Arkansas Entrepreneur Guide
They will help you complete most of these steps and register your company with the state when you use their business formation services. They can help you with everything, from opening a bank account to building a website.
1) Create a business plan
If you don’t have any goals or direction, it can be a difficult task to run a business.
Your business plan is the foundation for your future success. It allows you to analyze the key components of your business and create pathways to reach your goals. These are some things that you should include in your business plan.
- Executive Summary (a separate document that provides a comprehensive overview of your business goals, purpose, and competition.
- Description of the company
- Market Analysis (opportunities, competition, etc.)
- Organizational structure or management
- Services and products
- Marketing strategies
- Funding goals
- Financial projections
Business plans are not only great for internal operations but also give your business credibility before potential investors, customers and partners. Looking for help? This guide is available from the U.S. Small Business Administration.
2) Choose a business name
It’s possible that you have the perfect name. You might be lucky if you have the perfect name. Sometimes it can be hard to decide on a business. This is why brainstorming sessions and late-night rap sessions are necessary. Your business name is your identity and reputation. Your business name should not only be memorable, but should also reflect your purpose.
You will need to choose a name that is appropriate for the type of business you are forming. Limited liability companies, for example, must include the words “limited liability”, “L.L.C.” or “LLC.”
It must also be accessible, not registered or reserved for any existing business. Perform a name search before you print business cards or promotional materials. If it is, you can claim it by submitting a name reservation and using it in your Articles of Organization.
3) Choose a legal structure
Although there are only a handful of types of business structures available, each one has important aspects that will affect how your business runs.
These include the sole proprietorships, general partnerships, limited liability companies (LLC), S corporations, and C corporations. Because of its unique combination of flexibility and protection of personal assets, the LLC is preferred by small businesses.
You should research all options before making a decision. We have done extensive research on each type of business and created side-by-side comparisons. For more information, see our LLC vs. Corporation and LLC vs. For a closer look, take a look at our Sole Proprietorship Comparison Guides.
4) Select a registered agent
The Secretary of State requires a point-of-contact for your business. This person will be available at your registered address during normal business hours, 9 am-5 pm.
The registered agent is a person who acts as an intermediary between the state and your company, receiving all important legal communications from the state and passing them on to you. You should choose an Arkansas registered agent to ensure that important documents, deadlines and payments are not lost.
There are many options for registered agents, but the state has only a few restrictions. The agent must:
- You can be an Arkansas resident, or a business entity that is authorized to do business within Arkansas.
- Arkansas residents must have a physical address (not a PO Box). box).
- Arkansas postal address.
- The LLC cannot do this. Arkansas LLCs cannot act as their own agents.
It is a good idea to choose someone who is familiar with your business (like the owner) or who has experience in running a business like an attorney. Family members and friends can also be options. If you wish, you can also appoint yourself.
You can also choose to use a registered agent service. These companies will take care of all your registered agent responsibilities and even manage your annual reporting and business formation.
Important: The Secretary of State must maintain a current record of your registered agent. You must notify your agent if they resign or you appoint another.
Register Your Business
This is the most important step, and it creates your company. You will need to register your business with the Secretary Of State, regardless of what type it is.
LLCs: To get started as a limited liability company, you will need to complete and submit an Articles Of Organization to the Arkansas Secretary of State. Online registration costs $45, and hard copies cost $50. This will allow you to officially register your company and make it public with the state.
Corporations: The startup process for a corporation is not much different from that of an LLC. Instead of filing Articles of Organization, submit an Articles of Incorporation form.
Sole Proprietorship/General Partnership: There are no official forms or fees to register as a sole proprietor or general partnership. Just start your business! Although this is faster and more convenient, we recommend that you incorporate your business to protect your personal assets.
Foreign Entities Maybe you have a business already, but it is in another state and you are expanding to Arkansas. You don’t need to worry about Articles of Organization and Articles of Incorporation in this instance. Instead, you will need to foreign qualify your company. The Application for Certificate of Registration is a separate document. It can be filed online or in hardcopy. Separate digital and paper forms are available for companies and LLCs.
6) Apply for an EIN
Your ticket to filing state and federal taxes is the Employer Identification Number (EIN). It is a nine-digit number that, similar to a Social Security Number (SSN), identifies your company on tax documents.
When you form an LLC, the entity will be treated as a “pass-through” entity. This means that the business won’t have to pay federal income tax. Instead, income and losses will be reported by you and your fellow members on your personal tax returns.
However, you don’t have to get an EIN. You will need an EIN if your LLC is required to pay any type of business tax, such as sales, use, or unemployment taxes, or hires employees.
Not sure if you require one? You can apply for an EIN by visiting the IRS link “Do I require an EIN?” You’ll get your number as soon as you complete the online application.
You can also submit a form SS-4 via fax to (855) 641-9935 or mail to :
Internal Revenue Service Operation
ATTN EIN Operation
Cincinnati, OH 45999
7) Open a Business Bank account
Corporation and LLC owners must keep their personal and business finances separate or risk losing their personal assets protection. You will need a business bank accounts to do this.
Opening a business bank account can be easy. You can simply visit your local bank branch to meet with a banker. Your documents of formation, your EIN number, and personal information will be required. You can then direct all your business income and expenses into that account instead of a personal one.
You don’t have to choose between a large bank like Wells Fargo, Bank of America, or a smaller local bank. It’s easier to choose the bank where you already have accounts.
8) Manage Any Tax Obligations
Taxes are an important part of any business.
It is important to be familiar with the tax requirements of your business so that you can create a solid financial plan. LLCs do not need to file a corporate income tax return or pay federal income taxes. You will handle these taxes in your personal return.
Corporations, on the other hand, will need to file a Corporate Income Tax Return, while sole proprietorships/general partnerships will need to pay self-employment taxes.
Arkansas may have additional taxes that your business might owe depending on your specific circumstances.
Franchise Tax: This tax is levied on all Arkansas companies for the privilege to do business in Arkansas. It will be due each year with your Annual Report filing. For corporations and LLCs, it is $150. For corporations with stock, it is $300. You can find all forms here. You can pay this tax online or by mail prior to May 1, each year.
Sales & Use Tax: Any Arakansas company that sells merchandise must pay a Sales & Use Tax. This tax is subject to change every year so be sure to keep checking for any updates.
Unemployment and Withholding Taxes: These are required for any business that hires or maintains employees. The Withholding tax can be obtained through the Department of Finance and Administration. The Unemployment insurance Tax can be found under the Division of Workforce Services.
Arkansas Department of Finance and Administration has a guide for new taxpayers . For more information on how to pay business taxes in Arkansas, please refer to this document.
9) Locate an Accountant
Sometimes, it is easier to leave your financial responsibilities to professionals. An accountant will ensure that your taxes are correctly filed and paid. They might also be able to find ways to save you money.
Tax procedures and bookkeeping can be time-consuming and require specialized knowledge. An accountant can help you ensure your company runs smoothly and reduces expenses.
This service can be costly depending on your financial situation, but it can provide valuable benefits.
10) Make an Operating Agreement
An operating agreement creates a framework for procedures and standards that will apply to your business. Here you can set up processes for member conduct and asset allocation, as well as compensation policies, voting procedures, and dissolution.
Operating agreements are not required in Arkansas but they are vital to the stability and success of your business. Operating agreements provide protection in legal disputes and help to establish legitimacy before banks, courts, government agencies, or other businesses.
Either you can create one yourself with an online template or hire an attorney to handle it.
After you have drafted the agreement, each member of your LLC must approve it and then file it with all other business documents. It does not have to be submitted to the Secretary of State.
This is an incorporation service that will help you register your company, provide an operating agreement or corporate Bylaws, and more than 25 other important documents.
11) Acquire the Required Licenses
Your business will be legally registered once you have filed your documents. However, Arkansas may require specific licenses before it can open its doors. It all depends on the type of business and its purpose. However, there are three major state licenses that you need to know:
Professional/Occupations Licenses: Not every entity needs a license to operate in Arkansas, but certain occupations and business purposes require them. Cosmetologists need to be licensed through the Department of Health, while electricians need to get licensure from the Department of Labor. To search for the right occupation or business purpose, use the search bar at Arkansas.gov.
Local Licenses: Each city, county, or municipality may have its own licensing requirements. To find out more, visit the website of your local government.
12) Consider Business Insurance
It’s never pleasant to think about, but there are always unforeseeable events that could cause financial damage to your assets.
Although forming an LLC/corporation offers some protection for personal assets, you can also get additional business insurance to protect your business assets in the event of damages or lawsuits. Insurance can be purchased for specific products, vehicles, occupations, and many other things.
Workers’ compensation insurance is required if you have employees. SBA.gov provides a helpful guide to help you determine which types of insurance your business may need.
13) Create a website
Your company’s online presence is as important as your physical one. You can find most potential customers online, so if your company doesn’t have an online presence, it’s missing out.
You don’t have to be an HTML or web designer to create a website. Squarespace and WordPress make it simple to create a beautiful and responsive website. If you aren’t confident or comfortable doing it yourself, you can hire a professional web developer to do it for you.
14) Launch Social Media accounts
Your website is not the only thing that will make your mark in the digital landscape. A strong social media presence is essential for any business to be successful. You can connect with potential customers organically through Facebook, Twitter, or Instagram.
You must make sure you post consistent content on social media to build a following.
15) Understanding Arkansas’s Current Requirements
Once you have launched your business, you can expect things to move at 100 mph as you grow and develop. During all the excitement, don’t forget about your state’s compliance requirements. Each state has its own business requirements, either annual or biennial.
To maintain good standing with Arkansas, your Arkansas business must file an Annual Report every year and pay a Franchise tax. The good news is that they are both part of one form. The fee is $150 for corporations and LLCs, and $300 for corporations with stock. It must be submitted by May 1. Late filings are subject to a $25 penalty and interest per day. Find Annual Report/Franchise Tax forms here for each type of business.
You must keep up with your franchise taxes and annual reports or your business could lose its good standing with the state.