Step 1) Verify & Settle On LLC Name
First on your to-do list is coming up with a name for your Arkansas LLC. The name you choose will make a huge impact on your brand image, so take the time to think this one through. What type of name will appeal to the audience you’re trying to reach?
Keep in mind that your business name also needs to:
- End with “Limited Liability Company”, “Limited Company”, or an abbreviation of one of those
- Not mislead about the company’s purpose
- Be distinguishable from any business name already registered in Arkansas
When it comes being “distinguishable”, keep in mind that this is just as much a matter of branding as it is of legal compliance. If customers aren’t able to set you apart from the competition, you’ll end up blending in with the scenery. Your business is one of a kind, and your name needs to reflect that.
Once you’ve got something that meets all the criteria above, try it out on some folks from your target demographic and see what they have to say. It’s much easier to put some serious effort into choosing the perfect name now than to try to rebrand yourself later!
What To Do:
First, do a business name search through the Secretary of State’s records and see if your desired name is available. If it is, you can reserve it (this isn’t a requirement in Arkansas) or wait to lock it down until you file your Articles of Organization with the state.
If it’s already taken, you’ll either have to make some modifications so that your name is distinguishable, or rethink it altogether.
It’s also a good idea to search GoDaddy for a business domain name at this point. Even if you’re not going to launch a website straight away, buying a domain name ahead of time is a smart move if there’s a decent one available.
Remember, this isn’t optional in Arkansas-- it’s mandatory.
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 GoDaddy 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) Appoint A Registered Agent
Next, you need to appoint a registered agent in Arkansas for your LLC. A registered agent is the person or company responsible for:
- Receiving legal documents and other important mail
- Accepting service of process notices
- Notifying you of important deadlines
- Being available during normal business hours
Your registered agent must be a resident of Arkansas or a business that’s authorized to operate in the state. Either way, they must be able to provide a local street address.
What To Do:
You do have the option to perform registered agent duties yourself, but it’s a bit of a hassle. You’ll have to commit to being at the address you provide from 9-5 every weekday, publicly link your home address to the business (if you work from home), and be very careful to not miss any important notices. (Learn more)
For these reasons and more, we’re major proponents of hiring a professional registered agent for your business — and our favorite provider is IncFile. They include a year of registered agent services totally free when you form your LLC with them!
Step 3) File The Articles Of Organization
Now 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 the 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) Get An EIN
Now that you’ve officially registered an LLC in Arkansas, it’s time to get things all sorted with the federal government, too.
Getting an EIN (Employer Identification Number) is essential to being compliant with federal regulations — for most businesses, anyway. You may be able to opt out if you meet all of these conditions:
- You’re running a single-member LLC
- You’re not going to hire employees
- You plan to be taxed as a sole proprietorship
However, even if all of these are true for your business, you may still need to get an EIN — check out this IRS page for more details.
What To Do:
There are several ways to get an EIN for free, including by fax, phone and mail. All of these approaches are fairly painless, and we outline each one in our EIN guide.
That said, the quickest way to go about it by filling out the IRS online application. Simply provide accurate responses to all the questions and you’ll get your number as soon as you’re through.
Step 5) Draft An Operating Agreement
An operating agreement is a document that outlines the rules and regulations by which an LLC abides, and it’s essential for any multi-member LLC. Among the issues you’ll address in your operating agreement are:
- The responsibilities of each member
- The ownership structure of the business
- Allocation of profits and losses
- When new members may be admitted
- How members may terminate their involvement in the LLC
You won’t be asked to file this document with the state — rather, it’s to be retained by the company to help resolve or prevent disputes in the future. You never know when chaos might strike, and your operating agreement will essentially act as a map for navigating any problem that arises.
What To Do:
Using an online template is a great way to make sure you cover all the necessary territory in your operating agreement. Alternatively, if you’re already working with a reliable online filing provider, you might take a look at their rates for custom operating agreements. Some business formation services like LegalZoom even include this service automatically.
Step 6) Open Bank Account & Manage Finances
Now that you’re walking on solid ground, it’s a good time to open a business bank account. This is a majorly important step for your business, even if you’re running a single-member LLC.
You need to keep your personal and professional finances totally separate, and having a bank account specifically for your business expenses is the best way to achieve that.
Not only will this help you protect your personal assets and simplify your taxes, you’ll also be able to take advantage of waived fees and other business-banking perks. That said, don’t be too hasty and end up choosing the first bank that comes to mind. When shopping for your ideal business bank account, you ought to consider:
- ATM accessibility
- Customer service
- Online banking features
- Small-business incentives
- Fee structures
Every business has its own needs. Maybe you value excellent customer service more than having access to an advanced online platform. There’s no best or worst option here — it’s all a matter of preference.
What To Do:
Local banks like Arvest and Farmers & Merchants are worth checking out and comparing with national options. Our favorite national bank that operates in Arkansas is Bank of America, but you may be able to find a local bank that offers more small-business friendly features.
Whatever bank you choose to work with, make sure you sync your account with an accounting tool. Particularly if you’re not working with an accountant at this point, this is essential to managing your finances in the budding stages of your business.
Step 7) Handle LLC Taxes & Licensing
The 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:
- Federal: The Small Business Association lists all of the licenses and permits various business types need to acquire, and the federal agencies to get in contact with. You should also read their article on small business taxes for an overview, and then consult the IRS website for more details.
- State: For state-specific business licenses, permits and taxes, head over to the Arkansas Department of Finance and Administration website.
- 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!
Need Help Forming an LLC?
If 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 three most popular:
– IncFile ($49 + state fee) = Best Price & Overall Value
– LegalZoom ($79 + state fee) = Best For Brand Recognition