An Arkansas business license is required by businesses and people in many occupations before providing services.

Arkansas Business Licenses and Permits for LLCs

The requirements for business licenses and permits depend on the location of the business and the industry. If you don't comply with these requirements, you could have to deal with penalties, fines, or losing the privilege of doing business in Arkansas. Your city or county could require additional permits or licenses. However, some Arkansas businesses don't need a license.

Many different licenses and permits are issued by state agencies, and others are granted locally. The names of the licenses and their requirements usually change with the nearest city or with the county. You should get licenses for every city or county that your business will work in. Many types of companies, including corporations and LLCs, must file records with the Arkansas Secretary of State. Before you start the paperwork for a business license, make sure that your company complies with local zoning regulations. You should also contact the IRS to see if your business should apply for an Employer Identification Number.

If sales are over $500,000 per year and you have more than four employees, you could have to comply with Federal labor laws and pay the Federal Unemployment Tax or FUTA. The annual fees for permits and licenses depend on the type of business and the number of employees.

Licenses and Permits You Might Need in Arkansas

Here are some of the most common permits and licenses you could need:

  • Alarm permit
  • Business license 
  • Tax permit
  • Building permit
  • Occupational permit
  • Health permit
  • Zoning permit
  • Signage permit

You might have to pay several types of taxes:

  • Withholding tax
  • Sales tax
  • Use tax 
  • Unemployment insurance tax
  • Franchise tax 
  • Motor fuel tax

For more information on tax requirements, visit the Arkansas Department of Finance and Administration's income tax page. People in many professions should have professional licenses, including landscape architects, pharmacy technicians, social workers, barbers, and athletic trainers. For a full list of possible licenses, visit the Arkansas Professional Licensing page. You can also see business permits, licenses, and requirements on the state website.

Filing for Incorporation

Corporations, limited liability companies, or LLCs, partnerships, and non-profit organizations in Arkansas should register themselves with the Secretary of State. Sole proprietorships don't have to register with the Secretary of State, but the name of the business is the owner's name by default. Also, the owner is liable for all business claims and debts.

A general partnership, a sole proprietorship or any other business using a name that's different from the owner's name must file for a name through a process called Doing Business As. At any county clerk office, you can submit a Doing Business Under an Assumed Name Certificate with the Secretary of State.

Withholding Income Taxes

After the fourth quarter of the year, employers should keep employment tax information for at least four years. These records should include personal information about employees, the employer identification number and similar information, wage data, pension data, and more.

Employees must give employers a completed copy of Form W-4, the withholding exemption certificate. Then, the employer will mail it to the IRS. Employers should also send Form W-2  to the Social Security Administration every year before March 1st. If the form will be submitted electronically, it will be due at the end of March. Form W-2 contains information about the taxes withheld by the employer and the wages paid to employees. Employees should get copies before February 1st. 

Employee Eligibility Verification 

New employees must finish Form I-9 and submit it to their employers within three days of starting work. The form is proof of employment eligibility in the United States, and employers should keep it on file.

Reporting New Hires

Employers need to communicate information about new and returning employees to the Arkansas New Hire Reporting Center less than 20 days after employment begins. This information includes the employee's name, social security number, contact information, and health benefits. 

Insurance Requirements

Employees come with several extra tax expenses, including unemployment insurance and workers' compensation taxes. Workers' compensation taxes fund payments for people who get hurt at work. Unemployment insurance taxes let workers get temporary support while they're unemployed.

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