A Comprehensive Guide on How To Start a Business in Arkansas

Before starting a business in Arkansas, you must meet several requirements. This typically includes selecting a business structure, choosing a unique and appropriate business name, appointing a registered agent to receive legal correspondence on your behalf, and registering the business with the secretary of state.

However, your entity's regulatory obligations do not end after business registration. You must meet other requirements, such as securing business licenses and opening tax accounts to remit state taxes. You also need to file annual reports in the state.

Every entity must adhere to these requirements to remain in good standing and uphold its right to operate. Typically, organizations partner with third-party service providers like Harbor Compliance and outsource some of their regulatory obligations.

In this guide, we'll provide a breakdown of how to start a business in Arkansas and cover the ongoing requirements your entity will need to meet.

Starting a Business in Arkansas Checklist

Most entities must file with the secretary of state to establish a new business in Arkansas. However, before you can begin this process, you must complete all of the items on the checklist below:

1. Select the right business structure
2. Choose an appropriate business name
3. Designate a registered agent

Select the Right Business Structure

Selecting the right business structure is a critical step for new entities in Arkansas since it directly impacts the level of liability protection offered to its owners. Considerations like federal and state tax treatment, management structure, future ownership, and access to capital also play a role in selecting a business structure.

Arkansas offers several entity types to choose from, including:

• Sole proprietorship
• Partnership, including General Partnership, Limited Liability Partnership (LLP), Limited Liability Limited Partnership (LLLP), and Limited Partnership (LP)
• Corporations
• Limited Liability Company (LLC)

Given the complexities involved in selecting a business structure, entities are usually advised to consult attorneys or certified public accountants who can provide professional guidance. This ensures the chosen structure aligns with the business owner's goals and needs.

Choose an Appropriate Business Name

The next step before registering a business in Arkansas is selecting an appropriate business name. Here are some of Arkansas' naming guidelines:

• Corporations must include "Corporation," "Incorporated," or "Company" in their designated name.
• Limited Liability Companies must choose names that specify the entity's structure, such as "L.L.C.," "L.C.," "LLC," or "LC."
• Professional LLCs must include Professional Limited Company, Professional Limited Liability Company, P.L.L.C., P.L.C., PLLC, or PLC in their name. Note that business owners are not allowed to include non-member names, except in the case of a deceased member.

Additionally, the name must be distinguishable from other entities registered in Arkansas. A name is not unique if the only difference is one or more of the following:

• A suffix
• A definite or indefinite article
• The word "and" versus the symbol "&"
• Singular, plural, or possessive forms of a word
• A punctuation mark or symbol

To confirm availability, it is recommended that business owners conduct a preliminary name search.

Designate a Registered Agent

In Arkansas, every business entity is required to designate a registered agent. A registered agent acts as the official recipient of legal correspondence on behalf of the business and is responsible for forwarding these documents to the entity.

To meet Arkansas's requirements, the registered agent must have a physical address within the state as P.O. boxes are not allowed. Additionally, before appointing someone as your registered agent, you must obtain their permission to serve in this role.

How To Register a Business in Arkansas

Registering a business in Arkansas usually involves filing with the secretary of state, although not all business types are required to complete this step. For example, sole proprietorships typically do not file with the secretary of state. However, some of their paperwork is handled at the state level.

Even if you are not required to register a business in Arkansas, you can still choose to file a Nonfiling or Nonqualifying Entity Statement. This allows the entity to have its registered agent or service of process information on record.

Entities required to register, such as LLCs and corporations, can file online or by mail. Regardless of your chosen method, you must complete all items on the starting a business in Arkansas checklist, which includes crucial steps, such as selecting an appropriate business name and designating a registered agent.

When filing, you will typically need to provide:

• Business name
• Business address
• Name and address of the registered agent

LLCs and Corporations will also need to list the name and title of at least one officer for franchise tax purposes.

Reserving and Registering Your Business Name in Arkansas

If your business plans to operate in Arkansas under a fictitious name, you must file that name with the Arkansas secretary of state. For domestic corporations, an additional form provided or approved by the secretary of state must also be filed with the county clerk where the corporation's registered office is located.

To gain exclusive rights to a business name for a given period, you can reserve the name by filing a written application. If the secretary of state verifies that the name is distinguishable from any other registered or reserved name, the name can be reserved exclusively for your entity for 120 days.

Note that, under Arkansas corporate code, a corporate name reservation cannot be renewed, and the same name cannot be reserved again by the original applicant or any related parties. However, for LLCs or LPs, a name reservation can be renewed once by filing the appropriate form and fee.

Other Arkansas Essential Business Requirements

Opening a business in Arkansas and completing the necessary filings is only the beginning. To remain in good standing and ensure smooth operations, companies must meet several ongoing requirements, such as:

1. Securing business licenses
2. Filing annual reports
3. Opening tax accounts

Securing Business Licenses

In Arkansas, entities are not required to secure a general business license. Instead, depending on the nature of the services provided, businesses may need to obtain specific permits tailored to their industry.

The process and requirements for securing these permits differ because they are regulated by various authorities. Furthermore, your entity must renew these permits to ensure you can continue operating in the state.

Filing Annual Reports

In Arkansas, most business entities are required to file annual reports with the Secretary of State. These reports help keep the state updated on essential business information, including changes in governance and management.

Annual reports for partnerships are filed using a separate form. However, LLCs and corporations usually file an Annual Franchise Tax Report. This form includes a section for updating any changes in an entity's governance.

Opening Tax Accounts

All employers in Arkansas are required to set up tax accounts and remit the following payroll taxes to the state government:

• State Unemployment Insurance (SUI) Tax—Employers pay this tax to support unemployment benefits for workers.
• Wage Withholding Tax—Employers are responsible for withholding a portion of employees' wages to cover state income tax.

Starting a Home Business in Arkansas? Harbor Compliance Has You Covered

Opening a business in Arkansas involves navigating several essential steps, from choosing an appropriate name and designating a registered agent to filing formation documents with the secretary of state. Beyond registration, Arkansas businesses must also fulfill ongoing obligations like securing permits, filing annual reports, and remitting payroll taxes.

Managing these responsibilities can be complex, which is why entities partner with third-party service providers like Harbor Compliance.

Harbor Compliance supports businesses in meeting their regulatory obligations and remaining in good standing. We offer LLC formation and Incorporation Services, which enable us to file your formation documents with the secretary of state. Additionally, we can act as your registered agent and even manage the process when you need to change your registered agent.

Our Managed Annual License Service helps your entity obtain essential permits, such as those required in industries like architecture and construction. Harbor Compliance also offers a Payroll Tax Registration Service to set up your tax accounts and handles filing annual reports for your entity.

Once you provide your details and specify the services your entity requires, we will handle the filing process so you can focus on running your business.

Overseeing Your Entity's Licenses and Tax Accounts With Harbor Compliance's Software Suite

Harbor Compliance's solutions extend beyond filling support. We also offer a proprietary Software Suite that simplifies essential business tasks, including license and tax management. The table below outlines two key tools within our suite and their unique capabilities:

How To Order Harbor Compliance's Entity Management Solutions

At Harbor Compliance, we offer a range of services tailored to fit the unique needs of your business. If you're interested in our formation services, you can follow the steps below to get started:

1. Visit Harbor Compliance's LLC formation or Incorporation page.
2. Click on "Order Online."
3. Provide the relevant details.
4. Submit your order request.

If you'd like to learn about our Software Suite, you can request a demo session by following these steps:

1. Visit Harbor Compliance's Software Suite page.
2. Select "Schedule a Demo Session."
3. Provide your contact information.
4. Submit your demo request.

Harbor Compliance's Additional Services

Aside from offering formation, licensure, and tax registration services, Harbor Compliance provides additional filing support to meet other regulatory obligations. The table below outlines the additional services we offer:

How To Start a Business in Arkansas FAQs

This section will answer frequently asked questions about incorporating a business in Arkansas. For more details, visit Harbor Compliance's information center.

Partnering With Harbor Compliance To Set Up and Manage Your Business in Arkansas

Doing business in Arkansas requires meeting various regulatory requirements, from selecting the right business structure to registering with the secretary of state. Even after formation, there are ongoing obligations necessary to maintain good standing, such as securing permits and filing annual reports.

Partnering with Harbor Compliance helps streamline these responsibilities so you can focus on running your business rather than navigating regulatory demands. If you're interested in our services, get started by visiting the LLC formation or Incorporation page, depending on your needs. Afterward, you can schedule a demo session to explore our Software Suite and the various modules included in the suite. You can also assess your company's standing with the state's regulatory requirements by using our free Harbor Compliance Score™.

Need more information? Explore our article collection below for on starting a business in other states throughout the U.S.: