Find out how to qualify your LLC to conduct business in Arkansas.
If you own a company that was founded in a state other than Arkansas, you must qualify or register it in Arkansas in order to conduct business there. The requirements for qualifying your international (non-Arkansas) limited liability corporation (LLC) to conduct business in Arkansas are summarized here.
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What exactly is a Foreign LLC?
If your LLC was founded in another state, it is referred to as a foreign LLC in Arkansas. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Indiana, for example, is a foreign LLC in Illinois.
Doing Business in Arkansas
If you are “transacting business” in Arkansas, you must register your foreign corporation with the state, according to Arkansas’ LLC Act. What exactly does this mean? As with other states, Arkansas’ LLC Act does not define “transacting business” in reference to international registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Arkansas’ LLC Act, like other states’, stipulates some acts that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state having an office, agency, or persons in the state for handling your company’s own securities selling through independent contractors soliciting or obtaining orders if the orders require acceptance outside the state before they become contracts
The LLC Act clearly states that this list is not exhaustive; additional activities may be exempt as well. Check Section 4-32-1008 of the Arkansas Revised Statutes for a complete legal definition of each of the listed things.
If your LLC’s only operation in Arkansas is one or more of the activities mentioned above, you should not be required to register with the state.
Registration Certificate
You must submit an Application for a Certificate of Registration with the Arkansas Secretary of State to register your business in Arkansas (SOS). The application form may be downloaded on the SOS website. (The form’s full name is Application for Certificate of Registration of Foreign Limited Liability Company, which is a mouthful; it’s Form FL-01.)
To complete the application, you must give the same information that you would provide to register an LLC in your home state. You must supply the following information for the Arkansas application:
If necessary, the fake name under which your LLC will do business in Arkansas (required if your LLC’s original name or something extremely similar is currently being used by an Arkansas registered firm or if the name does not meet with the state’s LLC naming laws).
the state where your LLC was organized the date when your LLC was organized\s the duration (termination date) for your LLC\s the name and street address of your LLC’s registered agent in Arkansas\s the street address of the office required to be maintained in the state where your LLC was formed or, if no such office is required, the street address of your LLC’s principal office\s a certificate of existence or equivalent document, and\s an authorized signature.
The secretary of state in your LLC’s home state will normally provide the certificate of existence or a comparable document (such as a certificate of good standing).
In Arkansas, if your LLC will utilize a fake name, you must additionally attach a copy of a resolution of the LLC members, certified by the LLC secretary, stating that the LLC will use the fictitious name. You have the option of filing by mail or online. The price for filing is $300.
What Happens If You Do Not Sign Up?
If your LLC does business in Arkansas without being registered, it cannot sue in any of the state’s courts. The LLC will also be accountable for any costs that would have been owed had the LLC been properly registered. In addition, the LLC faces a civil penalty of up to $5,000 each year. However, not being registered does not render your LLC’s obligations null and void or bar it from defending a lawsuit in Arkansas. Furthermore, a member of an LLC is not accountable for the LLC’s debts and liabilities just because the organization did business in Arkansas without being registered.
Forming a Foreign Corporation
The regulations and standards for international qualifying in Arkansas are identical whether your company is structured as a corporation rather than an LLC. However, you will need to utilize a separate application form. For paperwork, information, and filing requirements for registering a foreign company in Arkansas, see the Arkansas Secretary of State’s website.