How to Form an LLC in Arkansas 5 Simple Steps

Use A Professional Service

A professional service will handle the entire formation process on your behalf, allowing you to focus on the other needs of your new business.

4.7 out of 5 stars IncFile ($49 + state fee) for basic & quick LLC formation.

3.6 out of 5 stars LegalZoom ($79 + state fee) for the most popular LLC service available.

Form An LLC

Step 1) Verify & Settle On LLC Name

Choose a Business NameFirst off, in order to launch a successful Arkansas LLC, you need to give it the right name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.

 

Legally, your business name must:

  • Contain the words limited liability company or limited company, or the abbreviation LLC or L.L.C.
  • Not contain restricted words or phrases (these often include words like bank, attorney, and university) without the proper approval.
  • Be distinguishable from any other entity or trade name registered in Arkansas.

If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider filing a DBA (doing business as) name after you’ve nailed down your branding.

 

What To Do:

Once you’ve decided what you’d like to call your LLC in Arkansas, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Articles of Organization.

 

Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.

Step 2) Appoint A Registered Agent

Choose a Registered AgentWhen you file your Articles of Organization, you will be asked to appoint a Arkansas registered agent.

Your registered agent will be responsible for receiving important legal documents like tax forms and service of process notices on behalf of your LLC. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Nor.

Arkansas does give you the option to act as your own registered agent, but many business owners choose to appoint a professional instead. Here are a few things to think about before you decide to act as your own:

  • You’ll have to maintain normal (9 am - 5 pm) business hours at the address you provide.
  • If you run your business from home, you’ll be required to make your personal address public.
  • You must keep up on important notices, dates, and deadlines.
  • You could be served in front of your family or coworkers.

 

Step 3) File The Articles Of Organization

Register an LLCNow that you’ve decided on an Arkansas registered agent, you should be ready to officially form your LLC!

This involves filing Articles of Organization with the state, which really isn’t too complicated in Arkansas. The single-page document asks for:

  • Your company’s name
  • Your principal place of business address
  • The name and street address of your registered agent
  • A statement describing the LLC’s management

You (or whoever is responsible for forming the LLC) also need to sign at the bottom, promising that all the information you provided is correct.

An LLC Franchise Tax form is attached at the end of the Articles of Organization, where you’ll simply have to provide the name and contact information for your LLC’s “contact person” — likely your registered agent.

 

What To Do:

If you decide to take the reigns on this yourself, you can either file online or on paper. Filing online doesn’t require downloading or printing anything — you’ll even submit your $45.00 payment digitally.

If you choose to apply on paper, you’ll write a check for $50.00 to the Arkansas Secretary of State and drop off your paperwork at their physical address:

Victory Building, Suite 250

1401 West Capitol Avenue

Little Rock, AR 72201

 

Or send it over to their mailing address: 

State Capitol, Suite 256

500 Woodlane Street

Little Rock, AR 72201

Quick Note: Having said all that, we still think it’s a great idea to take advantage of an LLC filing service for this part of the process. Sure, you can handle it independently, but hiring a professional can allow you to get a free registered agent, discounts on other important business services, and some peace of mind knowing everything will be filed accurately and on-time.

 

Step 4) Draft An Operating Agreement

Create an Operating Agreement

Creating an LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.

Your operating agreement should outline the following:

  • each member’s responsibilities
  • how new members will be admitted
  • how existing members may transfer or terminate their membership
  • how profits and dividends are to be distributed

From there, you can add as many provisions as you want, provided they are not in conflict with Arkansas business law. To access a free operating agreement and learn more about how this document works in Arkansas, click here.

 

Step 5) Get An EIN

Get an EIN for Your LLCThe Employer Identification Number (EIN), or Federal Tax Identification Number, is essentially a social security number for your company. State and federal agencies use this number to track your business activity.

 

Your EIN will come in handy when it’s time to:

  • Open a business bank account
  • File Federal and State taxes
  • Hire employees

We think the best way to get an EIN is by using the free online application on the IRS website. We prefer this method because it’s the most efficient, but if you’d prefer to apply via phone, fax or mail, read through our guide to find out how.

Maintain Your LLC's Personal Asset Protection

Best Business Bank Account

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

2. Getting a business credit card:

  • Helps you separate personal and business expenses.
  • Builds your company's credit history, which can be useful to raise capital later on.

Reduce the Liability of Your LLC

  • Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

    • General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
    • Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
    • Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Arkansas, businesses with three or more employees, excluding officers and LLC members, are required by law to have workers' compensation insurance. Get a free quote with ADP.
     

Stay Compliant

Business LicensesThe final step to being totally legally compliant is taking care of any special licenses, permits and taxes required of your business on a federal, state and local level. Here are the best resources we’ve found for Arkansas LLCs:

  • Local: Municipalities often have their own additional requirements, so get in touch with your local Chamber of Commerce to find out if there are any local permits you need to obtain or taxes you need to pay.

Arkansas doesn’t issue general business licenses, so it’s possible that you won’t have to get any licenses whatsoever — but it’s important to check all of the resources above to make sure you’re not missing anything.

 

What To Do:

Depending on the nature of your business, this step could be a walk in the park or a major roadblock. If you’re in need of a little assistance, you can always recruit the help of a business license service.

This kind of service will do all the research on your behalf and provide helpful instructions for filling out your applications — all you’ll have to do is fill in the details. We don’t think this is necessary for every newly registered LLC in Arkansas, but can be a real lifesaver in some circumstances!

Reduce Administrative Burden

There will be many demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go. The two most important business tasks to get help with are:

1) Accounting

Getting your books in order right up front will save you headaches in the future. At the very least, you can have a professional setup your bookkeeping and accounting for you. This will save you money and time in the long run.

There are all in one services that will do your bookkeeping/invoicing/tax filing for you all for one monthly fee. Mazuma ($95/month) is a reliable all in one tax service.

2) Employee Payroll

If you have employees, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.  

Gusto is a reliable and good payroll service for small businesses.

Need Help Forming an LLC?

How To Form An LLC OnlineIf you’ve got too much on your agenda to worry about all the paperwork and state-requirements, there are a handful of LLC formation services that can take care of everything for you.

Here are the two most popular:

IncFile ($49 + state fee) = Best Price & Overall Value

LegalZoom ($79 + state fee) = Best For Brand Recognition

Note that this guide for forming a Arkansas LLC isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an LLC in Arkansas, consult with a business attorney.