Did you know that 99.3% of all companies in Arkansas are small businesses? If you’re considering doing business in Arkansas, now might be the right time to create a limited liability company (LLC).
An LLC is a safety net for your personal finances. It combines elements of corporations and sole proprietorships to create a simple business structure. Economic safety and flexibility are some of the advantages!
If you’re wondering how to get an LLC in Arkansas and whether you need an operating agreement, read our comprehensive guide!
Is an LLC Operating Agreement Required in Arkansas?
You don’t legally need an operating agreement when registering your LLC in Arkansas. But having one can make a major difference when it comes to legal proceedings. The operating agreement is an essential document that details:
- Ownership arrangements
- Profit percentage distribution
- Rules and regulations
- Member and employee obligations
- Asset division
Legal proceedings will default to the Arkansas state laws without an operating agreement. If you choose to skip this step, it can impact how your business handles lawsuits or a dissolution.
Arkansas Operating Agreement Laws
You can find the general operating agreement laws in Section 4-32-405 of Arkansas’s Business and Commercial Law Code. But there are a few unique things to note.
Types of LLCs
There are three types of LLCs to choose from based on your needs. You can register any of the following in the state of Arkansas:
- Single-Member Limited Liability Company (SMLLC)
- Multi-Member Limited Liability Company (MMLLC)
- Professional Limited Liability Company (PLLC)
You will follow the same steps to form all of these company types. A foreign LLC is also possible, but it will include extra steps and documents.
A PLLC is designated for those who provide a licensed service. An example may be an accounting company or a doctor’s clinic. You will have to state this on your application.
To legally name your company, you will have to include any of these phrases or abbreviations:
- Limited Liability Company
- Limited Company
For PLLCs, you must include one of the following:
- Professional Limited Liability Company
- Professional Limited Company
You can also abbreviate Limited as Ltd. and Company as Co. The company name can contain any living or deceased member’s name. It can’t contain any non-member names.
The LLC will need a registered agent to accept official documents. You can nominate one of the following:
- A full-time resident of Arkansas
- A registered business in Arkansas
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.
All registered LLCs in Arkansas must file an annual Franchise Tax Report to the Secretary of State. The minimum tax fee is $150, paid by May 1 of each year. It can be done online through the Secretary of State website or by mail.
How Much Does it Cost to Form an LLC in Arkansas?
The initial fees to set up an LLC in Arkansas are very low. The domestic filing fee is $45 online or $50 by mail. For foreign LLCs, the online fee is $270, and the mail-in cost is $300.
The only other expense is the annual Franchise Tax Fee and Report at $150. You can also use the optional name reservation service for $25.
How to Get an LLC in Arkansas
Creating an LLC in Arkansas is a very simple process. There are really only three required steps! But we suggest you include the additional steps to make the process easier and smoother.
Step 1 – Select Your Name and Reserve (Optional)
Some states require a name registration before submitting your articles of incorporation. This process usually has an extra cost and wait time. Luckily, Arkansas is not one of those states!
Before selecting a company name, make sure it follows the above-mentioned regulations. You can check the Secretary of State’s database to ensure your chosen name is available. The law requires your company to have a unique name that isn’t too similar to a name used by another company.
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 option, apply online. You’ll even save a few dollars with the online method!
Step 2 – Assign a Registered Agent
The registered agent’s job is to accept legal documents on your behalf and deliver them to the LLC. 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 Incorporation
Filing your articles of incorporation is a big step! Once you receive approval, you’ll become the legal owner of an LLC in Arkansas. You can do this in two ways: by mail or online.
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 Arkansas Secretary of State, 1401 W. Capitol Ave. Suite 250, Little Rock, AR 72201
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. Once you fill out the form and pay the $45 fee, you only have to wait for approval!
Step 4 – Create Your Operating Agreement
Because the operating agreement isn’t required as part of your application, you can do it yourself! Use our Arkansas operating agreement document builder to make life easier. Then all you have to do is circulate this internal document to other members.
Step 5 – Apply for an Employer Identification Number (EIN)
After your articles of incorporation get approved, you might need to apply for an EIN. In Arkansas, LLCs with more than one member need this number, even if they have no 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. If you choose to be taxed this way, rather than as a sole proprietor, you should apply for an EIN. It’s an easy and free process completed through the IRS website.
Arkansas LLC Operating Agreement Template
Now that you’ve learned how to get an LLC in Arkansas, get started by creating an operating agreement. Feel free to use our Arkansas Operating Agreement template below!
LLC Operating Agreeement