How to Start An LLC In Arkansas

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Are you thinking about forming a business in Arkansas and would like to know the process? Starting an LLC in Arkansas is a simple, straightforward process that can take just a couple of weeks to get started. In this article, we look at how to start an LLC in Arkansas and what the costs might be for starting that business.

What is an LLC Business in Arkansas?

The LLC business structure is a type of business model. There are legal elements that protect business owners from personal responsibilities for the debts or liabilities that might be collected during the operations of the entity. However, there are also some tax benefits and flexibility on how you operate.

The name of the business is also protected from being used by another brand. So if you use the name Example Business LLC, no one else can use that name. Therefore, it is an effective option for you to ensure that you control all the branded searches that happen on Google, which for some popular brands can control 70% of the traffic for the website.

How Does an LLC Business in Arkansas Compare to Other States?

The LLC business model is not unique to Arkansas. You can form an LLC in multiple states. And if you want to protect your name across the US, then you will need to register your business in different states, not just Arkansas. However, there are differences in how much it costs and what you can do within different states.

Here is a comparison of how an LLC is treated between different states.

State LLC Filing Fee LLC Annual/Biennial Fee Corporate Tax Rate Nominal GDP per capita
Arkansas $45 $150 (every year) 1-5.9%* $47,770
Oklahoma $100 $25 (every year) 4.00% $51,861
Missouri $50 $0 (no fee and no information report) 4.00% $58,356
Mississippi $50 $0 (however, an information report must be filed every year) 4.00% $42,411
US Average $130.38 $89.34 (every year) 5.60% $64,773.08

What are the Rules to Start An LLC In Arkansas?

For you to start an LLC in Arkansas there are several rules that you must follow. For one, you need to have a good understanding of the LLC rules. Your name might be limited, you need to have an LLC, Limited Liability Company, or something along those lines at the end of the name. You must also have a minimum of one shareholder. And you will need to have a name/address of a registered agent in the state. The agent must not have a PO box and should be contactable during regular business hours.

How Much Does It Cost To Start An LLC In Arkansas?

Registering an LLC in any state comes with some costs. These expenses will be paid to the Arkansas Secretary of State or state agencies/federal governments. The costs can also vary depending on whether you’re registering as a domestic LLC or a foreign LLC. There might also be the need to apply and pay for licenses or permit fees. These might be required before you start your firm, regularly, or on an as-required basis.

Some of the costs that you can expect include:

  • A $45 charge for filing your Articles online or $50 if you submit them via mail.
  • A $25 fee for reserving your LLC business name if by mail. The cost is $22.50 if you do it online.
  • Arkansas LLCs need to pay a minimum of $150 franchise tax every year.

Unlike other states, the cost to file the documents online is cheaper. In most cases, the costs are more expensive online, normally because they force business owners to have a service to make registration quicker.

How to Start an LLC in Arkansas

Here are the instructions required when you want to know how to start an LLC in Arkansas. These steps can be followed very closely, though sometimes you might want to run a few of the steps at the same time.

Step 1 – Choose a Name for your LLC Business

How to Start An LLC In Arkansas

The first thing that you need to do is to choose a name for your LLC business. This step can take some time as you will need to conduct a business name search to ensure that the name you want to use is available. And there are certain rules within the name that you must follow. For example, the rules that you follow include:

  • Your name must include the phrase ‘limited liability company’ or an abbreviation.
  • No names can be used that might confuse a state entity/agency.
  • No name can be used that is similar to another Arkansas business.

A business name search will help you with the last point of these. Once you’ve chosen a name, you should buy the domain for the business name.

Step 2 – Get a Fictitious Name

Unlike in other states, you need to submit an Arkansas application for a Fictitious Name, otherwise known as a DBA name. This application must be made to the Arkansas Secretary of State and is overseen by the Business and Commercial Services Division.

There is a fee for this process, and it costs more if done by mail. The copy of the application must also be sent to the clerk of the county where your registered office is situated unless you’re based in Pulaski.

Step 3 – Consider a Trademark

How to Start An LLC In Arkansas

Now you need to check whether you would like to register your name for a trademark. This is often not required in other states, but in Arkansas, it can be more beneficial as there is less protection for LLC company names in the state.

To register a trademark, you need to apply to the Arkansas state department and the USPTO. There is a $50 charge for this service, but it lasts for five years.

Step 4 – Registered Agent in the State

How to Start An LLC In Arkansas

All LLC businesses in the state require an agent who lives in the state. The registered agent must have an address in the state that is not a PO box. They should also be available throughout the regular business day to receive notifications for tax and legal purposes.

The registered agent can be you or it can be a registered individual or you could use a brand, like ZenBusiness and IncFile. These brands can also help you with the whole process, including submitting your details to multiple states and acting as an agent in all states.

Step 5 – Submit Articles of Organization

Now you need to submit the Articles of Organization, known as the LL-01 form. Submit these forms to the Arkansas Secretary of State. You will need to collect all the relevant information such as:

  • Name of the LLC
  • The main address of the LLC
  • The name, address, and phone number of the agent
  • Whether the LLC is going to be handled by members or a manager
  • Authorized persons including name and signatures.

How to Start An LLC In Arkansas

Step 6 – Receive Certificate From State

After you’ve forwarded the documents to the State, you will get the files approved and the state will provide a certificate that will confirm the LLC’s formation and existence. Now you will be able to obtain an Employer Identification Number, licenses, and a business bank account using your certificate.

Step 7 – Operating Agreement

Now you can create the operating agreement. The operating agreement serves as a ‘handbook’ for how the business will be run. The LLC will be governed by state law if there is no operating agreement.

The operating agreement is relatively simple. There are free and premium templates available online that can help you create one if you’re unsure.

Step 8 – Obtain an EIN

You will need an EIN if you want to hire employees or if there is more than one member in your LLC. You will also need the EIN to identify yourself to the IRS. The EIN is used to file and pay taxes. It can also be used to provide payroll information and payments for employees.

You can get your EIN number by completing an application on the IRS website.

How to Start An LLC In Arkansas

What are Arkansas Taxes Like?

The tax structure in Arkansas can be challenging like it is for many people across the US. All businesses are subject to Federal and state taxes. The difference between the two is that federal taxes are collected by the federal government, and state taxes are collected by the state.

In Arkansas, you will need to pay a minimum state tax of $150 per annum. And you will need to also file an annual report to the Secretary of State. Both of these become the Annual LLC Franchise Tax report. The report is due every year on the first day of May.

There will also be other taxes and forms required, but this will depend on which sector your business operates in, where you are and how the IRS taxes you.

If you’re not a tax expert, it is highly recommended that you speak to a tax expert in the state. They will be able to identify which taxes are required for your business, how to pay them, and when. You might also be able to get your finances sorted for you by them for a low monthly fee. Therefore, you can spend more time building the business than reporting on it.

Final Word: How to Start An LLC In Arkansas

If you’re looking into how to start an LLC in Arkansas, then you need to follow the steps that are mentioned above. It can take some time to get your LLC business registered in Arkansas, so it is best to start the process now.

The exact cost to register a business in Arkansas can vary. It depends on your business and the goals. However, you can expect costs to be somewhere between $100 and $300.
In Arkansas, you will be required to pay a minimum of $150 every year for your business. There are no exceptions. Other tax costs will vary depending on the sector you service.
It is relatively quick for you to register a business in the state. It can take between ten days and three weeks. It is quicker over the internet than via mail.
It is better to submit your application online. Not only is the process much faster when you submit your application online, and it costs less, which is unusual for numerous states.
Arkansas is a good state to start a business in. They have good tax laws, a high-energy business environment, and lots of opportunities.