Guide to Starting an Arkansas LLC

Step 1: Name your Arkansas company

To start an LLC in Arkansas, begin by naming your company. For obvious reasons, every business requires a name before registering with the state. Picking a name for your LLC in Arkansas is one of the most fun, exciting, and important parts of the formation process.

Start by taking some time to brainstorm a few ideas. Your business name should adequately convey what your LLC offers while capturing the right branding voice for your company/industry. 

Take a moment to see our tips and tricks for naming your LLC.

LLC Business Name Conventions

Arkansas has a few naming conventions that you have to follow. Specifically, your LLC’s name must:

• Be distinguishable from the name of any other business that is on file with the Arkansas Secretary of State (SOS)
• Contain the phrase “limited liability company,” “limited company,” or
• Include one of the following abbreviations: “L.L.C.,” “LLC,” “L.C.,” or “LC.”

Check online to see whether your desired business name is available by using our Arkansas Business Entity Search resource page. You should also search for your business’s name on the Arkansas Secretary of State’s website. Finally, you can call the Arkansas Secretary of State’s office directly.

Note: It’s always a good idea to come up with a few potential names (or at least one backup), so you have multiple options in case the name you want is already taken.

Performing a Name Search

It’s crucial to ensure that your chosen business name is unique within Arkansas. You can perform a name search through the Arkansas Secretary of State’s online database or contact their office directly for assistance. We show you how to perform a name search on our Arkansas Business Entity Search page. This step is essential because Arkansas requires that your LLC’s name be distinct from existing entities registered in the state to avoid potential conflicts. 

Trademarks

Even if the name you want to use appears to be available after you’ve searched the Secretary of State’s database, there’s no guarantee that someone hasn’t already trademarked it at the state or federal level. While there’s no central place to check for all trademarks (some businesses even consult with trademark-specialized lawyers), you can take some measures yourself. 

For instance, you can search for state-level trademarks through the Arkansas Secretary of State website. To check for federal trademarks, search the United States Patent and Trademark Office (USPTO) online resource database. You can also apply for your own state trademark via the Arkansas SOS. 

In addition to checking state and federal databases, it’s a good idea to conduct extensive internet searches for your desired business name, including checking domain names, social media websites, and online phone directories.

Reserving a Business Name for Your Arkansas LLC

Starting an LLC takes time and planning. If you have the perfect name for your LLC but aren’t ready to form it yet, consider reserving the name instead. That way, no one else can take it before you’re ready to register your business. With our online name reservation service, you can reserve your ideal LLC name for up to 120 days while you get ready to launch your company.

Choosing a Domain Name for Your Business Website

All modern businesses should have an online website presence to attract customers and maximize their market share. Consequently, it’s a good idea to make sure you can find an online domain name that matches your LLC’s name. A well-chosen domain name is crucial for branding and memorability, helping to establish a strong online identity that customers can easily recall. It also adds credibility and professionalism to your business, instilling trust in potential clients. Overall, investing in a website and selecting a fitting domain name are essential steps in establishing a strong online presence and boosting your new business’s growth and success.

Filing for a Fictitious Name

Sometimes, businesses can benefit from having an extra name. These names allow commercial ventures to enjoy some versatility while solidifying their reputation with their customers. Most states call these alternative monikers “doing business as” names (DBA names), but Arkansas simply refers to them as “fictitious names.”

Examples of when a fictitious name would be used include: 

• A business with the official name “ABC Toys, LLC” wants to sell online as “ABC Toys”
• A business with the official name “XYZ Computers, LLC” wants to sell MacBooks as “XYZ Macs”  

If obtaining a fictitious name sounds right for your situation, you’ll need to file an Arkansas Application for Fictitious Name with the Arkansas Secretary of State. Learn more about this process with our step-by-step guide on how to get a DBA name for your business in Arkansas.

Step 2: Appoint a registered agent in Arkansas

Appoint a registered agent for your Arkansas LLC. Also known as an agent for service of process, a registered agent is an individual or business that accepts important legal notices on behalf of the business. All LLCs in Arkansas are required to have a registered agent. 

Arkansas Registered Agent Requirements

To serve as a registered agent in Arkansas, an individual or business must:

• Have a physical address within Arkansas (must be a physical street address; a P.O. box will not suffice) 
• Be available during regular business hours to accept all incoming documents and forward them to the LLC
  • Examples of critical documents include lawsuit notices, other legal documents and service of process notices, and notification of annual report deadlines.

Can I serve as my own registered agent?

While there’s no law prohibiting LLC owners from serving as their own registered agent, there are several reasons why this isn’t the best idea.

For starters, if your business moves or the address you have on file changes, you’ll need to remember to change the registered agent address with the SOS. Furthermore, having to be available during all regular business hours to receive legal notices can prove to be inconvenient.

Perhaps most importantly of all, being served with notices such as lawsuit notifications in front of customers or others can be incredibly embarrassing and distressing as a small business owner. 

Benefits of a Registered Agent Service

Rather than serving as your own registered agent or asking a friend or family member to do so, many business owners opt to use a professional registered agent service. This approach offers several advantages.

For one, you have more important things to do than sit in an office waiting for documents to arrive. Second, making a mistake (notably, not being present to receive a notice) as a registered agent can be costly. Failing to respond to government notices can lead to fees, sanctions, and lawsuits. Those are the last things your business needs.

And, of course, using professional services will help you avoid the aforementioned embarrassment of being served with legal notices in front of others. 

If you’re looking for a quality registered agent service, then look no further. Let us help you get a registered agent in Arkansas.

What if the state can’t find my Arkansas registered agent?

A registered agent in Arkansas has one primary job: be present to accept important correspondence. Unfortunately, registered agents are unavailable more often than you might think.

This can happen for a variety of reasons. Sometimes your registered agent may go on vacation or become sick without notifying anyone. 

Whatever the reason, if the registered agent is unavailable, a whole host of negative outcomes can follow. At the very least, your business will miss out on critical legal and business notices. Furthermore, you may fall out of good standing with the state of Arkansas. The state may even take action against you and your business if it can’t contact your registered agent. In some situations, it may initiate a lawsuit against your LLC or impose financial penalties. In the worst-case scenario, the state may dissolve your LLC entirely for failing to meet the state’s requirements for LLCs.

Step 3: File Arkansas Certificate of Organization

File your Arkansas Certificate of Organization. This formation document officially registers your Arkansas LLC with the state, so it’s important to complete it accurately. Mistakes can delay the formation of your LLC or lead to several administrative consequences. Fortunately, we can take care of the filing process for you with our LLC formation service. Check out our LLC formation plans.

The state filing fee to file an Arkansas Certificate of Organization is $45 (as of this writing). If you choose to use our LLC formation plan, you can opt to expedite our processing speed for an extra fee. Normal processing time for our filings is 2 to 3 weeks. For an extra $50, you can reduce our processing time to 6 to 9 business days. And for an extra $100, you can further shrink processing time to 2 to 5 business days. To learn more about Arkansas’s other LLC fees, see our guide to Arkansas LLC costs.

What information do I need to include in my Arkansas Certificate of Organization?

When you fill out your Arkansas Certificate of Organization, you’ll need to provide: 

• The name of your Arkansas LLC
• Your business address
• The name and address of your registered agent
• The name and address of at least one officer for franchise tax purposes
• Organizer signature(s) 
• Lastly, don’t forget to attach any additional statements or documents that may be required. For example, if you want to include more than 3 initial officers on your State of Arkansas Certificate of Organization, you must attach an additional page to list them. Additionally, all Arkansas LLCs must pay an annual franchise tax. Accordingly, an LLC must also include a Limited Liability Company Franchise Tax form at the time of submitting its formation documents.

Amending and Updating your Certificate of Organization

Even if you accidentally filed your LLC’s Certificate of Organization incorrectly, we can give you a hand. Our amendment filing service lets you easily make changes and updates to your business’s name and address. You can also tweak your ownership structure and the name and address of your registered agent. Moreover, you can opt to use our Worry-Free Compliance service. This service can help you stay compliant with the annual filing requirements in Arkansas. It also gives your business two free yearly amendments so you can update your business’s Certificate of Organization when the occasion requires.

Member-Managed or Manager-Managed? 

LLCs commonly have two forms of management. With member-managed LLCs, the owners (or members) exercise control collectively over the company’s decisions. Alternatively, an LLC can opt for a manager-managed structure by appointing one or more of the members to manage the LLC or hiring an outside manager. In Arkansas, LLCs are member-managed by default, and most LLCs begin operations as member-managed enterprises. 

Step 4: Create an operating agreement

Create an operating agreement for your business. While not required by Arkansas law, this document lays out all pertinent details regarding how your LLC will be run. Operating agreements also further help to protect your personal assets by showing the court that you took time to draft this formal document for your business. They can even help attract investors and future business partners.

What do operating agreements include?

Operating agreements help clarify things like:

• How ownership of the LLC is divided among the members
• How profits are divided
• How members can enter and exit the business
• Under what conditions the business can terminate
• How the business should wind up (as part of the termination process)
• The voting rights of the LLC’s members or partners
• How the business’s members make important decisions
• Your LLC’s management structure (member-managed or manager-managed)

Take a few moments to learn more about the incredible benefits of operating agreements. Without an operating agreement, your business will have to follow Arkansas’s default guidelines in the state’s Uniform LLC Act. These default provisions might not align with what you and the other members want for the business. 

✓ Operating agreement template

Once you’ve decided to draft an operating agreement, you may be wondering where to start. What provisions should you include? These are the kinds of questions we love to solve. Our LLC operating agreement template gives you the framework for filling out this all-important document. With our template, you can address issues like the division of profits and losses, the ownership structure of the LLC, and each member’s rights and responsibilities.

Do I need an operating agreement even if I’m the only owner? 

If you’re going into business on your own, you may find it tempting to avoid drafting an LLC operating agreement altogether. After all, why worry about avoiding disputes when there’s no one to have a dispute with?

Nevertheless, sole owners should still consider drafting an operating agreement for several reasons. First, having an operating agreement allows you to bring in new members on your terms. By having an operating agreement on hand before you bring on new members, you won’t need to worry about negotiating an agreement with them.

Furthermore, investors and business partners alike will use your operating agreement to size up your business. On top of that, many banks require you to have an operating agreement before getting a business bank account with them. And if you are somehow incapacitated, a third party can use your operating agreement to determine how to manage the LLC until your return.

Finally, in the event that you find yourself in a business lawsuit, an operating agreement can serve as valuable evidence that you and your business are, indeed, separate entities. In essence, it makes your business look more “official.” Without an operating agreement, the court may view your LLC more like a sole proprietorship. 

Step 5: Apply for an EIN

Register your company with the federal government by obtaining an Employer Identification Number (EIN). Much like a Social Security number (SSN) does for individuals, an EIN identifies your business to the Internal Revenue Service (IRS). And just as individuals place their SSNs on their tax returns, businesses use their EIN to file taxes with the IRS. In addition to streamlining tax payments, EINs allow your LLC to hire new employees and get a business bank account.

While single-member LLCs with no employees that opt to be taxed as sole proprietorships usually aren’t required by law to obtain an EIN, it’s a good idea to get one, anyway. Most banks require an EIN to open a business bank account, and investors may be more confident in your company if you have a business bank account. 

Want to get an EIN without dealing with the IRS? We understand completely. Let us handle the hassle for you with our quick and efficient EIN service.

Get a business bank account

Establishing a dedicated business bank account is a critical and foundational step when forming an LLC in Arkansas. This practice not only streamlines your financial affairs but also reinforces the separation between personal and business finances. By maintaining distinct accounts, you protect your personal assets and maintain the limited liability status of your LLC.

Setting up a business bank account is a straightforward process, and to further simplify it, consider utilizing ZenBusiness. Our platform offers a discounted bank account solution that includes benefits like unlimited transactions, online banking, and a debit card. And if you’re looking for even more help managing your finances, check out ZenBusiness Money. This innovative platform enables you to create and send custom invoices, track tax-deductible expenses, and manage all other financial aspects of your small business.

Handling State Taxes

Arkansas requires all businesses — including LLCs — to pay the state’s yearly franchise tax. This is done by filing an annual franchise tax report and paying the fee ($150 for LLCs).

When filing your annual LLC franchise tax report, make sure you have your LLC’s management and registered agent information handy. And be extra careful to submit your LLC’s franchise tax report on time (it’s due on or before May 1, each year). Late filing can lead to penalties, interest, and even legal consequences.

If you plan to hire employees to work for your LLC, you will need to file for Arkansas Workers’ Compensation Insurance and withhold your employees’ income taxes. To get started, register for withholding tax with the Arkansas Department of Finance and Administration.

Finally, if your LLC plans to sell products to Arkansas customers, you will need to collect sales and use tax. As with withholding taxes, the first step in paying sales tax is registering with the Arkansas Department of Finance and Administration.

Step 6: Submit your LLC’s beneficial ownership information report

As of 2024, there’s a new filing requirement for LLCs and other small businesses: submitting a beneficial ownership information report, or BOI report. This requirement was introduced by the Corporate Transparency Act, which aims to reduce and deter financial crimes by making it tougher for groups to use shell companies to hide illicit activities like money laundering. To accomplish this, the BOI report asks businesses to provide information about their beneficial owners. 

A beneficial owner is anyone who exerts substantial control over the business, gets significant economic benefit from its assets, or holds 25% or more of the ownership interest. For each of your owners, you’ll be asked to provide the name, address, and identifying documents. You can report this information online or by uploading a PDF version of the form to the Financial Crimes Enforcement Network (FinCEN). 

There isn’t a filing fee for this form, and you only have to file it on the federal level. But failing to file can have substantial consequences, so be sure to file on time. For LLCs created in 2024, you’ll have up to 90 days after Arkansas approves your Certificate of Organization, while LLCs that organize in 2025 and beyond will have just 30 days. Any LLCs that organized before 2024 will have until January 1, 2025. 

To learn more about the BOI report, you can consult FinCEN’s website. And if you’d like help for completing this step, try out our BOI report filing service.

Pros and Cons of Forming an Arkansas LLC

An Arkansas LLC is a popular business structure, but it’s not quite right for every business entity. Before you form one, you should carefully evaluate an LLC’s advantages and disadvantages. 

Pros

A key advantage of an Arkansas LLC is the protection of personal assets. Owners usually aren’t held personally liable for business debts, which provides significant peace of mind. Tax flexibility is another plus; LLCs can choose to be taxed as a sole proprietor, partnership, C corporation, or S corporation, allowing for the most advantageous tax treatment (which varies from one business to another). 

Operational ease is another big draw, with fewer state-imposed formalities than corporations. This often makes LLCs especially attractive to small businesses and entrepreneurs.

Cons

On the flip side, while forming an LLC in Arkansas offers certain protections, it also brings complexities, particularly in legal compliance. Even though an LLC is easier than a corporation, staying abreast of state regulations can be daunting, especially compared to the relative simplicity of sole proprietorship or partnership. 

Raising capital can also be challenging, as LLCs lack the ability to issue stock. This often limits an LLC’s opportunities for third-party investors (many investment groups and individuals prefer corporations). Additionally, the liability shield of an LLC isn’t absolute. Improper mixing of personal and business finances or neglecting formalities can jeopardize this protection.

Cost to Form an LLC in Arkansas

The amount of money you need to start an LLC in Arkansas varies on several factors. At the very least, you will need $45 to file a Certificate of Organization. Note that filing fees can vary from time to time. To obtain the most recent list of fees, visit the Arkansas Secretary of State website. 

However, here are the most common ones you can expect with an LLC. 

• Certificate of Organization: $45 online, $50 by mail
• Registered Agent Service Fee: Varies, typically $100 to $300 annually.
• Annual Franchise Tax: A minimum of $150, due each year

These are the most common costs associated with starting and maintaining an LLC in Arkansas. However, it’s important to note that these costs can vary significantly from business to business, including fees for licenses and permits, tax burdens, and so on.

Ongoing Legal Requirements

Maintaining an LLC in Arkansas requires attention to several key legal aspects. Annual franchise tax reports are mandatory, and failure to file them can lead to penalties. Keeping up-to-date records of business transactions and decisions is important for legal compliance. 

Additionally, understanding and adhering to state and federal tax obligations is essential. Tax obligations vary from one business to another, so it’s highly recommended to chat with a state tax attorney or CPA to get customized guidance and stay informed about updates to the tax code.

Finally, regularly reviewing changes in business laws and ensuring compliance with these laws is vital to avoid legal issues and maintain the LLC’s good standing.

Popular Arkansas Cities for Businesses

Here are some of the largest population areas in Arkansas and their potential business categories:

• Little Rock, AR
  • Little Rock is the capital and largest city in Arkansas.
  • Promising business categories include healthcare and medical services, technology and software development, retail, and hospitality.
• Fort Smith, AR
  • Fort Smith is the second-largest city in the state.
  • Key business opportunities can be found in manufacturing, healthcare, logistics, and retail.
• Fayetteville, AR
  • Fayetteville is known for its vibrant economy and is home to the University of Arkansas.
  • Prominent business sectors include education and technology startups, as well as food and beverage establishments.
• Springdale, AR
  • Springdale is located in the northwest part of the state and is part of the larger Fayetteville-Springdale-Rogers Metropolitan Area.
  • Opportunities in the food processing industry, agriculture-related businesses, and retail can be explored in Springdale.
• Rogers, AR
  • Rogers is another city in the northwest region of Arkansas.
  • It’s a hub for retail businesses, particularly because it’s home to the headquarters of Walmart, and there are opportunities in various retail-related sectors.
• Jonesboro, AR
  • Jonesboro is in the northeastern part of Arkansas.
  • Emerging sectors include healthcare services, manufacturing, and logistics due to its strategic location.
• Conway, AR
  • Conway is located near Little Rock and is known for its educational institutions.
  • There are business opportunities in education, healthcare, and technology-related fields.
• North Little Rock, AR
  • North Little Rock is adjacent to the capital city and offers various business prospects similar to Little Rock, including healthcare and retail.