Arkansas LLC – How to Form an LLC in Arkansas [5 Easy Steps]

Forming an LLC (Limited Liability Company) in Arkansas is easy and affordable. The following are few procedural steps on how to start an LLC in Arkansas. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Arkansas, visit How to Start an LLC.

Arkansas LLC

How to Start an Arkansas LLC

Suppose you’re planning to invest in some profitable business or maybe about to set up your business in Arkansas. In that case, forming an LLC in Arkansas is the simplest option for you.

An LLC or a Limited Liability Company is a hybrid form of business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Arkansas. 

Step 1: Decide a Name for Your LLC

name llc

If you are to start an LLC in Arkansas, the first thing you do is decide on a business or company name per the naming guideline of the state, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Arkansas business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming yourregis Arkansas LLC.

Why do you need a proper business name?

If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.

Because of this, here are some of the major benefits of choosing the best LLC corporate names.

  • To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
  • After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
  • You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC? 

name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Arkansas Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.  

  • Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
  • You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
  • As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain

Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.

If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.  

Step 2: Assign a Registered Agent in Arkansas

get registered agent

A registered agent service provider is a person or a separate business entity responsible for acting or working on your behalf to make sure you form your LLC within the processing time. This registered agent is the contact person who will receive significant tax forms, legal forms, formation documents, a legal document, a notice of lawsuits, and other official government correspondence in Arkansas. Choosing Arkansas-registered agents for your LLC is required. 

Make sure your registered agent is a resident of Arkansas. It could also be a business. Here are the recommended registered agent service provides to consider:

LLC Service

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These five LLC formation services are recommended registered agent service providers as they are authorized to conduct business in Arkansas. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years. 

Step 3: File Articles of Organization in Arkansas

file formation certificate

A Certificate of Name Reservation is needed to file an Articles of Organization, as other states call it. You need to make reports of this certificate with the Arkansas Secretary of State. You may file them online, by mail, or in-person for $50. 

This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Arkansas, like if it is a member-managed or managers-managed

Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Arkansas LLC will offer. You must indicate the type of business, whether online business or bring-and-mortar business. 

How to File Online

Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.

How to File by Mail

If you prefer filing real-life forms for your Indiana LLC registration, then you can download the Arkansas Limited Company Certificate of Formation. Please read the form thoroughly and fill it out. It will have to fill, among others,  your name, city, state, zip code, and signature. 

Step 4: Create Your Arkansas LLC Operating Agreement

create operating agreement

An operating agreementis a 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. 

Starting an LLC in Arkansas does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.

Step 5: Filing a Arkansas LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business. 

It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Filing Fee: Free

After Starting your Arkansas LLC 

After forming your LLC, there are still some things that you will need. Take note of the following:

  • Get a company business account or company credit card
  • File Arkansas business permits & licenses
  • Get liability for business liability insurance with coverage for employees
  • File an Arkansas LLC annual report or biennial report
  • Already existing LLCs that wish to operate in Arkansas must register as a foreign Arkansas LLC.  

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines for your federal taxes and other additional taxes or business license and your filing fee or filing cost, including fees for late filings to make sure your LLC is up-to-date.  

Why an LLC in 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 start an LLC there. 

Growing Economy

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. 

Tax Benefits

  • 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. 

Unused Credit

If your LLC has unused credits in Arkansas, it will be carried forward to the next year. Up to 9 years, the unused credits will be carried forward.

Removal of Unwanted Partners

According to the Arkansas LLC Act, 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 Arkansas.

Best Business to Start in Arkansas

Are you about to form an LLC in 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.

Poultry Farm

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.

Agricultural Business

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: 30 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.

  1. Name your Arkansas LLC

    The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
    name llc

  2. Choose a registered agent

    In Arkansas, it is mandatory to select a registered agent for service for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
    get registered agent

  3. File a formation certificate

    Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    file formation certificate

  4. Create operating agreement

    An operating agreement is not a strict requirement but something encouraged when you start an LLC.
    create operating agreement

  5. 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.
    get an ein

F.A.Qs

What is the difference between ‘domestic LLC’ and ‘foreign LLC’?

A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.

What do I need for Domestic and Foreign LLCs?

For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.

Is the cost to form an LLC the same across states?

The cost to form an LLC varies per state.

Does an LLC need to use a DBA?

Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here

Why are operating agreements important?

This internal document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

Is there anything else I should keep in mind when naming my LLC?

>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.” 
>Do not include words that could create confusion between your LLC and any government business. 
>Words like ‘bank, attorney, university’ are restricted as well. 
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.

Where can I file my LLC name?

Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.  

How can I know if my URL name is available?

As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website. 

Can I mail the LLC Certificate of Formation to the Secretary of State?

No. Never mail these documents or payments to the Secretary of State directly. 

Why do I need an EIN?

The reason you might need an E.I.N. is that it would help for three reasons:
>business bank application for a business account
>to file or manage federal taxes, state and franchise taxes, and additional taxes
>Hiring employees or agents

How do I get an EIN when I do not have a Social Security number?

You are not required 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.

I already have an EIN for a sole proprietorship; what now? 

Note that an LLC is different from a sole proprietorship. If you already have an EIN for your sole proprietorship, the IRS will require you to get a new one when your convert to an LLC. 

Do foreign applicants need an SSN to get an EIN?

International EIN applicants do not need an SSN to get an EIN.

What is an IRS?

The IRS is the one that will issue your EIN. You can request an EIN from the IRS ONLINE or download the FORM, fill it out, and send it by mail or fax.

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