Arkansas LLC Guide | A Comprehensive Write-up For Beginners
When talking about LLC, what really comes to your mind? You might have heard about LLC but you don’t really understand the concept of how it’s been operated.
A limited liability company (LLC) is a business entity that offers certain legal protections and rights to its owners. An LLC is either a corporation or a sole proprietorship/partnership.
Do you know that forming an LLC is the simplest way of structuring your business to protect your personal assets in case your business is sued?
I believe the content is becoming interesting because you have found what you want?
An LLC can be owned by one or more people, who are known as LLC “members”. An LLC with one owner is known as a single-member LLC, and an LLC with more than one owner is known as a multi-member LLC.
Arkansas LLC Information
Forming LLCs in Arkansas is affordable and easy. Unlike other states, the State of Arkansas has some unique LLC requirements.
Interested parties must register with the Arkansas Secretary of State by filing the necessary forms, paying the necessary fees, and meeting all naming and formation requirements.
The specifications required of an Arkansas LLC are:
1. Name Your Arkansas LLC
Choosing a company name is the first and most important step in setting up an LLC in Arkansas. Be sure to choose a name that complies with Arkansas LLC naming requirements and is easily searchable by potential clients.
1. Follow The Naming Guidelines:
- Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
- Your name must be distinguishable from any other Arkansas limited liability company, corporation, or limited partnership.
2. Arkansas LLC Name Availability
Make sure the name you want isn’t already taken by doing an Arkansas LLC Search on the Secretary of State’s website.
2. Choose A Registered Agent In Arkansas
You are required to nominate an Arkansas registered agent for your LLC.
What Is A Registered Agent?
A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, a notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business’s point of contact with the state.
Who Can Be A Registered Agent?
A registered agent must be a resident of Arkansas or a corporation, such as a registered agent service, authorized to transact business in Arkansas. You may elect an individual within the company including yourself.
FAQ: Nominating An Arkansas Registered Agent
Can I Be My Own Registered Agent In Arkansas?
Yes. You or anyone else in your company can serve as the registered agent for your Arkansas LLC.
Is A Registered Agent Service Worth It?
Using a professional registered agent service is an affordable way to manage government filings for your Arkansas LLC. For most businesses, the advantages of using a professional service significantly outweigh the annual costs.
3. File The Arkansas LLC Articles Of Organization
To register your Arkansas LLC, you will need to file the Articles of Organization with the Secretary of State. You can apply online, by mail, or in-person. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.
The Articles of Organization for an LLC (limited liability company) in Arkansas is a legal document to officially form your business. You’ll be expected to provide the name of your LLC, choose a registered agent, list the services your LLC will offer, and pay the state filing fee. After you file the Articles of Organization, we recommend you obtain an Employer Identification Number (EIN) if you plan to hire employees and open a business bank account.
FAQ: Filing Arkansas LLC Documents
What Is The Processing Time To Form My Arkansas LLC?
Within 48 hours online, or a week by mail.
What Is The Difference Between A Domestic LLC And Foreign LLC?
An LLC is referred to as a “domestic LLC” when it conducts business in the state where it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state.
4. Create an Arkansas LLC Operating Agreement
An operating agreement is not required for an Arkansas LLC, but it’s a good practice to have one.
What Is An Operating Agreement?
An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.
Why Are Operating Agreements Important?
A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.
FAQ: Creating An Arkansas LLC Operating Agreement
Do I Need To File My Operating Agreement With The State Of Arkansas?
No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.
5. Get An Arkansas LLC EIN
What Is An EIN?
EIN stands for Employer Identification Number. EINs is a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a social security number for a business.
An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).
Why Do I Need An EIN?
An EIN is required to:
- Open a business bank account
- File and manage Federal and State Taxes
- Hire employees
Where Do I Get An EIN?
You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.
FOR INTERNATIONAL EIN APPLICANTS: You do not need an SSN to get an EIN.
FAQ: Getting An Arkansas LLC EIN
How Do I Get An EIN If I Don’t Have A Social Security Number?
A social security number is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at (267) 941-1099 to complete your application.
What Tax Structure Should I Choose For My Arkansas LLC?
When you get an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing the S corporation (S corp) status.
6. Cost To Form An LLC In Arkansas
To start an LLC in Arkansas, you will need to file your Articles of Organization with the Arkansas Secretary of State, which costs $50 online. You can apply online, in-person, or by mail or fax. The Articles of Organization is the legal document that officially creates your Arkansas Limited Liability Company.