Perhaps you are hoping to form an Arkansas LLC. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Arkansas.
On this page, you’ll learn about the following:
Arkansas LLC Cost of Filing
Here are the costs involved in forming an LLC in Arkansas.
Cost of Filing Formation Certificates
The Arkansas Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Arkansas Secretary of State.
Arkansas Domestic LLC
- Online Filing costs $45
- Franchise Tax/Annual Report filing costs $150
- Name Reservation Fee costs $25
- By mail: Fill out the Application Form PDF, and submit it to the following address: Arkansas Secretary of State, 1401 W. Capitol, Suite 250, Little Rock, AR 72201, costs $50
Arkansas Foreign LLC
- Online Filing Costs $270
- Franchise Tax/Annual Report filing costs $150
- Name Reservation Fee costs $25 (online)
- By Mail: Fill out the Application form PDF, and submit it to the following address: Arkansas Secretary of State, 1401 W. Capitol, Suite 250, Little Rock, AR 72201, costs $300
Visit the Official Arkansas Secretary of State website to learn more about the LLC Filing Fees.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also because it would be faster. You won’t have to wait in a queue in doing so.
Arkansas LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in Arkansas, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Arkansas Department of Revenue for regulatory boards or agencies requiring licensing.
Arkansas LLC Taxes to be Paid
Arkansas State Income Tax
The State Tax in Arkansas varies between 1.125% to 6.925% depending on the total amount of taxable income. This tax is levied on any money that you pay to yourself as a business owner.
Arkansas Sales tax
The sales tax varies from county to county in addition to the standard sales tax at the rate of 6.5%.
Federal Self-Employment Tax
The Self-employment tax is imposed on any profit that you draw from your LLC business in the State of Arkansas. The current rate is 15.3%.
Employer Payroll Tax Withholding
The employers operating their business in the State of Arkansas must withhold payroll tax from their employees at the rate of 7.65% of their taxable salary.
Cost Comparison Among States
Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to Arkansas, read the table below:
|State||Filing Fee||Annual Fee/Biennial Fee||Sales tax|
|Arkansas LLC||$45 (online)$50 (mail)||$150 (annual)||6.5% + local county rates|
|Missouri LLC||$50 (online)$105 (mail)||None||7.18%|
|Tennessee LLC||$300||$300 (annual)||7% + local county rates|
|Louisiana LLC||$100||$35 (annual)||4.45%|
|Oklahoma LLC||$100||$25 (annual)||4.5%|
Arkansas is one of the smaller states west of the Mississippi River. It has diverse landscapes. The State has witnessed significant economic growth and is ranked highly in food processing units. Other major sectors include health care, education, and infrastructure.
- Arkansas Name Reservation: $22.50 for online filing or $25 by mail
- Doing Business As (DBA): $22.50 for online filing or $25 if filing by mail
- Certified Document Copies: $5 + $1.50 per page.
- Certificate of Good Standing: $25
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of Arkansas LLC: $45 for online filing or $50 by mail
How Much Does It Cost to Maintain an LLC in Arkansas
To maintain an LLC in Arkansas you will need to pay an annual fee of $150 along with income tax (1.125% to 6.925%), sales tax (6.5% + local county charges) and federal taxes.
One crucial cost to keep in mind when operating an LLC in Arkansas is the annual franchise tax imposed by the state. Unlike some other states, Arkansas calculates this tax based on the LLC’s net worth. The more prosperous your business is, the higher your tax liability will be. This may prove burdensome for small businesses with limited resources, especially during the initial stages of their operations when profits might not yet be substantial. It is vital for potential LLC owners to factor this cost into their financial planning to ensure they are not caught off guard by unexpected tax obligations.
Furthermore, LLC owners in Arkansas must obtain the necessary licenses and permits to legally operate their business. The cost of obtaining these permits can vary depending on the locality and nature of the enterprise. For instance, a restaurant owner may need food service permits, health department inspections, and liquor licenses, while an online retailer may require no physical permits but may have to comply with sales tax regulations. Carefully researching and budgeting for these licenses and permits is essential to operating within the confines of the law without incurring unnecessary expenses and potential legal issues.
Another aspect of maintaining an LLC that incurs costs involves the ongoing administrative requirements and accounting obligations. LLCs must keep proper bookkeeping records and file annual reports with the Arkansas Secretary of State. Though these requirements may seem minor, ignoring or neglecting them can lead to penalties or even the dissolution of your business. Maintaining accurate financial records may necessitate the use of accounting software or hiring an accountant to ensure compliance with tax regulations. Though these services come with a price tag, they are essential for maintaining the long-term viability of your business.
Apart from administrative obligations, LLC owners should remember the cost of professional services required to ensure legal compliance and protect the business’s interests. Consulting a lawyer experienced in business law may be advisable, especially during important stages such as drafting operating agreements or managing potential legal disputes. While these expenses may seem burdensome at first, they are vital for safeguarding your LLC’s structure, and potentially preventing more significant costs and troubles down the line.
In conclusion, established businesses often warn aspiring entrepreneurs of the financial responsibilities associated with running a company, and maintaining an LLC in Arkansas is no exception. It is crucial to consider the ongoing expenses, such as the annual franchise tax, licenses and permits, accounting services, and legal counsel. Proper planning and budgeting for these costs can help ensure the long-term success and compliance of your LLC. By understanding these financial obligations upfront, entrepreneurs in Arkansas will be better equipped to navigate the intricacies of operating an LLC while mitigating any unnecessary financial burdens.
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
The cost of Arkansas is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.