Step 1) Decide On A Name For Your Corporation
Choosing a name is the first real branding decision you’ll make when incorporating in Arkansas. Your business name will play a significant role in your ability to attract the right clientele, so it needs to be memorable and relevant. For legal reasons, it also must:
- Contain the word corporation, incorporated, company, limited, or an abbreviation of one of those terms
- Not be misleading about the company’s purpose
- Not be confusingly similar to any business name currently registered in Arkansas
Essentially, you want a name that captures your business’ mission and sets you apart from your competition. Try to stand out rather than blend in.
What To Do:
Once you’ve decided on the perfect name for your Arkansas corporation, do a business name search to find out whether or not it’s available. If it is, you have the option to reserve your name for $25.00 — otherwise, you can wait to claim it until you file your Articles of Incorporation.
This is also a good time to search GoDaddy for a decent domain name. Remember, this is all about drawing the right customers your way, and having a URL that’s easy to remember is part of that.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use WEEBLY to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Designate A Registered Agent
Before you can officially form your corporation in Arkansas, you need to appoint a registered agent. A registered agent is a person or company responsible for accepting service of process notices, tax forms and other legal documents on behalf of your corporation.
If you choose an individual to perform this job, they have to be a permanent resident of Arkansas with a physical address in the state. If you designate a company, they must be authorized to represent businesses in Arkansas.
You may appoint yourself or one of your officers to act as your company’s registered agent, but this will require:
- Committing to normal business hours at your personal or professional address
- Publically linking your home address to the corporation (if you work from home)
- Risking being served in front of family, friends or clients
In our opinion, it’s best to assign this job to a professional, but it’s up to you to decide what’ll work best for your business.
What To Do:
If you’re considering acting as your own Arkansas registered agent, read through our guide to get a better sense of what it will entail. Alternatively, our top choice for professional registered agent services is IncFile. They include a full year for free when you incorporate your business with them, and every subsequent year costs only $99.
Step 3) File Articles Of Incorporation
Now that you’ve decided on a registered agent for your corporation, it’s time to file your Articles of Incorporation with the state of Arkansas. While this may seem like just another logistical step, it’s actually quite exciting — after this, you’ll be a registered Arkansas corporation.
The Articles of Incorporation will ask for the following information:
- Your corporation name
- The number of shares you’re authorized to issue, and the par value of each
- Your registered agent’s name and street address
- Name and address of incorporator(s)
- The primary purpose of your corporation
A Corporate Franchise Tax Form is also attached at the end of the Articles of Incorporation. You’ll simply have to provide the name and contact information of your corporation’s contact person (likely your registered agent). And finally, everything must be signed by an Authorized Officer from your corporation.
What To Do:
You’ll need to decide whether you want to file online or on paper. If you choose to file online, you won’t download or print anything out — everything will be taken care of digitally, including your $45.00 payment.
If you choose to print the document and physically fill it out, you can either bring it to the Secretary of State’s physical address:
Victory Building, Suite 250
1401 West Capitol Avenue
Little Rock, AR 72201
Or send it to their mailing address:
State Capitol, Suite 256
500 Woodlane Street
Little Rock, AR 72201
Make sure to include a check for $50.00 made payable to the Arkansas Secretary of State (filing on paper costs an extra $5.00).
Step 4) Obtain EIN
Now that you’ve officially formed your corporation with the state, it’s time to obtain an EIN so the federal government can keep their eye on you, too.
An EIN, or Employer Identification Number, is like a social security number for your business.
Every Arkansas corporation is required to get an EIN, and it’s best to get it out of the way sooner rather than later. You’ll need it to open a business bank account, as well as to complete most legal documents from here on out — including Form 2553, which you’ll file with the IRS if you’re seeking S-Corp status.
What To Do:
The most efficient way to get your EIN is by using the IRS online application. This method is totally free, and you’ll get your number as soon as you’re done filling it out. However, if this approach doesn’t suit you, there are other ways to get an EIN for free. We outline each of them in our EIN guide.
Step 5) Meet With Directors & Discuss Bylaws
Holding your organizational meeting is the next major milestone for your business. This is when you’ll flesh out the management and ownership structure of the corporation with your directors (Arkansas requires corporations to appoint three or more directors).
This will involve:
- Appointing officers
- Discussing and adopting corporate bylaws
- Issuing shares
- Writing a banking resolution
- Recording meeting minutes
- Creating rules for adding/amending bylaws
Particular attention should be paid to your corporate bylaws during this meeting. Your bylaws will serve as the corporation’s governing document for as long as it’s in existence, so it’s critical that this document is well thought out and thorough.
What To Do:
To make sure you go into this meeting totally prepared, we recommend taking advantage of meeting minute and corporate bylaw templates. This is a great way to familiarize yourself with the topics you’ll need to cover throughout the meeting, and the content you’ll include in each of these documents.
Step 6) Start A Corporate Records Book
Now that you’ve gathered quite a few legal documents, it’s about time to put them in their proper place: your corporate records book.
This may be a modest binder or a custom-engraved leather book, as long as it provides enough structure for you to organize your important documents. That includes your:
- Corporate bylaws
- Articles of Incorporation
- Tax forms
- Meeting minutes
- Licenses & permits (see step 7)
Essentially, all the documents you simply can’t risk losing should find a home in your corporate records book.
What To Do:
You might consider investing in a corporate kit at this time. Corporate kits include extra pieces like a custom seal, stock certificates and beautifully printed bylaws, which can be a great way to assert your company’s legitimacy.
However, this isn’t a legal requirement, and a simple leather binder may be all your company really needs. In this case, you should be able find something sufficient at a local office supply store!
Step 7) Cover Licensing & Tax Obligations
In order to be 100% compliant with the federal, state and local government, your business may need to meet a number of special requirements. Here are the best resources to check out for each level of government:
- Federal: The U.S. Small Business Association website has a handy article on small business taxes, as well as a page detailing all the licenses and permits specific types of businesses are obligated to obtain. For more detailed information on business taxes, however, you’ll want to jump over to the IRS website.
- State: The Arkansas’ Department of Finance and Administration website is where you can find all the state-specific information on business licenses, permits and taxes.
- Local: Depending on the area you’re going to be operating in, you may be subject to additional requirements. Contact your local chamber of commerce to find out if your municipality mandates any other special taxes or licenses.
You don’t need to worry about getting an Arkansas business license, as the state doesn’t issue them. However, you may be subject to various requirements based on the nature of your business and the locality you’re setting up shop in, so do yourself a favor now and consult all the resources above!
What To Do:
If you don’t have time to do this research on your own, you can always recruit a business license service to do the hard work for you. They’ll do all the digging on your behalf and send you the necessary forms and applications in a tidy bundle. All you’ll need to do is sign the forms and fill in any blanks!
Step 8) Open A Business Bank Account & Manage Finances
The final piece of the puzzle is getting your finances sorted.It’s essential to start a business bank account as soon as possible in order to keep your personal and professional expenses totally separate. You should have already discussed your options during the organizational meeting, and settled on a bank based on:
It’s essential to start a business bank account as soon as possible in order to keep your personal and professional expenses totally separate. You should have already discussed your options during the organizational meeting, and settled on a bank based on:
- Nationwide ATM access
- Business incentives
- Online banking features
- Customer service
- Minimum balances/fee structures
Every bank has its own perks in each of these regards, and you and your directors need to decide which features matter most to you. Perhaps you just want a rock-solid online platform and customer service isn’t very important to you — or, maybe it’s the exact opposite.
What To Do:
Do some research on local and national banks. Local options like Farmers & Merchants Bank may be better on the customer service front, while larger-scale banks may be more technologically advanced. Again, this is all about personal preference. Our recommended national bank that operates in Arkansas is Bank of America.
Once you’ve landed on the ideal business bank account, get it synced with some accounting software to start properly keeping track of your finances. This should be a continuous practice for any business, but it’s especially important in the early stages when you’re not working with a professional accountant yet. Check out our top recommendations.
Need Help Incorporating?
Starting an Arkansas corporation is no walk in the park, and you’ve already got enough on your plate without worrying about every single piece of paperwork we’ve discussed.
There are several ways to lighten your workload in the budding stages of your company, and we’re huge proponents of taking advantage of these opportunities. Here are the three services that are extremely popular:
– IncFile ($49 + state fees) = Best Price & Overall Value
– LegalZoom ($149 + state fees) = Most Popular Service
– Harbor Compliance ($499 + state fees) = Better Customer Service