trouble. That’s why it’s a good idea to invest in a managed annual report service.
Lastly, you’ll need to decide on a management structure. There are two main types of LLCs: member-managed and manager-managed. Each requires different documentation, but the main function is the same. The manager-managed type is administered by the LLC’s designated manager.
If you want to get your LLC up and running in Arkansas quickly and easily, consider hiring a professional. This is especially true if you plan to open a bank account or other financial institution.
If you are a resident of Arkansas, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $270 (foreign LLC), LLC costs in Arkansas include $150 for Annual/Franchise Reports every year. LLCs are liable to pay sales tax of 6.5% every year.
It takes 48 hours to get an LLC in the state of Arkansas if you file it online. For the mail filing, it takes 7 business days to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend ZenBusiness, which has an impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $150 to the Arkansas Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for LLCs, it is a default tax structure. Once you obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Arkansas Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups, can easily start an LLC in the state of Arkansas at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.