LLC in Arkansas: Everything You Need to Know
If you are thinking of starting a business in Arkansas, you should consider forming a limited liability company, or “LLC.” 3 min read
2. Forming an LLC in Arkansas
3. Choosing a Name for Your LLC
4. Choose a Registered Agent for the LLC
5. Filing Articles of Organization
6. Establishing an Operating Agreement
LLC in Arkansas
If you are thinking of starting a business in Arkansas, you should consider forming a limited liability company, or “LLC.” An LLC is a type of business structure that is fairly popular among entrepreneurs starting up a company. As it says in the name, an LLC provides the owner or “member” with “limited liability,” in that the owner/member will not be held liable for any of the LLC’s debt or legal involvement. Except in very narrow circumstances, the owner’s personal assets are shielded from the creditors of the LLC.
The cost of forming an LLC in Arkansas is the cheapest in the country. It costs only $50 to file your LLC, whereas the national average is $100. Thus, in addition to the tax advantages the state offers, forming an LLC in Arkansas is a great idea.
Forming an LLC in Arkansas
There are a number of steps you must take in order to form an LLC in Arkansas. For instance, you must:
• Choose a business name for your LLC
• Designate a registered agent
• File Articles of Organization
• Obtain an employer identification number
• Pay the necessary start-up fees
These steps are fairly straightforward and can mostly be done on your own without the help of a lawyer specializing in LLCs. However, if you have any concerns or questions, there is no harm in retaining an attorney to help you through these initial steps and ensure everything is done correctly.
Choosing a Name for Your LLC
One of the first steps of forming an LLC is choosing a business name. Before you start investing tons of money and time into the name of your business, you should first run a search through the Arkansas business registration database to ensure that the name you want (or anything substantially similar) is not already taken. If it is already taken, Arkansas will reject your business name and ask that you choose something else. If it is available, you can reserve the name for three months by filing an “Application for Reservation of Limited Liability Company Name” with the Arkansas Secretary of State for a nominal fee.
Once you have chosen a unique name, you must include an identifier at the end. An identifier in this case would be “Limited Liability Company,” “Limited,” “LLC,” “Ltd.,”etc. You are not allowed to use “incorporated,” since the LLC is not a corporation, or any other word that would mislead the public.
You should also think about setting up a domain name so that your customers can search for you on the internet. Even if you do not set up a website immediately, it will be good to have in the future and prevents a competitor from buying the domain name first.
Choose a Registered Agent for the LLC
One of the requirements in Arkansas for forming your LLC is that you designate a registered agent. A registered agent is basically a person or a business that is legally authorized to send and receive legal documents on the LLC’s behalf. These legal documents include service of process papers, state filings, subpoenas, etc. The registered agent must be an Arkansas resident if an individual, or incorporated in the state if a business. The registered agent can be someone within the LLC.
Filing Articles of Organization
One of the primary requirements of forming an LLC is to create and file Articles of Organization with Arkansas. This document essentially acts as the LLC’s rules and sets forth rudimentary information about the company. It also formally establishes your LLC in the state. In Arkansas, filing the Articles of Organization costs $50.
Establishing an Operating Agreement
While most other states require an LLC to have an Operating Agreement, Arkansas does not. That being said, however, it is highly advised that you create one anyway. An operating agreement lays out the ownership and operating procedures of the business, such as what percentage is owned by what member, and the rights and duties of each member. Its a legal document that Arkansas will recognize as governing the LLC.
If you need help filing a limited liability company in Arkansas, you can post your legal need (or post your job) on UpCounsel’s marketplace. UpCounsel accepts only the top 5-percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.