How Much Does an LLC Cost in Arkansas
Think starting an LLC has to break the bank? Arkansas might just change your mind. Form an LLC in Arkansas for as little as $45.
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Here are the following fees to consider:
- Certificate of Organization: $45 to $50
- Certificate of Registration: $270 to $300
- Annual Franchise Tax Report: $150
- Business Permits and Licenses: Typically $50+
- Business Taxes: Up to 3.9% of taxable income
- Optional Fees: Up to $3,000+
The conventional wisdom tells us that the early bird gets the worm. So with Arkansas currently enjoying steady economic growth, this could be the best time to start a business.
The question is: how much does it cost to form an LLC in Arkansas? Find out in this comprehensive guide, starting with the one-time state filing fee.
Limited time: Get 10% off LLC plans
- Pro package includes: Articles of organization, name check service, operating agreement, federal tax ID, bookkeeping tools, customizable legal documents, unlimited eSignatures for online agreements, and a customizable website.
- Premium package includes: Everything included in pro, plus business attorney guidance, unlimited 30-minute attorney consultations on new topics, LLC formation document changes within 30 days.
Certificate of Organization
One-Time Fee: $45 (online) | $50 (paper)[1]
To form an LLC in Arkansas, you must submit the Certificate of Organization to the Secretary of State. Once the documents are approved, your LLC will be recognized as a separate legal entity.
An Arkansas LLC's Certificate of Organization contains the following information, among other details:[2]
- Limited liability company name
- Registered agent name and address
- Principal office or address
- The name and title of at least one member or manager
You can file the Certificate of Organization online, by mail, or in person. Filings made online are typically processed faster than paper forms.
It's not possible to form an LLC in Arkansas for free. At a minimum, you need $45 to file the Certificate of Organization with the Secretary of State. If you're from out of state, the cost goes up to at least $270 for the filing fees.[3]
Certificate of Registration
One-Time Fee: $270 (online) | $300 (paper)[3]
If you already have an LLC in another state and want to expand your business to Arkansas, register it as a foreign LLC.
To create a foreign LLC in Arkansas, you must file an Application for Certificate Registration with the Secretary of State. Don't forget to attach a Certificate of Good Standing from your domestic state
.
In Arkansas, only limited partnerships are required to file annual reports. However, limited liability companies must still file a franchise tax report yearly.
Franchise Tax Report
Annual Fee: $150[4]
Arkansas LLCs must file annual franchise tax reports with the Secretary of State. It's a yearly report to let the state know your business is still active, but it's also more than that.
Unlike an annual report, the franchise tax report is also a tax imposed on LLCs for the privilege of doing business in the state.
Franchise tax reports are due by May 1st each year.[5] You can pay in cash or card, but there's a minimum of $5 processing fee for card payments.[4]
You can still submit the franchise tax report to the Secretary of State after the May 1st due date. However, you'll pay a $25 late fee plus interest on top of the $150 filing fee.[4]
Business Permits and Licenses
Annual Cost: Typically $50+
Arkansas has no state-level general business license. However, all for-profit businesses in the state must pay the $50 sales and use tax permit fee.[6] This allows your business to collect and remit sales and use tax.
Additionally, you might need local business permits and licenses. Some businesses may be regulated by various governmental offices simultaneously and could be renewable yearly.
Business Taxes
Annual Cost: 0% to 3.9% of taxable income[7]
By default, the LLC itself doesn't pay income tax. Instead, the profits and losses are passed on to the owners, who are then charged an income tax.
The current income tax rate in Arkansas is up to 3.9% of taxable income.[7] However, tax rates may vary yearly because the state has no fixed tax.
The new PET
allows the LLC itself to pay income tax instead of the obligation passing through to individual owners.[8] This is an optional tax method as it may not benefit all LLCs.On top of that, you must also pay federal income taxes.
Federal Income Tax Rates for 2024:[9]
| Tax Rate | Taxable Income |
|---|---|
| 10% | $0 to $11,600 |
| 12% | $11,601 to $47,150 |
| 22% | $47,151 to $100,525 |
| 24% | $100,526 to $191,950 |
| 32% | $191,951 to $243,725 |
| 35% | $243,726 to $609,350 |
| 37% | Over $609,350 |
Don't forget the 15.3% federal self-employment tax.[10]
The fees that you'll incur when forming an LLC can be claimed as tax deductions. You can write off the following expenses:
Optional Fees
While the fees below are generally optional, some are unavoidable depending on your business needs.
For example, obtaining a Certificate of Good Standing is often necessary when opening an LLC bank account.
| Arkansas LLC Optional Fees | Cost |
|---|---|
| Registered Agent Services | Up to $400+ |
| Operating Agreement | Up to $500+ |
| Employer Identification Number | $50 to $99 |
| BOI Report | $25 to $149 |
| LLC Name Reservation | $22.50 - $25 |
| Fictitious Name | $22.50 - $25 |
| Statement of Correction | $30 |
| Certificate of Amendment | $25 |
| Certificate of Good Standing | $25 |
| Certificate of Existence | $15 |
| Certified Copy of Documents | $5 + $0.50 per page |
| Website Domain | $10 to $20 |
| Business Insurance Premiums | Varies |
The Arkansas Secretary of State does not offer expedited services for LLCs. However, filings made online are typically processed within a week.[11] Mailed-in documents are processed after they are received.
Registered Agent Services
Annual Cost: $0, or $100-$300/yr
In Arkansas, you must have a registered agent to receive business and legal documents for your LLC. This includes government notices, tax forms, and annual reporting forms.
You can technically be your LLC's registered agent—as long as you're at least 18 and have a physical street address in Arkansas. You must also be available to receive documents during business hours.
However, your address will be public record. So many LLCs like to hire a registered agent service to keep their personal details private. These services usually charge $100-$300 per year to be your registered agent.
Registered Agent Service - $125/year
- Business address included
- Free mail forwarding
- Lifetime guide service with business experts
- Never sell your data. Ever.
No, you don't need an attorney to form an LLC in Arkansas. You can form on your own or hire a formation service to help you.
Operating Agreement
Cost: $0, or up to $500+
LLCs in Arkansas are not required to have an operating agreement. However, it's recommended because it defines important rules and regulations that all members must follow.
An LLC operating agreement contains the following:
- The roles and responsibilities of each member
- How new or departing members will be treated
- How business profits and losses will be divided
Ideally, you should already have a signed Operating Agreement before forming an LLC in Arkansas. But if your LLC is already formed, you can always draft it yourself after.
Alternatively, an LLC attorney might charge you a $500 flat fee for a standard operating agreement. If you have more complex details, the cost could be higher.
You can write your own with free online operating agreement templates. If you want a professional to create it for you, LLC services usually offer this as a part of their packages for much less than attorney costs.
Employer Identification Number
Cost: $0, or $50 to $99
Any LLC with more than one member or with employees must have an EIN, regardless of how it's taxed. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax-related purposes.
You can just apply for an EIN for free on the IRS website. But if you'd like an LLC service to process it for you, you can do so for a small fee. Here are some providers that do this and their pricing:
- Northwest Registered Agent: $50
- Bizee: $70
- ZenBusiness: $99
Single-member LLCs in Arkansas don't require an EIN, but it's almost essential in practice. For instance, you'll need one if you hire employees or want to open a business bank account.
Yes. Separating your LLC's finances from personal assets is a requirement of liability shielding. Use a separate bank account to accept payments and pay business expenses to prevent piercing the corporate veil .
BOI Report
One-Time Cost: $0, or up to $149
The Beneficial Ownership Information (BOI) is a one-time report that must be submitted to the Financial Crimes Enforcement Network (FinCEN) within 90 calendar days of your LLC's formation.[12]
It includes information about the LLC's beneficial owners, including name, birth date, and address.
FinCEN doesn't charge a fee to submit your BOI report. But you can pay an LLC service to process it for you and save yourself the hassle:
- Northwest Registered Agent: $25
- LegalZoom: $149
- ZenBusiness: $149
You're considered a beneficial owner if you own 25% or more of the ownership interests in your LLC. Or if you exercise substantial control over the LLC.
Name Reservation
Cost: $22.50 (online) | $25 (paper)[1]
You can reserve your desired name first if you've already got a business name but aren't ready to form an LLC. This will prevent others from using that name for 120 days.[13]
If you need more time, renew the name reservation for the same fee and get another 120 days.[13]
Don't forget to review Arkansas's naming regulations. For example, an LLC name must include LLC, Ltd., or similar.
Fictitious Name
Cost: $22.50 (online) | $25 (paper)[1]
A fictitious name (also known as "Doing Business As" or DBA) allows your LLC to operate under a name different from its legal name registered with the state.
Some LLCs use a DBA for branding purposes. It's also ideal if you want to use a name without "LLC" at the end.
Fictitious names in Arkansas don't expire. So unlike other states, you don't have to pay an annual fee.
Statement Correction
Cost: $30[14]
After your Arkansas LLC application is approved, review all the details of the Certificate of Organization carefully.
If there are errors, like a misspelled business name or incorrect address, correct them as soon as possible by filing the Statement of Correction.
Certificate of Amendment
Cost: $22.50 (online) | $25 (paper)[1]
Your Arkansas LLC's Certificate of Organization contains specific details about your business. Should these details change, you must file an amendment to the Secretary of State.
File the Certificate of Amendment if you:
- Change the LLC name
- Have a new principal address
- Appoint a new registered agent
The Statement of Correction is for fixing mistakes in initial filings. Meanwhile, the Certificate of Amendment updates key details as the LLC evolves.
Certificate of Good Standing
Cost: $25[15]
A Certificate of Good Standing is an official document by the Secretary of State. It verifies that your LLC is updated with all state filings and has paid all its fees and taxes.
You might need a Certificate of Good Standing to:
- Open a bank account
- Apply for business loans
- Qualify for business insurance
- Conduct business as a foreign LLC
In Arkansas, a certificate of good standing is only available to download within two weeks of purchase.[15] You'll pay an additional $3 processing fee if you purchase online.[16]
Contact the Secretary of State to ask why your LLC is in bad standing. The most common reasons include:
- Failure to file the annual franchise tax report
- Failure to renew business permits and licenses
- Not having a registered agent in Arkansas
Certificate of Existence
Cost: $15[16]
A Certificate of Existence confirms that your LLC exists in Arkansas. It verifies that your business was formed legally and is currently registered with the state.
It may be required when opening a bank account or registering to do business in another state.
In most states, the terms "Certificate of Good Standing" and "Certificate of Existence" are often used interchangeably because they refer to the same document.
However, Arkansas is an exception. A Certificate of Existence proves your business is currently registered with the state. Meanwhile, a Certificate of Good Standing proves your business exists and is in good standing with the state.
Certified Copies
Cost: $5 + $0.50 per page[16]
Certified copies of documents verify that your LLC is legitimate and that its details are accurate.
You might need these for circumstances like opening a business bank account or expanding your LLC in another state.
Additionally, some LLCs keep certified copies of their initial Certificate of Organization and amendments (if any) for recordkeeping purposes.
debit card transactions for records requests.[16]
Business Website Domain
Annual Fee: $10 to $20
A website domain and social media presence provide dedicated online spaces for your business. It's essential for marketing, customer engagement, and brand visibility in today's digital world.
Even if you aren't planning to build a business website now, you could still buy the domain name. This will prevent others from using your LLC's name as a web address.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
Business Insurance Premiums
Cost: Varies
You may be required to purchase workers' compensation insurance if your business has at least three employees.[17] You can purchase from a private insurer, self-insure, or join the Arkansas Assigned Risk Pool.
Your LLC might also be required to get other types of insurance:
- General liability insurance
- Commercial property insurance
- Professional liability insurance
- Cyber liability insurance
The cost depends on factors like the number of employees, the risk level of your industry, and your past insurance claims.
Bottom Line
If you want to stake your claim in the state's growing economy, there's no better time than now to form an LLC in Arkansas.
With just $45, you can file a Certificate of Organization with the Secretary of State and grab a slice of the expanding market.
Limited time: Get 10% off LLC plans
- Pro package includes: Articles of organization, name check service, operating agreement, federal tax ID, bookkeeping tools, customizable legal documents, unlimited eSignatures for online agreements, and a customizable website.
- Premium package includes: Everything included in pro, plus business attorney guidance, unlimited 30-minute attorney consultations on new topics, LLC formation document changes within 30 days.
Set Up Your LLC - $0 + State Fees
- Free business plan included (no credit card required)
- Lifetime compliance alerts
- Comprehensive name check
- Lifetime customer support via email and phone
Business Formation Service - $39 + State Fees
- Form Your LLC, Corporation, or Nonprofit Today
- A Fully-Formed Business
- Registered Agent Service
- Business Address
- Mail Forwarding
- Privacy by Default
Starter - $0 + State Filing Fees
- Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
- Standard filing speed
- 100% accuracy guaranteed
- Other services are available with additional costs
Just remember that Arkansas LLCs have annual expenses, including the $150 franchise tax report. Ultimately, it's never a bad idea to set aside an extra budget for unexpected fees.
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References
- ^ Arkansas Secretary of State. Limited Liability Company (LLC), Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Certificate of Formation for Limited Liability Company, Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Foreign Limited Liability Company, Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Franchise Tax/Annual Report Forms, Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Annual LLC Franchise Tax Report 2024, Retrieved 09/09/2024
- ^ Arkansas Department of Finance & Administration. Register for a Tax Account, Retrieved 09/09/2024
- ^ Arkansas Department of Finance & Administration. Income tax withholding tables adjusted due to most recent tax cut, Retrieved 09/09/2024
- ^ Arkansas Department of Finance & Administration. Pass-through Entity Tax, Retrieved 09/09/2024
- ^ IRS. Federal income tax rates and brackets, Retrieved 09/09/2024
- ^ IRS. Self-employment tax (Social Security and Medicare taxes), Retrieved 09/09/2024
- ^ Arkansas Secretary of State. For New Businesses, Retrieved 09/09/2024
- ^ Financial Crimes Enforcement Network. Beneficial Ownership Information, Retrieved 10/02/2024
- ^ Arkansas Secretary of State. Application for Reservation of Entity Name, Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Statement of Correction, Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Certificate of Good Standing, Retrieved 09/09/2024
- ^ Arkansas Secretary of State. Records Request Form Instructions, Retrieved 09/09/2024
- ^ Arkansas Secretary of State Department of Labor and Licensing. What Employers Should Know, Retrieved 09/09/2024
Nicole King is a research analyst at CreditDonkey, a business formation services comparison and reviews website. Write to Nicole King at nicole.king@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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