How to start an LLC in Arkansas in 2024

A limited liability company, or LLC is a type of business entity that can protect your personal assets and offers certain tax benefits. You can form an LLC in Arkansas on your own or hire a company to help you navigate the process. Depending on the nature of your business, starting an LLC typically includes the following steps:

• Choosing your business name.
• Choosing a registered agent.
• Filing your certificate of organization.
• Creating an operating agreement.
• Obtaining an employer identification number(EIN).
• Filing annual reports.

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6 steps to start an LLC in Arkansas

1. Choose a business name

Having a unique business name is not only helpful in distinguishing your business from competitors but is a requirement in Arkansas. You need to choose an LLC name that no other Arkansas business is using. In addition, the Arkansas secretary of state may even deny a request for a business name that has been previously registered in Arkansas, is trademarked or is a derivative of a previously-registered or trademarked name. 

The Arkansas secretary of state offers name availability guidelines to help you ensure your name is distinguishable from others. Its guidelines state that you cannot distinguish your LLC name by: 

• Adding or replacing corporate name endings, such as LLC, LP, LLLP, corp, Inc. or Co. 
• Using a variant of Arkansas, such as AR, Ark, Arkan, Arkansaw, A-State, natural state, diamond state or a similar variant. 
• Changing spaces, punctuation or characters. 
• Changing an uppercase word to a lowercase one and vice versa. 
• Adding articles of speech (such as “a” or “the”).
• Adding prepositions (such as “of,” “by” or “with”). 
• Changing a word to its contracted version or vice versa (i.e., “is not” to “isn’t”). 
• Changing a word to its abbreviated version (i.e., “doctor” to “dr.”). 
• Changing a word’s spelling (i.e., “kids” to “kidz”). 
• Changing a word to its phonetically similar equivalent (i.e., “Annie’s” to “Anny’s”). 
• Adding a number. 
• Adding or removing a letter in a word. 
• Adding or removing possessive elements (i.e., “Annie’s shop” to “Annie shop”). 
• Pluralizing words. 
• Using a root word variant (i.e., “expert” to “expertise”). 
• Adding a directional word (i.e., “north” or “south”). 

As you choose your name, remember that the following words require approval from a relevant agency, board or commission before using them: 

• “Bank,” “trust” or a combination of both. 
• Words related to medicine. 
• “Engineer,” “engineering” or a similar word. 
• “Insurance.” 
• “Razorbacks” or “Arkansas Razorbacks.” 

Once you’ve brainstormed an appropriate name that adheres to Arkansas’s naming guidelines, search for the name using the Arkansas secretary of state search tool to determine its availability. It is also advisable to complete a search with the U.S. patent and trademark office’s trademark database to ensure the name is not federally protected from infringement. 

If your chosen name is not available, you can differentiate it and search again. Some ways you can distinguish your name include:

• Adding a location word that differs from the location of the business that’s already using the name. For example, if a business named “Joe’s Plumbing” is located in Little Rock, Arkansas, you can distinguish the name from other Joe’s Plumbing companies by adding “of Little Rock” to the name, making it “Joe’s Plumbing of Little Rock.” 
• Changing the service offered as indicated in the name. For example, “Annie’s Sewing Shop” can be changed to “Annie’s Quilting Shop.” 
• Adding keywords that drastically change the name. 

Once you choose an available LLC name, you can reserve the name for 120 days. To do so, file an “application for reservation of entity name” (or RN-06) form by mail accompanied by a $25 fee. Alternatively, you can reserve your name online through form LLC-05 for a $22.50 fee. 

2. Select your registered agent

A registered agent is a representative designated to receive official paperwork for your LLC, such as legal and government documents. You can be your own registered agent or appoint an employee to fulfill the role. The person you choose must meet the following criteria: 

• Be at least 18 years of age. 
• Be available at a physical business address (not a P.O. box) during all regular business hours throughout the year. This means no leaving for sick leave, client meetings or business travel.
• Be willing to receive key documents and alert authorized personnel that can address them in a timely manner. 

For many businesses, having one person who can be present in the business office (or at the address listed as the registered agent address) during all regular business hours throughout the year is not doable. Here are other obstacles that many businesses face to hinder appointing an internal individual as their registered agent:

• Privacy concerns: Some business owners work from home and do not want their home address to be listed in registered agent public databases. 
• Reputation concerns: Some businesses don’t want to appoint an internal person as their registered agent to prevent potentially embarrassing paperwork from being delivered in front of customers or other employees, such as notices the company is being sued. 
• Lack of a physical address: Some companies do not have a physical address to list as the registered agent address (as is common with house cleaning or food truck businesses, for example).

If these hindrances apply to your LLC, for $0 to $300 per year, you can hire a registered agent service provider that is dedicated to receiving documents during all regular business hours on your behalf. The registered agent service will list its address in public registered agent databases and discretely alert client businesses when documents are delivered and need to be addressed. Many offer complementary features, such as calendars that alert client businesses of impending document-related deadlines, mail forwarding services and legal and tax consultations. 

Read our best registered agent services guide to find the best service for your small business. 

3. File a certificate of organization

Filing a certificate of organization legally forms your Arkansas LLC. The easiest way to file your certificate of organization is through the Arkansas secretary of state corporations online filing system.

Once you land on the corporation’s online filing system page, under “domestic LLC” click “certificate of organization for domestic LLC – LL-01,” then “start form.” You will be directed to fill out a form and asked for the following information: 

• Your company’s name or your full name, plus your address, phone number and email address.
• The name of your registered agent (if you’ve hired a business) or the name, address, phone number and email address of the individual appointed as your registered agent. 
• One business organizer’s name, title and address.
• An LLC member’s or manager’s name, title and address. 
• The submitter’s contact information in the form of either a business name or an individual’s name, address, phone number and email. 
• The business name or individual name, address, phone number and email address of the person or entity where annual report information should be sent. This should be an address where someone who can complete the form will be available. 
• The signature of the person listed in the annual report contact information section. 
• The date you wish your LLC to form. If you wish your LLC to start immediately, leave this field blank. 
• The listed organizer’s signature. 
• Credit or debit card information to pay the $45 filing fee. 

According to current secretary of state estimates, the current filing processing time ranges from three to seven business days. 

New LLC reporting requirement alert 

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented a new reporting requirement for all non-exempt LLCs starting on January 1, 2024. 

The requirement is called the Beneficial Ownership Information (BOI) report and it is estimated to only take about 20 minutes to complete. 

Here’s what you need to know:

• LLCs formed before January 1, 2024 have until January 1, 2025 to file.
• LLCs formed between January 1, 2024 and January 1, 2025 have 90 days to file from the confirmed date of the businesses’ registration.
• New LLCs formed after January 1, 2025 will have 30 days to file from the confirmed date of formation.

For all details, FAQs and to file, visit FinCEN’s BOI website. 

4. Draft an operating agreement

Although technically not required, we recommend creating an operating agreement because it sets the foundation of how your business will operate. An operating agreement lays out various aspects of the business, such as the following: 

• Rules around financial dealings, such as accounting methods.
• The voting rights and duties of all members.
• Rules regarding the distribution of profits and losses.
• Each member’s ownership percentage.
• How changes to the LLC’s membership structure will be enacted. 
• How the LLC can be dissolved. 

The benefits of establishing this legally binding document include: 

• Operational control: If you do not create and have all members sign an operating agreement outlining your LLC’s operating policies, your LLC will have to default to the state’s rules regarding its operation. These rules may contradict your own wishes or your operational needs. For example, you may not wish to require a unanimous vote to remove a member; without an operating agreement, you will have to adhere to this state rule. 
• LLC liability protection: An operating agreement that clearly outlines each member’s ownership percentage and how profits and losses are distributed can help protect members in the event of a liability-based lawsuit. 
• Conflict prevention and resolution: By clearly outlining how your LLC will operate and ensuring all members sign the agreement, you can prevent disputes among members throughout the life of your LLC. If a dispute arises, an operating agreement can be used as guidance to resolve the dispute. 

To draft your operating agreement, begin by accessing a free LLC operating agreement template. LLC formation companies such as Rocket Lawyer and Northwest Registered Agent offer such templates for free. With a free account signup, Rocket Lawyer even asks you questions, then auto-fills the template for you. 

As a legally-binding document, we strongly advise you to consult a business lawyer to ensure it meets your LLC’s unique needs before all members sign it. Some LLC formation companies, including Rocket Lawyer offer legal consultation services you can use for this purpose. 

Once signed, securely file the document with your important business documents, such as your certificate of organization.

5. Obtain an employer identification number (EIN)

An employer identification number (EIN) identifies your LLC before the federal government, much like a Social Security number does for a person. It is also important for completing business financial tasks, such as opening a bank account, applying for a loan, hiring employees and filing federal and state taxes. 

Obtaining an EIN is a quick and free process. Using the IRS’s EIN application page, you can apply online between 7 a.m. and 10 p.m. Eastern Time. Applying takes about 15 minutes and you must do so in one sitting. You will be required to provide the name and Social Security or tax ID number of a responsible party within the LLC (who manages the company’s financial assets and matters).

Once you submit the application, the system will instantly provide a downloadable EIN confirmation notice with the number included. Download, save and print the document to be kept with your other important LLC paperwork. 

6. File annual reports

Once the secretary of state approves your certificate of organization, you’ve completed the initial legal requirements of establishing your LLC. However, you must fulfill ongoing requirements to remain in good standing with the state. Namely, you must file an annual LLC franchise tax report with the Arkansas secretary of state each year.

To file your report, you must provide the following information: 

• Your LLC’s legal name. 
• Your name, address and contact information or that of the person who should receive important tax reporting notifications on your LLC’s behalf. 
• The name and street address of your registered agent. 
• Your LLC’s operating address. 
• The sector or industry of your LLC.
• The names of your current members, managers and tax preparer. 
• Your LLC’s EIN. 

You can submit the form online or by mail. It is due on the first of May each year and costs $150 to file. To submit it online, visit the Arkansas secretary of state website. Click “business services” from the header menu, then “for current businesses” from the drop-down menu. On the next screen, click the link to file your franchise taxes online. Follow the prompts to complete the form. Submit your payment via credit card (for a $5 processing fee) or electronic check (for a $3 processing fee. 

Featured LLC service offers

ZenBusiness

Learn More

Via ZenBusiness’ website

Free version available

Yes

Lowest published package price

$199

Live chat

Yes: Human

LegalZoom

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Via LegalZoom’s website

Free version available

Yes

Lowest published package price

$249

Live chat

Yes

Northwest Registered Agent

Learn More

Via Northwest’s website

Free version available

No

Lowest published package price

$39

Live chat

Yes

Find the best LLC services for Arkansas: Best LLC creation services of 2024

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