How to Start an LLC in Arkansas (Step-by-Step Guide)

If you’re considering forming an Arkansas LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.

To establish your LLC successfully, you must choose a unique business name, designate a registered agent, file a Certificate of Organization, and file a BOI Report.

But there’s more.

Filing your LLC Certificate of Organization in Arkansas costs about $50 when filed by mail, and it takes 2-3 weeks to be approved. Filing online costs $45 and takes 3-7 business days to be approved.

This guide compiles all the information you need to start an LLC in Arkansas today.

What Are the Steps to Start an LLC in Arkansas?

To start an LLC in Arkansas, you would need to:

• Step 1. Choose and search for a unique name
• Step 2. Designate an Arkansas registered agent
• Step 3. File Arkansas LLC Certificate of Organization with the state
• Step 4. Create an Operating Agreement
• Step 5. Get an EIN from the IRS
• Step 6. File a BOI Report
• Step 7. File annual franchise tax reports

Let us dive more in-depth into these steps so I can show you how to get them:

Step 1: Choose a Unique Name for Your Arkansas LLC

Choosing a name for your LLC is an essential first step. It needs to be unique and not already used by another business in Arkansas.

Start by searching for name availability. You can do this for free through the Arkansas Secretary of State’s website. Make sure your name is not too similar to that of existing businesses.

Follow these naming requirements:

• Your name must include “Limited Liability Company,” “Limited Company,” “LLC,” or “LC.”
• If you offer professional services, use “Professional Limited Liability Company,” “PLLC,” or “PLC.”
• Avoid words that could confuse your business with a government agency.

If your name includes specific words, such as “bank” or “engineer,” you’ll need special approval.

Once you choose a name, you can reserve it by filing an Application for Reservation of LLC Name through the Secretary of State. This holds the name for 120 days while you finalize your LLC.

Applications for a limited liability company name reservation cost $22.50 if completed online. The fee is $25.00 if you submit a paper form to reserve the name.

Consider registering a fictitious name (DBA) if you plan to operate under a different name. To apply, you’ll need a registered business name first. The fee is $22.50 online or $25.00 by mail.

Also, consider securing a trademark for extra protection against others using your name. This can help safeguard your brand as you grow your business.

Step 2: Designate a Registered Agent for Your Arkansas LLC

A registered agent is a person or business that acts as your LLC’s official point of contact. They receive important documents for your business, such as legal notices and tax forms.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agents in Arkansas:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for Arkansas Registered Agents

Arkansas law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What registered agents do I recommend for Arkansas?

I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.

Step 3: Prepare and File the Arkansas LLC Certificate of Organization

To officially establish your LLC in Arkansas, you must file a Certificate of Organization. This document registers your business with the state and includes essential details such as your LLC’s name, address, registered agent, and members’ or managers’ names.

To file your Certificate of Organization in Arkansas, follow these steps:

Step #1. Complete the Form: Obtain and complete the Certificate of Organization form from the Arkansas Secretary of State website.

Include the following:

• Name of your LLC
• The principal address of your business
• Registered agent’s name and address
• Name and title of at least one member
• Your Federal Employer Identification Number (EIN)

Step #2: File Online or by Mail: You can file your Articles of Organization online through the Arkansas Secretary of State website or by mailing the completed form to:

Secretary of State
1401 West Capitol, Suite 250
Little Rock, AR 72201 

Step #3: Pay the Filing Fee: The fee is $50 when filing by mail, and approval takes 2-3 weeks (plus mail time). Filing online costs $45, and approval takes 3-7 business days.

Once your articles are filed, the state will review and approve them. This process usually takes a few business days. After approval, your LLC is officially recognized, and you can start your business activities, obtain your EIN, open a bank account, etc.

Step 4: Prepare Your LLC Operating Agreement

An Operating Agreement is a crucial document for your Arkansas LLC. It outlines the ownership and management structure of the business. This internal document helps clarify roles and responsibilities among the members.

While not legally required in Arkansas, an Operating Agreement is highly recommended. It adds credibility to your LLC and can protect your assets.

Here are some key components to include in your operating agreement if you choose to prepare one:

• Ownership Structure: Listing all members and their ownership percentages.
• Management Roles: Specify who will manage the LLC. This can be member-managed or manager-managed.
• Voting Rights: Define how decisions will be made. Will all members have equal votes?
• Profit Distribution: Explain how profits and losses will be shared among members.
• Meeting Procedures: Outline how often meetings will occur and how members will be notified.
• Amendment Process: Describe how changes can be made to the agreement in the future.

It’s a good practice to keep this document updated. Should your business structure change or if there are new members, revise the agreement accordingly. This ensures everyone is on the same page and reduces potential disputes.

Drafting the Operating Agreement may take some time, but it is worth the effort for your business’s stability. Consider consulting with a legal professional to ensure it meets all your needs.

Step 5: Obtain an EIN for Your LLC

An Employer Identification Number (EIN) is a unique number the IRS assigns. It identifies your business for tax purposes. For an LLC in Arkansas, obtaining an EIN is essential.

You will need an EIN to open a bank account, hire employees, file taxes, and apply for business licenses and permits.

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within four business days.

Step 6: File a BOI Report

After setting up your LLC in Arkansas, you must file a Beneficial Ownership Information (BOI) report. This is a federal requirement for new LLCs.

You must submit this report to FinCEN within 90 days of forming your LLC. Filing is free and can be done online at the FinCEN website.

Here’s what you need to prepare:

• Company Information: Name, address, and formation date.
• Beneficial Owners: Full names, addresses, dates of birth, and identification numbers.

Gather this information along with your LLC formation documents. This will help streamline the filing process.

Completing the BOI report is essential for maintaining compliance with federal regulations. It ensures transparency about who owns and controls your LLC. Take the time to do this correctly to avoid any potential penalties.

Step 7: File Annual Franchise Tax Report for your Arkansas LLC

In Arkansas, you must file an Annual Franchise Tax Report for your LLC annually. This report is required under state law and comes with a flat fee of $150.

The report is due by May 1st each year. Your first report is due the year after your LLC is formed.

For example, if your LLC was approved on January 10, 2024, your first report is due by May 1, 2025. If formed on November 22, 2024, it’s also due May 1, 2025.

You can start filing as early as January 1st each year. The $150 tax is due regardless of your LLC’s earnings or activity.

Postcard reminders are sent every January to the contact person in your LLC’s formation documents. These reminders are a courtesy, so set your reminders to avoid missing the deadline.

You must ensure that you file and pay your Annual Franchise Tax Report on time. Keeping your LLC compliant helps maintain good standing with the state.

What are the Different Methods To Start an Arkansas LLC?

You have several options when starting an LLC in Arkansas. Each method has its benefits and drawbacks. Here’s a closer look at the different methods available to you.

DIY LLC Formation in Arkansas

You can choose to form your LLC independently. This method involves filing the Certificate of Organization with the Arkansas Secretary of State’s office.

All by yourself, no third party!

Pros:

• Cost-Effective: You save money by not hiring anyone.
• Control: You have complete oversight of each step.
• Learning Opportunity: You gain knowledge about the process.

Cons:

• Time-Consuming: It may take longer if you are unfamiliar with the process.
• Complexity: You must ensure all forms are correctly filled out.
• Privacy issue: If you serve as your registered agent, you risk having your address out there.
• Lack of Guidance: You might miss the necessary steps.

Using a Professional/Online LLC Formation Services

Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.

Pros:

• Convenient: They manage the filing, saving you time.
• User-Friendly: Most platforms have easy-to-understand instructions.
• Support Available: Many offer customer service for questions.
• Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised

Cons:

• Costs: You’ll pay a service fee.
• Variable Quality: Some services may not be as reliable as others.

Hiring an Attorney

Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.

Pros:

• Expertise: An attorney knows the legal requirements and can avoid pitfalls.
• Customization: Your LLC can be tailored to your specific business needs.
• Support with Complex Situations: Ideal for businesses with unique circumstances.

Cons:

• Higher Costs: Legal fees can be expensive.
• Dependence on Others: You may rely heavily on the attorney’s schedule.
• Potential Delays: The process may take longer due to attorney workloads.

What is The Cheapest Alternative Way to Form an LLC in Arkansas?

If you’re looking to start an LLC in Arkansas on a budget, the most affordable option is to do it online. By filing the Certificate of Organization directly with the Arkansas Secretary of State, you can keep costs between $45 and $50, depending on your needs.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services in Arkansas?

There are a myriad of Arkansas LLC services from which to choose. Choosing the wrong one can affect your Arkansas LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best Arkansas LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for 1 year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Northwest Registered Agent stands in Arkansas LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.

How Much Does It Cost To Form an LLC in Arkansas?

Starting an LLC in Arkansas includes several costs you should consider. Here’s a breakdown of the main fees involved.

Item	Cost
New LLC Filing Fee (Certificate of Organization)	$45 online or $50 by mail
Name Reservation (optional)	$22.50 online or $25 by mail
Trade Name Filing	$22.50 online or $25 by mail
LLC formation service	$39 (via Northwest)
Registered Agent (optional)	$0 (via Northwest)
Annual Franchise Tax Fee	$150
Total Estimated Cost	$230 – $300

When forming a new company in Arkansas, budgeting about $230-$300 for the first year is ideal. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.

That said, the most significant (and essential) expense for every Arkansas business owner is filing the Certificate of Organization, which costs $45 if filed online and $50 if filed by mail.

Pros and Cons of Forming an LLC in Arkansas

6 Important Things To Do After Creating Your Arkansas LLC

After you create your Arkansas LLC, several key steps must be taken. These actions will help you comply with legal requirements and set up your business for success. Here are six essential tasks to complete.

1. Research the Best Licenses and Permits for Your Business

Starting a business in Arkansas may require specific licenses and permits. Research what is necessary for your particular industry. This could include local, state, or federal permits.

First, check with the Arkansas Secretary of State and your local county clerk’s office. They provide information about required permits for different types of businesses. Common examples include health permits, sales tax permits, and professional licenses.

List the licenses you need, along with their application processes and costs. Some require a fee or inspection, so be prepared. Ensuring you have the correct permits will keep your business running smoothly and legally.

Consult the Arkansas Small Business Guide for more information.

2. Create Business Accounts for Your Arkansas LLC

Setting up a separate bank account for your LLC is crucial. This keeps your finances distinct from your business finances and simplifies tracking income, expenses, and tax reporting.

Before opening an account, gather the necessary documents. Most banks require your LLC’s operating agreement, Articles of Organization, and EIN (Employer Identification Number).

Choose an account that offers features suited to your business needs. Look for low fees, online banking options, and the ability to manage multiple transactions easily. Having a dedicated business account enhances professionalism and financial protection.

A dedicated business account streamlines your financial management and simplifies tax preparation.

Having all your business transactions in one place lets you easily track your income and expenses, ensuring everything is well-organized and accessible when tax season rolls around.

3. Understanding Arkansas Tax Requirements and Managing Your Taxes

As an LLC owner, it’s essential to understand tax obligations. Arkansas has state income taxes that apply to LLCs. You may also need to pay sales tax if you sell goods.

To begin, apply for your EIN. This number identifies your business for tax purposes. You can get it for free from the IRS.

Stay aware of self-employment taxes as well. These are linked to your income and can affect your overall tax burden.

4. File your Arkansas Annual Franchise Tax Report

You must file an annual franchise tax report with the Arkansas Secretary of State yearly. This is a requirement for all LLCs. The filing fee is typically $150, regardless of business size.

You should file this report by May 1 each year to avoid penalties. Be sure to include any changes to your business information in this report. This keeps your records accurate and up-to-date.

There is a penalty if your LLC doesn’t pay this fee.

The penalty is a one-time charge of $25. Then, interest is charged at 10% per year on the outstanding balance.

5. Get Business Insurance for an LLC

Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities. Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.

Your insurance needs will vary based on your business operations.

For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

6. Setup Your Business Online Presence (optional)

Building an online presence can help your Arkansas LLC grow. Start by creating a professional website. Ensure it includes vital information such as services, contact details, and social media links.

Next, consider setting up social media accounts on platforms relevant to your audience. This allows you to engage with customers and promote your business.

Additionally, you might want to explore online advertising options. Pay-per-click ads and social media marketing can reach a broader audience. This step, even optional, can significantly enhance customer visibility and engagement.

Arkansas LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

Choosing the proper structure is vital to starting a business. Here are some standard options in Arkansas.

Sole Proprietorship

An Arkansas sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.

However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk. It’s easy to set up and manage, but it does leave you personally responsible for any business debts.

Partnership

An Arkansas partnership involves teaming up with one or more people to run a business.

Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.

However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too. Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.

LLC (Limited Liability Company)

An LLC offers a blend of flexibility and protection.

Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.

LLCs are more formal than sole proprietorships or partnerships but offer management and tax treatment flexibility. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.

S-Corporation

An S Corporation is a more structured business form.

Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.

This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.

Corporation

Arkansas corporations are the most complex structures, suitable for larger businesses aiming for significant growth.

Imagine a big company with many shareholders. A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.

Corporations can raise capital more efficiently by issuing stock and can offer employee benefits.

However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.

My Final Thoughts: Forming an LLC in Arkansas

Starting an LLC in Arkansas is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.

To start your LLC in Arkansas, follow these key steps:

• Choose a unique name for your LLC.
• Designate a registered agent.
• File Certificate of Organization with the state.
• Obtain an Employer Identification Number (EIN).
• Draft an Operating Agreement.
• File a BOI Report
• File the Annual Franchise Tax Report

The filing fee for the Certificate of Organization is $45 if filed online and $50 by mail.

After forming your LLC, prepare for Annual Franchise Tax Reports, which cost $150 yearly.

Forming an LLC in Arkansas is straightforward and cost-effective. By taking these steps, you establish a solid foundation for your business, gain legal protections, and have flexibility in managing your company.

Learn More About Starting an LLC in Arkansas

If you need additional help to start an LLC in Arkansas, check out these valuable resources:

Frequently Asked Questions

Can I change my registered agent in Arkansas?

Yes, you can change your registered agent in Arkansas. To update the records, you must file the appropriate form with the Arkansas Secretary of State and pay a small fee.

How do I change my Arkansas LLC’s name?

You must file an amendment with the Arkansas Secretary of State to change your LLC’s name. This involves completing and submitting the required form along with the filing fee.

How do I renew my Arkansas LLC?

Renewing your LLC involves paying the Arkansas Annual Franchise Tax. You must file this report every year to maintain good standing. Missing the deadline can result in penalties.

How do I dissolve an LLC in Arkansas?

You must file a Certificate of Dissolution with the Arkansas Secretary of State to dissolve your LLC. Make sure to follow all necessary steps to settle any liabilities before officially dissolving your LLC.

How do I add a member to an Arkansas LLC?

To add a member, you typically need to update your operating agreement to reflect the new member. Depending on your LLC structure, you may also need to file an amendment with the Arkansas Secretary of State.

How do I add a DBA to an LLC in Arkansas?

To add a DBA (Doing Business As), you must file a Certificate of Assumed Name with the Arkansas Secretary of State. This allows your LLC to operate under a different name while maintaining its legal status.

Can a minor own an LLC in Arkansas?

Yes, a minor can own an LLC in Arkansas, but they typically need an adult to act on their behalf in legal matters. You may need to check specific laws or consult a legal professional for guidance.

When is the Arkansas Annual Franchise Tax Report due?

The Arkansas Annual Franchise Tax Report is due on May 1st each year. File on time to avoid penalties and maintain your LLC’s good standing.

Does LLC expire in Arkansas?

An LLC does not automatically expire in Arkansas as long as you continue to file your Annual Franchise Tax Report and pay the associated fees. Failing to do so can lead to administrative dissolution.

Can a non-resident open an LLC in Arkansas?

Yes, a non-resident can open an LLC in Arkansas. However, you will need a registered agent with an Arkansas address to handle legal documents.

Can I buy a house or car with my LLC in Arkansas?

You can buy a house or car through your LLC in Arkansas. This can provide liability protection and potential tax benefits. Ensure that you maintain proper documentation for these transactions.

Can you have multiple businesses under one LLC in Arkansas?

You can operate multiple businesses under one LLC in Arkansas. However, you may need to register DBAs for each business name to ensure their legal recognition.

Is Arkansas an excellent state in which to form an LLC? Is it worth it?

Arkansas offers benefits like lower filing fees and favorable tax conditions, making it a reasonable option for forming an LLC. It is worth considering based on your business needs and structure.

Can one person form an LLC in Arkansas?

Yes, one person can form an LLC in Arkansas. This is known as a single-member LLC. It allows you to have liability protection while maintaining complete business control.