When you've worked hard to build an idea into a viable business, finally bringing it to life can be exciting. But, that doesn't change how intimidating it is to navigate state laws on top of everything else. The good news is that establishing a limited liability company (LLC) in Arkansas is far more straightforward than it seems once you understand the state’s requirements and how each step helps to protect and grow your business.
Here's everything you need to know to start an LLC in Arkansas, from where to file formation documents to which business licenses you might need and how to stay legally compliant.
The basics of Arkansas LLCs
Personal liability protection, tax flexibility, credibility, and operational simplicity are only some of the benefits of forming an LLC. Similar to a corporation, an LLC is a separate legal entity under Arkansas law, which helps to shield its owners from business debts and liabilities.
However, similar to a sole proprietor, LLCs have more flexibility in how they run their business. As pass-through entities, they can also “pass” their gains and losses through to their owners' personal tax returns or choose to elect corporate taxation.
In addition to the benefits inherent to an LLC, Arkansas offers other unique advantages:
- Diverse incentives for Arkansas business
- Graduated income tax, so small businesses have a chance to grow
- Comparatively low income tax rates even for the top margins
- No state property tax
- Modern and efficient filing systems
- Low cost of doing business
How to start an Arkansas LLC in 6 steps
You officially form your Arkansas limited liability company when you file a certificate of organization with the Secretary of State (called articles of organization in other states).
But there’s more to it than that. Check out our guide below for an outline of the process, and look to LegalZoom’s LLC formation service when it’s time to file the paperwork—plans start at $0 + state filing fees.
Step 1: Choose your business name
Before you can file a certificate of organization, you can conduct an Arkansas business search to confirm your desired name’s availability in the state. Then, make sure it complies with the following Arkansas naming guidelines:
- It must include the words, “limited liability company,” “limited company,” or “limited” or the abbreviations “LLC” (with or without periods), “LC” (with or without periods), or “Ltd.”
- A professional LLC name must include the words, "professional limited liability company," "professional limited company," or the abbreviations "P.L.L.C." or "P.L.C." (with or without periods).
- The LLC name must be distinguishable from existing business names in the Arkansas Secretary of State’s records. This is where an Arkansas business entity search can help you.
- Certain words require additional approvals, such as “bank,” “trust,” “engineer,” “engineering,” and “Razorbacks.” Additionally, medical and insurance businesses must obtain certification and comply with state statutes regarding these industries.
- Words that imply association with a government agency—like “State Department,” “Treasury,” “CIA,” or “FBI”—may be restricted.
If you use LegalZoom’s LLC formation service, we’ll conduct the entity search and ensure it meets the above requirements for you. You can also try our free business name generator or even run a preliminary search yourself using our free business lookup tool:
Free Arkansas Business Name Check
Use our free name check tool to search the Arkansas Secretary of State database and see if your business name is available.
By clicking "Check Availability," I agree to LegalZoom's Terms of Use. This search is a preliminary check of state databases and does not include variations or trademarks. Results do not guarantee name availability or compliance with legal requirements.
Once you find a business name, you can either begin your LLC formation process or reserve the business name for up to 120 days. To reserve a business name, fill out the online application for the reservation of an LLC name (Form LLC-05) or mail the form to the Secretary of State’s office.
In the future, if you want to operate under a business name that doesn’t include the words, “limited liability company” or that’s different from the one you registered under, you can also file an Arkansas fictitious name.
Step 2: Appoint a registered agent
All LLCs in the state must have a registered agent. A registered agent’s job is to ensure someone is always available to formally receive official or legal correspondence on behalf of your business. While you can choose your own registered agent, they need to meet Arkansas requirements:
- A registered agent has a physical place of business in the state with a street address (not a P.O. box).
- The agent must be available at their listed office address during regular business hours.
- The agent can be a commercial or noncommercial registered agent. Commercial registered agents are individuals or entities that serve several clients.
- If a commercial agent, they must act in accordance with the Model Registered Agents Act of 2007 and have a listing statement on file with the Arkansas Secretary of State.
Noncommercial registered agents (typically individuals or entities that serve fewer clients) don’t need to file a listing statement. You can be your own registered agent, but many businesses choose to outsource this role to a professional to protect their personal privacy and take this responsibility off of their plate.
LegalZoom's Rogers-based Arkansas registered agent service meets all state requirements. We scan important documents for virtual access from anywhere and send reminders for compliance deadlines to help keep your LLC in good standing.
Step 3: File your certificate of organization
When you have your business name and Arkansas registered agent, it’s time to file your certificate of organization. This document provides basic information about your LLC and officially forms your business in Arkansas.
You’ll need to provide the following information for your Arkansas LLC registration:
- Company name
- The address for the LLC’s principal place of business
- The name and address of the LLC's registered agent
- The names and addresses of the LLC organizer and at least one member or manager
- Contact information where the annual franchise tax report will be mailed
- The signature of the organizer(s)
You can file the certificate of organization online through the Secretary of State’s website for a $45 filling fee. Alternatively, mail Form LL-01 with a $50 check payable to the Arkansas Secretary of State:
Arkansas Secretary of State
Business & Commercial Services (BCS)
Victory Building
1401 W. Capitol Avenue, Suite 250
Little Rock, AR 72201
If the Arkansas Secretary of State approves the certificate, your LLC becomes a legal business entity. LegalZoom’s LLC service comes with an accurate-filling guarantee; if your certificate is rejected due to our error, we’ll refile with no extra charge to you. Once submitted, it typically takes the Secretary of State one to three business days to process LLC filings.
Step 4: Create an operating agreement
Arkansas doesn't require LLCs to have an operating agreement, but creating one can be essential to protecting your LLC and preventing future disputes. An operating agreement is similar to an internal business plan. It should include detailed information about how the LLC will be managed, operated, and structured.
Even single-member LLCs can benefit from having an operating agreement as it adds another layer of protection from personal liability. For multi-member LLCs, it can prevent internal disputes by creating clarity around the rules of operation, management, transfer of ownership, and dissolution process. Operating agreements give LLCs a chance to name their terms. For example, dissolving a business that doesn’t have an operating agreement form in place means leaving the process up to state law.
An LLC operating agreement should include the following information:
- Basic business information, including its name, purpose, duration, and principal address
- Registered agent’s name and address
- Members’ names, addresses, titles, and contributions
- How profits will be distributed
- Member responsibilities
- Daily operations
- Voting rights
- Guidelines for meetings
- Tax structure
- Procedures for acquiring new members, transferring ownership, and dissolving the company
- Indemnification and liability clauses
If you’re not sure where to start, LegalZoom can help you create an operating agreement that meets both Arkansas laws and your specific business needs. This service is also included in our more comprehensive LLC formation package.
Step 5: Obtain a federal tax ID
An employer identification number (EIN) is a nine-digit code issued by the IRS. Obtaining one isn’t a requirement for all LLCs, but it is needed for multi-member LLCs as well as any business that files corporate taxes or plans on hiring employees. Regardless of these factors, you can use your EIN on legal and financial documentation to avoid supplying your personal Social Security number. EINs also help your business do the following things:
- Open business bank accounts
- Obtain business licenses and permits
- File business credit applications
- Separate your business and personal taxes
You can apply for an EIN through the IRS website, which has instructions for how to apply online, by fax, or by mail. Alternatively, you can also obtain an EIN with LegalZoom. This step is also part of our more comprehensive LLC formation service.
Step 6: Open a business bank account
Arkansas law doesn’t require LLCs to open a business bank account, but it does help keep your personal and business finances separate, set up your business for growth, and make it easier to keep track of your business’ expenses and income. All of these things are critical to protecting your business’ limited liability status and safeguarding your personal assets.
Often, financial institutions ask for the following information in order to open a business bank account:
- EIN
- Proof of identification, such as a passport or driver’s license, for account holders
- Formation documents, like a copy of your Arkansas certificate of organization
- Details about your LLC, including member information
Building a business is enough work as it is. We'll help you start your LLC with confidence.
Helpful tips when starting your LLC
Even though your business formation process is complete, there are a few post-formation moves that can help your business grow:
- Register a domain name. Having an online presence strengthens your marketing and helps potential customers to find your business. Make sure that the domain name matches your business name.
- Obtain a certificate of good standing. A certificate of good standing can help with securing loans, expanding to other states, and even obtaining or renewing business permits or licenses. You can purchase one through your business’ profile on the Secretary of State’s website.
- Consider a foreign LLC. If you’re planning on expanding your business to other states, you’ll have to register as a foreign LLC in those states. Filing requirements and fees vary by state, but you can file for foreign qualification through LegalZoom, which creates and files the necessary paperwork with the applicable state agency so you don’t have to.
- Determine your NAICS code. A North American Industry Classification System (NAICS) code is a six-digit code that classifies your company based on its business purpose. You’ll need this to register for business taxes.
What to do after forming your Arkansas LLC
It’s important to ensure that your LLC is compliant with ongoing state and local regulations, including state taxes, state or local licenses, and annual reports.
Register for Arkansas state taxes
Next, register your business with the Arkansas Department of Finance and Administration through its online portal, Arkansas Taxpayer Access Point (ATAP). This is where you’ll file returns and pay state taxes.
Exactly which taxes you’ll need to file depend on your business activities and size. For example, certain taxes, such as natural gas severance tax, are industry specific. Here are a few common taxes for small businesses:
- Sales and use tax. Arkansas levies a 6.5% tax from the sales of tangible personal property and certain selected services, such as the lease or rental of tangible personal property.
- Unemployment insurance. LLCs with employees can also pay unemployment taxes through ATAP, but first they need to register for an employer account number with the Arkansas Division of Workforce Services.
- Withholding tax. Employers will also need to register with the ATAP to withhold taxes from employee wages.
A CPA or business attorney can give you more specific advice on which taxes apply to your company.
Obtain required business licenses and permits
Based on your business activities, you may also need to secure business licenses or permits with the state or local city and county in which your business operates. Here’s what you might need for your Arkansas LLC:
- Sales tax permit from the state Department of Finance and Administration. You’ll need this $50 permit if your LLC sells taxable goods or services.
- General business license from the city and/or county where your LLC is registered or conducts business. Some areas, such as Little Rock, require additional local licenses.
- Professional or occupational license from the relevant agency. The Arkansas Department of Labor and Licensing oversees most professional licenses, but requirements vary significantly by profession.
- Zoning and building permits, depending on the type of business and its location. These are typically for construction or the commercial use of a space.
LegalZoom’s business license service makes it easy to find the business license you need. We take your information and compile a report with links to every permit or license that applies to your business, along with helpful instructions.
File an annual franchise tax report
Arkansas requires registered LLCs to submit an annual franchise tax report. This requirement applies to all domestic or foreign corporations, LLCs, banks, and insurance companies in Arkansas.
A franchise tax is essentially a tax levied on businesses for the privilege of doing business in the state. In Arkansas, all annual franchise tax reports are due by May 1; late filings will incur a penalty of $25. You can find the online and PDF forms on the Secretary of State’s website.
In addition to paying the annual state franchise tax, your LLC will likely need to renew business licenses and permits yearly with the relevant state or local agency. Check with the applicable agency to determine which permits and licenses need to be renewed, when the deadlines are, and if there are associated costs—or, let LegalZoom help you stay in compliance.
The cost of forming an LLC in Arkansas
Starting an LLC in Arkansas does involve some upfront costs. While the total cost will vary based on your business activities, location, and operating needs, you can estimate the basic formation costs by using the following list:
- Name reservation application (optional): $22.50 online, $25 by mail (one-time fee)
- Certificate of organization: $45 online, $50 by mail (one-time fee)
- Registered agent service (optional): $100 to $300 (annual fee)
- Arkansas sales tax permit: $50
- Business license or permit: Cost varies by type of business, industry, and local jurisdiction (annual fee)
- Annual franchise tax report: $150 (annual fee)
- Certificate of good standing (optional): $25 (one-time fee)
Starting a business takes courage. LegalZoom makes sure the legal details don’t stand in your way, from the day you register until the day you retire.
How to start your Arkansas LLC with LegalZoom
Get your business up and running seamlessly with a little help from LegalZoom. We offer a variety of LLC formation services that range from $0 plus state filing fees to more comprehensive packages with ongoing support. With the Basic plan, we’ll check if your desired business name is available and file your articles of organization for you. Our Pro and Premium plans also include an operating agreement, EIN, access to customizable legal documents, and hands-on guidance from a business attorney with unlimited 30-minute attorney consultations for your first 30 days.
To help ensure your LLC remains in good standing, we also offer registered agent and compliance services. For innovators looking to protect their brand and intellectual property, we also offer trademark, copyright, and patent filing services.
Start an LLC in Any State
FAQs about Arkansas LLCs
What are the benefits of filing an LLC in Arkansas?
There are several benefits to filing a limited liability company, or LLC, in Arkansas. LLCs provide personal liability protection, allow you to choose your tax classification, and offer flexible business management and profit distributions. Additionally, LLCs typically involve less paperwork and fewer recordkeeping requirements than corporations.
What are the annual filing requirements for Arkansas?
Annual filing requirements for Arkansas LLCs include the franchise tax report due May 1 to the Secretary of State and any relevant business permits and licenses that may need to be renewed annually with the relevant agency.
How long does it take to form an LLC?
In Arkansas, it can take one to three business days for the Secretary of State’s office to approve a certificate of organization. However, there are other factors that may affect how long it takes to form an LLC, like conducting a business name search, applying for a name reservation, hiring a registered agent, crafting an operating agreement, and more.
How do I correct filing errors in AR?
For Arkansas LLCs, you can correct filing errors on your certificate of organization by submitting a certificate of amendment, Form LL-02, to the Secretary of State. This amendment costs $22.50 if you file online or $25 by mail.
How do I dissolve an Arkansas LLC?
To dissolve an Arkansas LLC, first, reference your business’ operating agreement to understand what guidelines you need to follow. Then, submit a statement of dissolution, Form LL-04, to the Arkansas Secretary of State along with your final franchise tax report. The statement of dissolution costs $45 if submitted online or $50 by mail, and the final franchise tax report costs $150.
Do I need a lawyer to start an LLC in Arkansas?
No, Arkansas doesn't require you to hire an attorney to form an LLC. However, many state organizations recommend that you consult an attorney if you have complex ownership structures or significant assets at risk. A lawyer can also help address unique liability concerns and write customized legal agreements. That said, many small businesses successfully form LLCs without attorney fees by using professional formation services.
Can I be my own registered agent in Arkansas?
Yes, you can serve as your own registered agent in Arkansas if you have a physical Arkansas street address and are available during regular business hours. However, business owners that want to protect their private address and free up their time often choose to work with a professional registered agent service for reliability and peace of mind.
How do I change my LLC name in Arkansas?
To change the name of your LLC in Arkansas, you’ll need to check if the name is available. Then you can file a certificate of amendment with the Arkansas Secretary of State. Or, you can register a fictitious name to operate under a name that's different from your LLC's legal name. Both options require you pay a fee of $22.50 online or $25 if submitting by mail.
If you change your business' legal name, you’ll need to update your operating agreement, EIN records, bank accounts, licenses, and all business materials to reflect the new name.
What's the difference between member-managed and manager-managed LLCs?
Member-managed LLCs are run directly by the owners (members), with all members participating in daily decisions. This structure is often beneficial for small, hands-on businesses. Manager-managed LLCs designate specific managers (who may or may not be members) to handle daily operations. In this case, other members are often passive investors. This can be beneficial for owners who aren’t involved and for larger LLCs. Make sure to specify your management structure in your operating agreement.
Can I convert my sole proprietorship to an Arkansas LLC?
Yes. You can convert your sole proprietorship into an LLC in Arkansas through the standard LLC formation process outlined in this article. Then, transfer your sole proprietorship assets, contracts, and licenses to the LLC. Update your EIN (or obtain a new one for the LLC), notify customers and vendors, update bank accounts, and make sure to transfer or reissue all licenses and permits into the LLC's name.
What happens if I miss the May 1 franchise tax deadline?
Arkansas assesses a $25 late penalty plus tax and interest. Additionally, this could lead your LLC to fall out of good standing. This can affect your ability to conduct business, obtain financing, and maintain licenses. Continued non-compliance can even lead to administrative dissolution. File as soon as possible to minimize penalties.
Kathleen Crampton and Rudri Bhatt Patel contributed to this article.
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