LLC Cost in Arkansas | How Much Does It Cost to Start an LLC

LLC Costs in Arkansas

Forming a Limited Liability Company (LLC) in Arkansas is a popular choice for entrepreneurs and small business owners who want to protect their personal assets and enjoy flexibility in their business operations. LLC formation costs vary from state to state, and it is essential to understand the costs involved in forming and maintaining an LLC in Arkansas.

If you would like to know more about the Arkansas LLC Cost, read the whole article until the end. Webinarcare Editorial Team will help you gain knowledge on how much an LLC Costs in Arkansas. You must be guided by all the factors gathered in this article.

How to Start an LLC?

Before we dive into the LLC Cost in Arkansas, you should know the step-by-step process of starting an LLC, including selecting a unique business name, appointing a Registered Agent, filing the necessary documents, and fulfilling any additional requirements, such as obtaining licenses or permits that are specific to your industry or location.

Here are the steps in starting an LLC in Arkansas:

  • Step 1: Choose a Unique Business Name
    The first step in starting an LLC in Arkansas is to select a unique business name for your company. The name should be distinguishable from any other registered businesses in the state. You can check the availability of your desired business name by searching the state’s business name database. Once you’ve found an available name, you may need to include “LLC” or “Limited Liability Company” at the end of the name to comply with state requirements.
  • Step 2: Appoint a Registered Agent
    A Registered Agent is someone who will receive official legal and tax documents on behalf of your LLC. The Registered Agent must have a physical address in Arkansas and be available during normal business hours. You have the option to appoint yourself as the registered agent or hire a professional registered agent service.
  • Step 3: File the Certificate of Organization
    To officially form your LLC, you need to file the Certificate of Organization with the Arkansas Secretary of State or the appropriate state agency. The Certificate of Organization typically requires basic information about your LLC, such as its name, address, Registered Agent details, and the name and address of the LLC’s members or managers.
  • Step 4: Create an Operating Agreement
    Once your LLC is formed, it’s highly recommended to create an operating agreement in Arkansas. Although not required by Arkansas law, an operating agreement is a crucial internal document that outlines the ownership, management, and operating procedures of your LLC. It helps establish clear guidelines and expectations among members, and it can be especially useful in the event of disputes or disagreements in the future. The operating agreement can be customized to fit the specific needs and goals of your LLC.
  • Step 5: Obtain Required Licenses and Permits
    Depending on the nature of your business, you may need to obtain specific licenses or permits at the federal, state, or local level. Research the licensing requirements in Arkansas and apply for business licenses in Arkansas related to your industry or activities. Common examples include professional licenses, health or safety permits, and sales tax permits.
  • Step 6: File for an Employer Identification Number (EIN)
    An Employer Identification Number (EIN) is a unique nine-digit number issued by the Internal Revenue Service (IRS) that is used to identify your LLC for tax purposes. Even if you don’t have employees, obtaining an EIN is typically required if you plan to open a business bank account, hire contractors, or file certain tax forms. You can easily apply for an EIN in Arkansas through the IRS website.
  • Step 7: Comply with Ongoing Requirements
    Once your LLC is established in Arkansas, it’s important to stay in compliance with any ongoing requirements. This may include filing periodic reports, paying Annual Report fees, and renewing licenses or permits. Familiarize yourself with the specific obligations for maintaining your LLC’s good standing in Arkansas.

Remember, starting an LLC in Arkansas involves some specific steps and requirements that may differ from other states. It’s advisable to hire an LLC Services in Arkansas that specializes in business formation to ensure that you follow all the necessary procedures accurately and efficiently. We reviewed the Best LLC Services for you to check out.

LLC Cost in Arkansas

It is crucial to consider the costs associated with the formation and maintenance of your business. The costs of establishing and operating an LLC in Arkansas can vary based on several factors, including the initial formation fees, ongoing compliance requirements, and optional expenses.

Initial LLC Costs

When starting a limited liability company (LLC), knowing the initial costs associated with forming and registering your new business entity is essential. Understanding and preparing for these expenses can help you budget effectively and set your Arkansas business on a path to success. Some common initial costs associated with forming an LLC include Certificate of Organization filing fees, Registered Agent fees, and additional services, such as business name reservation fees.

Certificate of Organization Filing Fee

The first step in forming an LLC in Arkansas is to file the Arkansas Certificate of Organization with the Arkansas Secretary of State. This document officially creates the LLC and includes essential information about the business, such as its name, address, and Registered Agent.

This document includes essential information about your LLC, such as:

  • The name of your LLC
  • The address of your LLC’s principal office
  • The name and address of your Registered Agent
  • The purpose of your LLC (optional in some states)

You can typically file the Certificate of Organization online, by mail, or in person. A filing fee is associated with this process, which costs around $50. You can also file by mailing it to Arkansas Secretary of State, which is located at Arkansas Secretary of State, 1401 W. Capital Ave., Suite 250, Little Rock, AR 72201.

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Registered Agent Fee

An LLC in Arkansas must designate a Registered Agent who will be responsible for receiving legal and government documents on behalf of the business. You can act as your own Registered Agent or appoint someone you know. Professional Registered Agent in Arkansas typically charge an annual fee ranging from $50 – $150.

In Arkansas, your Registered Agent must:

  • Be a resident of Arkansas or a business entity authorized to do business in the state.
  • Have a physical address in Arkansas (P.O. boxes are not acceptable)

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business.

We reviewed some of the Best Registered Agent Services in Arkansas and provided features as an add-on with their packages for you to check out.

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Business Name Reservation Fee

If you have a specific business name in mind and want to ensure it is available when you are ready to file your Certificate of Organization, you can reserve the business name with the Arkansas Secretary of State.

In Arkansas, your LLC name must:

  • Include the words “Limited Liability Company,” “LLC,” or “L.L.C.
  • Not contain any words or phrases that are prohibited by state law
  • Be distinguishable from the names of other businesses registered in the state

However, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application with the Arkansas Secretary of State to keep the name.

The online name reservation fee is $22.50, while the mail name reservation fee is $25. You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in-person filing. However, before filing Arkansas DBA, you should know that you need to renew your DBA, which cost $22.50 for filing online, and $25 for filing by mail or in person.

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Ongoing LLC Costs

After you know the initial costs of forming an LLC in Arkansas, you should also know the ongoing costs once you have filed for an LLC. Here are the involved costs that you need to know.

Annual Report Filing Fee

To keep your LLC in good standing, you must file Annual Report with the Arkansas Secretary of State. The Annual Report provides updated information about your LLC, such as changes in address, members, or Registered Agent.

In Arkansas, the Annual Report fee costs $0 because it is not mandatory which can be paid every 1 year (1st May of every year).

Franchise Tax or Annual LLC Tax

Some states require LLCs to pay an annual franchise or LLC tax, separate from the Annual Report filing fee. Franchise tax, or annual tax, is a fee imposed by Arkansas on businesses, including LLCs and Arkansas Corporations, for the privilege of operating within their jurisdiction. This tax is separate from income taxes and is usually based on factors such as the company’s net worth, assets, capital, or a fixed dollar amount, depending on the Arkansas’s specific tax regulations.

Arkansas LLC Taxes To Be Paid

The State of Arkansas is one of those rarest states in the United States that does not levy any personal income tax on businesses. However, the business LLCs must file other taxes with the State authorities.

  • Sales Tax: A sales tax is a government-imposed tax on the sale of goods and services. It is generally added to the price of a product or service at the point of sale and paid by the consumer. The tax is collected by the retailer or service provider, who then remits the collected tax amount to the relevant government authority. In Arkansas, the sales tax rate is 6.50%.
  • State Income Tax: Considering other taxes in Arkansas, you should pay for the state income tax, with a rate of 1-6.5%.
  • LLC Federal Self-Employment Tax: Federal self-employment tax rates are the same across all states. Self-employment taxes are imposed on self-employed individuals or members of a Limited Liability Company (LLC) taxed as a sole proprietorship or partnership.
  • Property Tax: The property tax is fixed at 0.62% of industrial, commercial, residential, agricultural, and all other properties.

Business Licenses and Permits

Depending on the nature of your Arkansas business and the location of your operations, you may need to obtain permits and business licenses in Arkansas. The costs of these licenses and permits will vary based on your specific business and location. In Arkansas, the business license ranges from $50 – $300. However, research the requirements for your LLC in Arkansas and budget for these expenses accordingly.

Optional LLC Costs

Here are the optional costs you must consider if you will form an operating agreement or hire a professional service.

Operating Agreement

Although not required by law, it is highly recommended that LLCs create an operating agreement in Arkansas. This document outlines the LLC’s ownership structure, management, and operating procedures. Hiring a business attorney to draft an operating agreement can cost anywhere from $500 to $2,000, or you can use online resources and templates to create one yourself.

Professional Services

You may hire professionals such as attorneys, accountants, or business consultants to help you establish and run your Arkansas LLC. These services can provide valuable expertise and guidance but come at an additional cost. Consider the potential benefits and weigh them against the costs when hiring professional assistance.

You may check out the Best Business Attorney Services in Arkansas that offer their professional services to form your business.

Can I Set Up an LLC For Free?

It’s impossible to set up an LLC entirely for free, as state filing fees and other costs are associated with establishing an LLC. However, you can save money by handling the formation process instead of hiring a professional service. Here are some steps to help you minimize the cost of setting up an LLC:

  • Choose your LLC’s name and check for availability in your state. This can generally be done through the Secretary of State’s website.
  • Prepare and file the Certificate of Organization yourself. Arkansas offer an online filing option or downloadable forms on their websites. By completing this process independently, you can avoid paying additional fees for a professional service.
  • Act as your own Registered Agent if permitted within Arkansas. It allows the business owner to serve as the Registered Agent, saving you the cost of hiring a professional registered agent service.
  • Create your own Operating Agreement using online resources and templates. Although not required in every state, an Operating Agreement is highly recommended to outline your LLC’s ownership structure and management. By drafting this document yourself, you can save on legal fees.
  • Research and apply for any required licenses and permits on your own. Depending on your business type and location, you may need specific permits or licenses. These costs can vary, but handling the application process yourself can save you the expense of hiring a professional service.

While you can’t set up an LLC for free, taking a do-it-yourself approach and minimizing the use of professional services can help you save money during the formation process. However, handling these tasks requires time and effort, and there may be additional legal or financial risks if mistakes occur.

FAQs

What is the cost to form an LLC in Arkansas?
The filing fee to form an LLC in Arkansas is $50.
Does Arkansas require an annual report for LLCs?
Yes, LLCs in Arkansas are required to file an annual report. The fee is $150.
Are there any additional fees for forming an LLC in Arkansas?
Yes, Arkansas charges a $25 fee for expedited processing of the filing.
How long does it take to form an LLC in Arkansas?
The normal processing time is 7-10 business days, but expedited processing is available in 1-2 business days.
What is the process of forming an LLC in Arkansas?
You must file Articles of Organization with the Arkansas Secretary of State, pay a filing fee, and publish a notice in a newspaper.
Is there a publication requirement for LLCs in Arkansas?
Yes, new LLCs in Arkansas are required to publish a notice of formation in a newspaper.
How much does it cost to publish a notice for an Arkansas LLC?
The cost of publication varies by newspaper, but it is usually around $150.
Can I form an LLC online in Arkansas?
Yes, you can file your Articles of Organization online through the Arkansas Secretary of State’s website.
Do I need an attorney to form an LLC in Arkansas?
No, you don’t need an attorney to form an LLC in Arkansas, but legal advice can be helpful.
How can I check if my desired LLC name is available in Arkansas?
You can check if your desired name is available by searching the Arkansas Secretary of State’s business name database.
Can I reserve an LLC name in Arkansas?
Yes, you can reserve an LLC name in Arkansas for 120 days by filing an application and paying a fee.
Can I change my Arkansas LLC’s name?
Yes, you can change your LLC’s name by filing an Articles of Amendment and paying a fee.
What types of taxes do Arkansas LLCs have to pay?
Arkansas LLCs may need to pay state taxes, federal taxes, and local business taxes.
Is there a minimum tax for LLCs in Arkansas?
Yes, Arkansas LLCs are required to pay a minimum tax of $150 each year.
What is the tax rate for Arkansas LLCs?
The tax rate for Arkansas LLCs varies depending on the income of the business.
What is the fee to file an Arkansas DBA for an LLC?
The fee to file an Arkansas DBA for an LLC is $25.
Do I need an EIN for my Arkansas LLC?
Yes, Arkansas LLCs are required to obtain an employer identification number from the IRS.
What is the fee for an EIN for an Arkansas LLC?
Obtaining an EIN for an Arkansas LLC is free.
Can I get a sales tax permit for my Arkansas LLC online?
Yes, you can apply for a sales tax permit online through the Arkansas Department of Finance and Administration.
How much does it cost to register for a sales tax permit in Arkansas?
The cost of a sales tax permit in Arkansas varies by location, but it is typically $50.
Do I need a business license for my Arkansas LLC?
It depends on the location and type of business. Contact your local government to learn more.
What are the ongoing costs for Arkansas LLCs?
There is an annual fee of $50 to keep an Arkansas LLC in good standing.
Does Arkansas require an operating agreement for LLCs?
No, Arkansas does not require LLCs to have an operating agreement, but it is recommended.
Can I file a UCC lien through the Arkansas Secretary of State for my LLC?
Yes, you can file a UCC lien through the Arkansas Secretary of State for your LLC.
Is there a fee to file a UCC lien for an Arkansas LLC?
Yes, the fee for filing a UCC lien in Arkansas varies depending on the type of lien.
How do I dissolve an LLC in Arkansas?
To dissolve an Arkansas LLC, you must file Articles of Termination and pay a fee.
Do I need to give notice to creditors before dissolving my Arkansas LLC?
Yes, you are required to give notice to your LLC’s known creditors before dissolving.
Can I reinstate a dissolved Arkansas LLC?
Yes, you can reinstate a dissolved Arkansas LLC by filing the application for reinstatement and paying the required fees.
How long do I have to file for reinstatement of my Arkansas LLC?
You have up to 5 years after dissolution to file for reinstatement of your Arkansas LLC.
What are the minimum costs of forming an LLC in Arkansas?
The minimum cost to form an LLC in Arkansas is $50.
What is the maximum cost of forming an LLC in Arkansas?
The maximum cost of forming an LLC in Arkansas is $300.
Are there any additional fees when forming an LLC in Arkansas?
Yes, there are additional fees such as filing fees and an annual franchise tax.
How much is the annual franchise tax in Arkansas?
The annual franchise tax in Arkansas is $150.
Is there a penalty for not paying the annual franchise tax in Arkansas?
Yes, there is a penalty for not paying the annual franchise tax in Arkansas.
Can an Arkansas LLC be formed online?
Yes, an Arkansas LLC can be formed online.
What are the advantages of forming an LLC in Arkansas?
The main advantages of forming an LLC in Arkansas are limited liability protection and pass-through taxation.
Are there any residency requirements for forming or running an LLC in Arkansas?
No, there are no residency requirements for forming or running an LLC in Arkansas.
Do I need to hire a lawyer to form an LLC in Arkansas?
It is not required by law to hire a lawyer to form an LLC in Arkansas, but it may be beneficial to consult one.
Is it possible to change the business structure of an existing business to an LLC in Arkansas?
Yes, it is possible to change the business structure of an existing business to an LLC in Arkansas.
How many members can an LLC have in Arkansas?
An LLC in Arkansas can have as many members as needed.
Can an LLC be owned by another corporation in Arkansas?
Yes, an LLC can be owned by another corporation in Arkansas.
Is there a limit on the number of LLCs an individual can form in Arkansas?
No, there is no limit on the number of LLCs an individual can form in Arkansas.
Is there a publication requirement for newly formed LLCs in Arkansas?
No, there is no publication requirement for newly formed LLCs in Arkansas.
Is an operating agreement required for LLCs in Arkansas?
An operating agreement is not required by law for LLCs in Arkansas, but it is recommended.
Do I need to have a registered agent in Arkansas for my LLC?
Yes, having a registered agent in Arkansas is required for all LLCs.
Can I serve as my LLC’s registered agent in Arkansas?
Yes, you can serve as your LLC’s registered agent in Arkansas.
What is a certificate of good standing in Arkansas, and do I need one for my LLC?
A certificate of good standing is proof that your LLC is authorized to do business in the state of Arkansas. It may be required for certain transactions.
Can an LLC in Arkansas be reinstated after it has been dissolved?
Yes, an LLC in Arkansas can be reinstated after it has been dissolved.
Are there any anonymity options for LLC members in Arkansas?
Arkansas does not provide any anonymity options for LLC members.
Is there a residency requirement for the registered agent of an LLC in Arkansas?
No, there is no residency requirement for the registered agent of an LLC in Arkansas.
What is the process for changing the registered agent of an LLC in Arkansas?
To change the registered agent of an LLC in Arkansas, you must file a Statement of Change of Registered Agent with the Secretary of State.
Are there any annual reports that an LLC in Arkansas must file?
No, there are no annual reports that an LLC in Arkansas must file.
Can an LLC in Arkansas engage in any type of business activity?
Yes, an LLC in Arkansas can engage in any type of lawful business activity.
What business records must an LLC in Arkansas keep?
An LLC in Arkansas must keep records of its financial transactions and other pertinent information.
Is it possible to change the name of an LLC in Arkansas?
Yes, you can change the name of your LLC in Arkansas by filing Articles of Amendment with the Secretary of State.
How long is the process for changing the name of an LLC in Arkansas?
It typically takes around 7-10 business days to complete the process of changing the name of an LLC in Arkansas.

Also Read

How to Save Money While Starting Your Business LLC in Arkansas

First and foremost, when starting a business, one of the most important things you can do is to create a solid business plan. This plan should outline your goals, target market, competition, marketing strategies, and financial projections. By having a well-thought-out plan from the get-go, you can avoid costly mistakes and make more informed decisions throughout the process.

Another way to save money while starting your business in Arkansas is to take advantage of the resources available to entrepreneurs. There are many organizations and government agencies that offer free or low-cost services to help you start and grow your business, such as the Small Business Administration, SCORE, and the Arkansas Small Business and Technology Development Center.

In addition, networking with other experienced entrepreneurs and business professionals can provide invaluable insights and support without the high costs of hiring consultants. By building relationships with others in the business community, you can gain access to valuable resources, advice, and even potential business partners or investors.

When it comes to financing your business, consider alternative funding options that can help you save money in the long run. Instead of maxing out credit cards or taking out high-interest loans, explore options like crowdfunding, peer-to-peer lending, or seeking out angel investors or venture capitalists who may be willing to invest in your business in exchange for equity.

Cutting costs wherever possible is also a key strategy for saving money while starting your business. Look for ways to reduce overhead costs by sharing office space, choosing affordable technology solutions, considering remote work options for employees, and outsourcing tasks that can be done more cost-effectively by external contractors.

Furthermore, consider bootstrapping your business, which means funding it yourself through personal savings, revenue from early customers, or by taking on side gigs to supplement your income. By bootstrapping your business, you retain full control over your venture and avoid accumulating debt that can be burdensome in the long run.

Lastly, be prepared to wear multiple hats and take on a hands-on approach when it comes to running your business. By being actively involved in all aspects of your venture, from marketing and sales to operations and customer service, you can save on hiring costs and ensure that your vision is being executed exactly as you intended.

Starting a business can be a challenging but rewarding journey, and by implementing these cost-saving strategies, you can make it more manageable and financially sustainable. By creating a solid business plan, taking advantage of available resources, networking with other professionals, exploring alternative funding options, cutting costs, bootstrapping your business, and being hands-on in your approach, you can set your business up for success while also saving money along the way.

Conclusion

Forming and maintaining an LLC in Arkansas involves various costs, including initial filing fees, ongoing annual report fees, and taxes. Understanding and planning for these costs is essential when establishing your LLC. Additionally, consider any optional expenses, such as hiring professional services or drafting an operating agreement, to ensure the success and longevity of your LLC in Arkansas.

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