An Arkansas LLC operating agreement is an essential document that details ownership arrangements, profit percentage distribution, member and employee obligations, asset division, and other rules and regulations.
Legal proceedings will default to the Arkansas state laws without an operating agreement. If you skip this step, it can impact how your business handles lawsuits or dissolution.
Is an LLC Operating Agreement Required in Arkansas?
You don’t legally need an operating agreement when registering your LLC in Arkansas. However, having one can make a major difference in legal proceedings.
Types of LLC Operating Agreements
Arkansas offers flexibility for both solo entrepreneurs and business partners. The type of operating agreement you choose should reflect how your LLC is owned and managed.
Single-Member LLC Operating Agreement
Provides clarity on how the limited liability company with a sole owner will be run, in accordance with state laws and regulations.
Multi-Member LLC Operating Agreement
Aims to establish the terms, policies, and procedures within businesses with multiple owners.
Laws
The general LLC laws are in Title 4, Subtitle 3, Chapter 38 of Arkansas’s Business and Commercial Law Code and include the following operating agreement statutes:
- AR Code § 4-38-105: Operating agreement – Scope, function, and limitations.
- AR Code § 4-38-106: Operating agreement – Effect on limited liability company and person becoming a member – Preformation agreements.
- AR Code § 4-38-107: Operating agreement – Effect on third parties and relationship to records effective on behalf of limited liability company.
Costs and Fees
The initial fees to set up an LLC in Arkansas are very low:
- Certificate of organization filing fee – $50 by mail and $45 for online filing. For foreign LLCs, the mail-in fee is $300, and the online price is $270.
- Name reservation fee – $25 ($22.50 for online reservation).
The only other expense is the annual Franchise Tax Fee and Report at $150, paid by May 1 annually. It can be done online through the Secretary of State website or by mail.
How to Form an LLC in Arkansas
Step 1 – Select Your Name and Reserve (Optional)
Before selecting a company name, ensure it follows the abovementioned regulations. You can check the Secretary of State’s database to ensure your chosen name is available.
If you have an excellent name and want to keep it safe, make the optional name reservation. It will stay on hold for 120 days while you prepare your documents.
To apply by mail, download the Application for Reservation of Entity Name. Then, send the completed form and $25 fee to the Secretary of State’s Business and Commercial Services Division, 1401 W. Capitol Ave., Suite 250, Little Rock, AR 72201. Or, for a faster and cheaper option, apply online.
Step 2 – Assign a Registered Agent
You can choose a specialized company or a lawyer to handle this task, but you can also opt for a friend, family member, or yourself. The agent must have a legal Arkansas address and be over 18 years old.
The registered agent’s job is to accept legal documents on your behalf and deliver them to the limited liability company. These can be court summons or lawsuits. They can even sometimes be tax-related documents. Choosing a trustworthy person or company is essential in this process.
Step 3 – File Articles of Organization
Once you receive approval, you’ll become the legal owner of the limited liability company in Arkansas. You can do this in two ways: by mail or online.
By Mail
If you choose to submit your application by mail, you might have a longer wait time. You’ll also have to pay a higher filing fee than an online submission.
- Download the Certificate of Organization for Limited Liability Company.
- Fill it out online with the required information.
- Include the $50 fee by check, money order, or credit card information.
- Send everything to the Arkansas Secretary of State’s address.
Online
Submitting your documents online is easier, faster, and cheaper. Go to the Secretary of State website and choose Certificate of Organization for Domestic LLC – LL-01. You only have to wait for approval once you fill out the form and pay the $45 fee.
Step 4 – Create Your Operating Agreement
You can do it yourself because the operating agreement isn’t required as part of your application. Use our operating agreement document builder to make life easier. Then, you have to circulate this internal document to other members.
Step 5 – Apply for an Employer Identification Number (EIN)
After your articles of organization get approved, you might need to apply for an EIN. In Arkansas, LLCs with more than one member need this number, even without employees. But if you plan on having employees in the future, you’ll need an EIN either way.
The EIN can also identify you as a corporation for taxation purposes with the IRS. You should apply for an EIN if you are taxed this way rather than as a sole proprietor. It’s an easy and free process completed through the IRS website.
Sample
View a sample Arkansas LLC operating agreement below and then use our document editor to customize it before downloading in PDF or Word format.
