How to Start a Business and Form Your LLC in Arkansas
- Arkansas Business Facts and Environment
- Step 1: Decide on a Business Structure
- Step 2: Pick a Business Name
- Step 3: Register the Business
- Step 4: Obtain Your Federal Employer Identification Number
- Step 5: Open Company Bank and Credit Accounts
- Step 6: Set-up An Accounting System
- Step 7: Obtain Licenses and Permits
- Step 8: Hire Employees (if applicable)
- Step 9: Obtain Business Insurance
- Step 10: Systemize and Organize
- Step 11: Branding and Marketing
- Step 12: Annual and Ongoing Requirements
- Important Arkansas Contacts
Arkansas Business Facts and Environment
AR Business Facts
Arkansas is one of the fastest growing states in America. Since 2013, the unemployment rate in Arkansas has declined to 6%. Small businesses dominate the state’s economy. These businesses employ nearly half of the private workforce in Arkansas.
The economy of Arkansas produced US$119 billion of gross domestic product in 2015.
According to CNBC, Arkansas currently ranks as the 35th best state for business, with the 10th-lowest cost of doing business, 8th-lowest cost of living, 41st best workforce, 29th-best economic climate, 41st-best educated workforce, 41st-best infrastructure and the 32nd-friendliest regulatory environment. Arkansas gained twelve spots in the best state for business rankings since 2011.
Major Companies Headquartered in Arkansas
In 2019, Fortune named Walmart, Tyson Foods, Murphy USA, J.B. Hunt Transport Services, Dillard’s and Windstream Holdings to the top 500 companies. In addition, two companies – ArcBest and Murphy Oil – round out the top 1,000 companies.
Startup Environment
Arkansas is an ideal state for startups. Arkansas startup organizations are actively involved in fostering a supportive network, forming an environment where people are encouraged to pursue their ventures.
Step 1: Decide on a Business Structure
There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
- A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
Step 2: Pick a Business Name
Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in Arkansas, but we highly recommend you do the following before searching Arkansas state databases:
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself. Tip: Search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
- Make sure your company name choice is available by searching the Arkansas Business Entity Database and doing a name search on the State of Arkansas website. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
NOTE: Familiarize yourself with the Arkansas naming guidelines. LLC entity names need to contain the words Limited Liability Company or the abbreviation LLC, and certain words are restricted or prohibited.
Restrictions on Arkansas Business Name & Business Purpose
- Arkansas requires corporations to have unique names.
- Arkansas corporate names may be followed by any of the following designations:
- Co.
- Company
- Corp.
- Corporation
- Inc.
- Incorporated
- Limited
- Ltd.
- Restricted designations include:
- Bank
- Banking
- Engineering
- Insurance
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Arkansas.
How to form an LLC in Arkansas
- File the “Articles of Organization” with the Arkansas Secretary of State.
- Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLC’s”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
How to Incorporate in Arkansas
- File the “Articles of Incorporation” with the Arkansas Secretary of State.
- Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
- Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
NOTE: When registering a new company the Secretary of State can take several weeks to file the paperwork. You can expedite the process by hand delivering the documents directly to them or one of their field offices and paying an additional fee.
TIP: Check our order form to see how long Arkansas is currently taking to process regular and expedited orders.
How to File a DBA in Arkansas
- Check the state database of business names.
- Complete the DBA registration form.
- Notarize and submit the form.
- Pay $50 for the filing fee.
Considerations when registering a Arkansas business
- Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you, this is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
Ready to register a business in Arkansas?
- We specialize in registering businesses in Arkansas.
Ready to Start Now? Let Us Do The Work
Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.
- Learn more about our business formation service
- Read our verified reviews and 100% Satisfaction Guarantee
- Contact our friendly support team if you have any questions
Step 4: Obtain Your Federal Employer Identification Number
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
TIP: We will obtain your EIN for you if you we form your company.
Step 5: Open Company Bank and Credit Accounts
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
Top 5 Major Banks in Arkansas
- Arvest Bank
- Bank of the Ozarks
- Simmons Bank
- First Security Bank
- Regions Bank
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Set-up An Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Step 7: Obtain Licenses and Permits
Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.
Step 8: Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Step 9: Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.
Step 10: Systemize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Step 11: Branding and Marketing
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
Step 12: Annual and Ongoing Requirements
DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.
LLC: Arkansas corporations are required to file a PeriodicReport with the Arkansas Secretary of State each year on or before May 1, in addition to general taxation. Information on your business’ taxes can be found here.
Corporation: Business in Arkansas should file a report annually with the Secretary of State of Arkansas on or before May 1. LLCs and Corporations will pay a filing cost of $155.
Important Arkansas Contacts
Business and Commercial Services (for Corporation and LLC filings)
Victory Building
1401 W. Capitol Avenue,
Suite 250, Little Rock, AR 72201
Phone: 888-233-0325
Arkansas Taxation Departments
Arkansas Labor and Employment Departments
Arkansas Startup Resources
1. Small Business Administration (SBA) Arkansas District Offices
2. SCORE Arkansas
- Northwest Arkansas SCORE, Chapter 511 provides FREE and confidential small business counseling and mentoring, seminars, workshops and other services to the region’s small business community.
3. Arkansas Legal Statutes
- Arkansas Business Corporation Act of 1987 – note this is the broad code that includes various other topics including business corporation.
- Small Business Entity Tax Pass Through Act – business and commercial law for Arkansas’ corporations and associations
- Arkansas Code Title 17. Professions, Occupations, and Businesses § 17-80-104. Continuing education – this includes regulations on Arkansas’s professions and businesses
4. Arkansas Chambers of Commerce
- Arkansas State Chamber of Commerce
- Harrison Regional Chamber of Commerce
- Paris Area Chamber of Commerce
- Little Rock Chamber of Commerce
5. Operation JumpStart
- Operation JumpStart is a practical, hands-on program designed to help individuals test the feasibility of their business ideas and launch or expand a small business.
6. Angel.co Arkansas Startups
- A list of all 270+ Arkansas Startups and 4,700+ Arkansas angel investors registered with Angel.co. Good research resource.
7. Arkansas Business News
8. Arkansas Economic Development Commission
- The mission of the Arkansas Economic Development Commission is to create economic opportunity by attracting higher paying jobs, expanding and diversifying our state and local economies, increasing incomes and investment, and generating positive growth throughout Arkansas.
9. Arkansas Small Business and Technology Development Center (ASBTDC)
- Assisting Arkansas businesses has been the mission of the Arkansas Small Business and Technology Development Center (ASBTDC) since its inception in 1979.
10. Arkansas Green Energy Network (AGEN)
- AGEN seeks to create wealth through energy savings resulting from energy efficiency measures as well as distributive solar installations.
