Forming a limited liability company (LLC) in Arkansas provides business owners with the benefits of limited liability protection and operational flexibility. This comprehensive guide outlines the step-by-step process to help aspiring entrepreneurs successfully establish an LLC in Arkansas. It also includes specific information on costs associated with each step.
Step 1: Select a Name for Your LLC
Select a unique name for your LLC that complies with Arkansas naming requirements. The name must include "Limited Liability Company," "Limited Company," or their respective abbreviations, such as "L.L.C.," "L.C.," "LLC," or "LC." For professional service LLCs, use "Professional Limited Liability Company," "Professional Limited Company," or the abbreviations "P.L.L.C.," "P.L.C.," "PLLC," or "PLC." Verify name availability by searching the Arkansas Secretary of State business name database. To reserve an available name for 120 days, file an Application for Reservation of Limited Liability Company Name online or by mail. The filing fee is $22.50 for online submissions and $25 for mail submissions.
Using a fictitious business name, also known as a trade name or DBA (doing business as), is an option. File an Application for Fictitious Name with the Arkansas Secretary of State to use a fictitious business name. The filing fee is $22.50 for online filings and $25 for mailed filings.
Step 2: Designate a Registered Agent
Designate a registered agent who will accept legal papers on behalf of your LLC in Arkansas. The agent can be an individual who is a full-time resident of Arkansas or a business entity registered with the Arkansas Secretary of State.
Step 3: File Articles of Organization
Form your LLC by filing the Articles of Organization (Form LL-01) with the Arkansas Secretary of State. The Articles of Organization should include the LLC's name, address, registered agent's name and address, and a statement regarding management structure (manager-managed or member-managed). The form can be filed online or by mail.
The filing fee is $45 for online submissions and $50 for hard copies.
Step 4: Create an Operating Agreement
While not mandatory, it is highly recommended to create an LLC operating agreement. This internal document outlines how the LLC will be managed and establishes the rights and responsibilities of its members and managers. Although not required to be filed with the Articles of Organization, an operating agreement helps solidify the separation between personal and business assets, safeguarding the limited liability status of the LLC.
Step 5: Get an EIN
If your LLC has multiple members or employees, it must obtain an IRS Employer Identification Number (EIN). Single-member LLCs with employees or those opting for corporate taxation must also obtain an EIN. Apply for an EIN through the IRS website. There is no filing fee.
Step 6: Pay Annual State Tax Obligations
All LLCs and foreign LLCs in Arkansas are required to pay a minimum $150 tax annually to the Arkansas Secretary of State. Additionally, LLCs must file annual franchise tax reports, including the tax payment, by May 1 each year. Penalties may apply for late reports.
For certain cases, such as collecting sales tax or having employees, registration with the Arkansas Department of Finance and Administration (DFA) is necessary. Register online through the Arkansas Taxpayer Access Point (ATAP) or file a paper registration using Form AR-1R, the Combined Business Tax Registration Form.
By following the step-by-step instructions provided in this guide, entrepreneurs can successfully form an LLC in Arkansas while being aware of the specific costs associated with each stage of the process. Remember to consult professionals or seek legal advice as needed to ensure a smooth and compliant establishment of your LLC in Arkansas.
Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.
All-in-one money management
Take your business to new heights with faster cash flow and clear financial insights —all with a free Novo account. Apply in 10 minutes.