How to start an LLC in Arkansas?
Congratulations on taking the first step toward starting your LLC in Arkansas! LLC stands for “limited liability company,” and it’s a business structure that offers personal liability protection and other perks. Plus, setting up an LLC in Arkansas is relatively simple and inexpensive. In this guide, we’ll walk you through the process of starting an LLC in Arkansas, step by step. We’ll cover everything from choosing a business name to filing your Articles of Organization with the state. So let’s get started!
Before we dive in, here’s a really good explanation video on starting an LLC in Arkansas for those who prefer a video guide.
Benefits of starting an LLC in Arkansas
There are many benefits to starting your LLC in Arkansas. As expert start-up guides will advise you, it has the advantage of limited liability protection for its members. It’s more compact than a Corporation or S Corporation.
Limited Liability Protection
One of the most significant benefits of starting your Arkansas business as an LLC is that it offers limited liability protection, which means that if a lawsuit arises from a customer or client for something you did while operating your business – it won’t follow you home. Rather than the people who own it, the business itself is liable for paying out any damages.
Your personal assets, such as your car or house, are separated from your Arkansas business assets and aren’t at risk of being taken away if someone sues your business for something you did wrong. Many entrepreneurs start their businesses as LLCs because of this benefit.
An LLC in Arkansas has the choice of being taxed as a Sole Proprietorship, Partnership, or Corporation. It’s a good deal for start-ups since they don’t have to worry about finding an accountant or anything like that just yet.
Note: Single-Member LLCs are treated as Sole Proprietorships by default.
Minutes of meetings not required
Lastly, one of the benefits of starting your LLC in Arkansas is that no minutes are required for meetings. People don’t have to travel for monthly meetings or anything like that. They need to follow the operating agreement, which doesn’t take too many hours out of the day.
Arkansas LLC Rules & Requirements
This is a quick summary of the most important rules and requirements that this article will go through in-depth.
To apply for permission to form an LLC in Arkansas, the company must have a in Arkansas. Your LLC’s name must include “Limited Liability Company,” or their abbreviation, “LLC.” It can’t be something that resembles another already existing business. Ensure you as a business owner keep accurate records and reports of your business transactions.
Best Arkansas LLC Formation Services
If you’re thinking about starting your LLC in Arkansas, it’s a good idea to use a professional service that can handle the process for you. These services will ensure you get all the necessary paperwork filed correctly and timely so that you don’t have to worry about anything going wrong with your business registration.
Finding the Best LLC Formation Services in Arkansas
Choosing the best LLC formation services in Arkansas is an essential first step for anyone looking to start their own. Here are some of the most critical factors you’ll want to consider:
- Customer service/communication
- Integration with accounting software (if necessary)
These factors will help you narrow down your list of potential providers to find the one that provides you with the professional service you need at an affordable price. We have reviewed some of Arkansas’s best LLC formation services here: Best LLC Formation Services.
As mentioned above, it’s usually recommended that if you’re unfamiliar with this kind of thing, then you should consider allowing LLC formation service providers to help you start your own business here in Arkansas. These services will ensure that you comply with state law and all the rules and requirements. If anything goes wrong, they’ll have your back so that you don’t have to worry about it.
However, if you’re looking to do it on your own, then you can continue reading our guide on how to start an LLC in the state of Arkansas.
The following is a step-by-step guide of what you can expect when forming an LLC in Arkansas:
5 Steps to Starting an LLC in Arkansas
Step 1: Name your Arkansas LLC
Choosing your name can be one of the most challenging parts of starting your Arkansas LLC. You’ll have to choose a name that’s not already in use by another Arkansas LLC or restricted by the state.
The rules for naming your Arkansas limited liability company are as follows:
- Your name cannot mislead people into thinking the Arkansas LLC was set up by the government or is a federal government agency.
- The name can’t be too similar to another Arkansas company’s
- Your name has to end with an LLC designator (LLC, LTD., etc.)
- You may need to fill out additional paperwork if you want to use certain words in your Arkansas LLC name, including bank, trust, trustee, incorporated, Inc., and corporation.
- If you want to see if a specific LLC name is available, you can run a business name search on the Business Entity Search page of the Arkansas state website.
After choosing the perfect name for your new Arkansas business, you can also secure a good domain name. A domain name is also helpful if you want a business email address @yourllc.com.We recommend using Namecheap to register your domain. They have great prices, fast service, and an easy-to-use website.
Step 2: Choose your Arkansas Registered Agent
Before you form your LLC in Arkansas, you’ll need to appoint a registered agent with a physical street address in the state of Arkansas. This person or entity would be responsible for receiving essential documents on your behalf if anything happened that would require that sort of thing (lawsuits, etc.). You can name yourself as your Arkansas registered agent, but that isn’t advisable because you would not be able to claim any anonymity.
What is a Registered Agent?
An Arkansas registered agent is an individual or business entity that agrees to accept the service of process on behalf of a Limited Liability Company.
When you create a Limited Liability Company in Arkansas, the State of Arkansas requires that this registered agent be appointed for your LLC to become effective. The Arkansas Secretary of State’s Office will not file your Certificate of Organization unless you designate a registered agent on your application form.
Who can be a Registered Agent in Arkansas?
For a registered agent, you can select a person or an organization. The individual can be an Arkansas resident, an Arkansas corporation, or a non-Arkansas corporation with a business presence in Arkansas.
You can also use an Arkansas registered agent service to appoint a registered agent and obtain a business address. Services such as Zenbusiness and Northwest Registered Agent offer this service as a feature of some of their packages when you register an Arkansas company with them.
What does a Registered Agent in Arkansas do?
A registered agent in Arkansas is available during normal business hours to accept important documents and notices on behalf of your LLC. These can be official court papers such as lawsuits or service of process documents that will require the registered agent’s signature.
A registered agent is not responsible for the management of your Arkansas LLC, nor are they required to do anything with the documents once they are received at their business address except for filing them under Arkansas law.
Step 3: File your Arkansas LLC Certificate of Organization
You’ve chosen your Arkansas name and appointed a registered agent, and now it’s time to create your LLC and become a recognized legal entity.
Before filing, you will need to decide between a member-managed and manager-managed LLC. The members run a member-managed LLC, while a designated manager runs a manager-managed LLC.
To start an LLC in Arkansas, you’ll need to file your Certificate of Organization with the Arkansas Secretary of State, which can be done online. The online filing fee is $50, and a person must file this with authority to do so on behalf of the Arkansas LLC.
File your Arkansas LLC Certificate of Organization Online
You’ll need the following documents to submit your papers:
- The official name of your Arkansas LLC
- A brief description of the purpose of your Arkansas LLC
- Your Arkansas LLC’s street address
- Your Arkansas registered agent’s name and address
- The signature of your registered agent
- Your LLC’s authorized person’s signature
- Your return address
You can submit your Certificate of Organization through Arkansas’s online business filing system.
File your Arkansas LLC Certificate of Organization by Mail
If you choose not to file online, you can also mail your Certificate of Organization to the Secretary of State. The filing fee is $50 and a person must sign the formation documents with authority to do so on behalf of your Arkansas LLC. You’ll need the download the filing form and mail it.
Arkansas Secretary of State
1401 W. Capital Ave.
Little Rock, AR 72201
Step 4: Create your Arkansas LLC Operating Agreement
After filing your Arkansas LLC Certificate of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of your Arkansas LLC. These rules address issues such as how LLC owners will spend the money, whether voting takes place within your business, what happens if someone wants to sell their interest in the company etc.
Arkansas does not require an LLC to have an operating agreement, but it is recommended that you create one. An operating agreement ensures that all members know and understand their roles within the company. If they ever need to take legal action, they will show a court of law that the company functions as more than just an unincorporated association.
This operating agreement should be thorough but concise, outlining everything you want to include regarding the membership responsibilities of your Arkansas LLC, so there are no misunderstandings down the line.
The operating agreement will also be necessary when you open a business bank account in Arkansas.
Step 5: Get an EIN for your Arkansas LLC
An EIN, or Employer Identification Number, is a unique number that the IRS issues to businesses for tax purposes. An EIN is like your business’s social security number. You can use it to file state or federal-level tax returns and financial statements with different government agencies or open a business bank account.
An EIN is required for several reasons. First, as mentioned above, it is needed to open a business bank account for your Arkansas LLC. You will also need an EIN to hire employees, as it is used on employment tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of your Arkansas LLC’s various tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Applying for an EIN for your business is free of charge.
Arkansas LLC Processing Time
Online filings take 2-3 business days for the state of Arkansas to process your Certificate of Organization and approve your LLC.
If you choose to file by mail, the processing time is approximately 1-2 weeks.
Arkansas LLC Frequently Asked Questions
How much does it cost to start an LLC in Arkansas?
The online filing fee is $50, and the mail filing fee is $50 in Arkansas.
How do I set up an LLC in Arkansas?
Step 1: Choose a name for your Arkansas LLC
Step 2: Choose an Arkansas Registered Agent
Step 3: File the Certificate of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN
Is there an annual fee for LLC in Arkansas?
The annual filing(Franchise Tax) is free in the state of Arkansas.
How long does it take to start an LLC in Arkansas?
It takes 1-2 weeks to start an LLC in Arkansas when filing by mail and 2-3 business days when filing online.
How to Start an LLC in Arkansas
A Beginner’s Guide to Starting an LLC in Arkansas