Choosing to start a new company is both exhilarating and terrifying. It’s the first of many choices you’ll have to make along the path. Depending on where you reside, you may need to register your company at the state, municipal, and federal levels. This guide will assist you through the process of registering your Arkansas company.
Arkansas Business Registration
1. Give Your Arkansas Business a Name
There is one crucial step you must do before registering your new business: you must choose a name. While naming your new company may seem simple on the surface, it is really one of the most important and time-consuming activities you will do throughout the business launch process.
Your company’s name should be unique and capture customers’ attention, but it also conveys much more. It should provide a clear message about the things you sell and/or the services you provide. The name of your firm exposes the public to your brand and may convey a message about your company and what it stands for.
Considering Your Name
While many entrepreneurs are inclined to speed through the name process, you should take your time and investigate all naming options. Take multiple brainstorming sessions and utilize the free internet business tools available today to assist you come up with a variety of choices, narrowing them down as you go.
Our company name generator is a fantastic, industry-specific brainstorming tool that will not only help you come up with the right name, but will also verify domain name availability for you. If you’re still unsure where to begin, our name guide may help you establish your brand and provides practical recommendations for brainstorming sessions.
Arkansas Name Lookup
Once you’ve narrowed down your options, you’ll need to determine whether any of them are already being used by another company in your state.
The Secretary of State of Arkansas features an incorporation search engine that may assist you identify company organizations by name. You should also make sure that your name isn’t too similar to any existing firm in your state. This will assist to prevent future misunderstanding and legal problems.
It’s time to start legitimizing your firm once you’ve chosen a name that appropriately portrays your brand. These following procedures will differ based on your company structure and the legal requirements of your state. The next section will go through the various company structures.
If you choose to utilize a “doing business as” (DBA) name, also known as an assumed name or fake name in Arkansas, our DBA guide will assist you in ensuring that you are legally registered at the state, county, and/or municipal levels. There are a number of advantages to registering your assumed name with the state. It provides an additional degree of security against other Arkansas firms, establishes your company’s validity, and may be needed by certain suppliers, banks, and lenders.
2. Select a Business Structure for Your Arkansas Company
Now that you’ve picked a good name for your brand, it’s time to start the legalization process. Before you begin the registration procedure, you must decide which company structure is appropriate for you. Each has its own set of perks, drawbacks, and tax advantages.
The sole proprietorship
A single proprietorship is the simplest straightforward business form. This informal corporation was created for entrepreneurs who do not want to work with others. It provides no personal asset protection and does not need state filing.
Unless you apply for an Arkansas DBA, your firm will function as a sole proprietorship under your surname. DBAs for sole proprietorships are filed with the county clerk offices where your firm does business. The Association of Arkansas Counties maintains a contact list for each of Arkansas’ 75 counties. DBA filing costs and renewal dates vary per county.
A general partnership, like a sole proprietorship, is an informal structure established for entrepreneurs who form a partnership with at least one other person. You and your partners’ surnames may be used for the firm, or you can get a DBA name. Profits and losses would be reported on your (and your partners’) personal tax return, and no personal assets would be protected.
Some partnerships (such as limited partnerships, limited liability partnerships, and limited liability limited partnerships) in Arkansas are required to submit formal documentation with the state, along with a filing fee.
If you do not intend to go public in the foreseeable future, a limited liability corporation (LLC) may be the best option. It provides more freedom and protects your personal assets in the case of a lawsuit.
The state of Arkansas requires all LLCs to choose a registered agent who will receive legal paperwork on the organization’s behalf. Your registered agent must be a qualified Arkansas resident or a company allowed to do business in Arkansas. Many new LLCs choose to use a registered agent service, which costs between $29 and $300 each year.
Arkansas also needs you to follow specific name rules and submit the Certificate of Organization, which contains important information about your business.
A corporation is a kind of business entity for those who have (or want to have) shareholders. So, if you want to go public in the future, this may be the greatest alternative for you.
Corporations, like LLCs, must designate a registered agent to receive paperwork, compliance papers, and government communication on the organization’s behalf. Your registered agent, like an LLC, might be a professional service, a corporate organization, or a person.
3. Determine whether your Arkansas business requires registration.
Once you’ve decided on your formal company structure and registered your new business name, you need check with your state to see what the criteria are for business registration. Each state has its own set of rules, which must be strictly followed.
Most informal company formations, such as sole proprietorships and general partnerships, do not need to be registered with the State of Arkansas. Check with your local government to discover whether your sole proprietorship or general partnership has to be registered at the county or municipal level.
Furthermore, certain firms (for example, sole proprietorships and single-member LLCs with no workers) are exempt from registering and filing for a Tax ID Number, also known as an Employer Identification Number (EIN), with the IRS. Even if this is not a necessity for your company, you should consider registering regardless since there are various legal and tax advantages.
Even though you are not compelled to register your firm, it is important to recognize that creating an LLC has several legal and financial advantages. Your business debts are considered personal debts if you are a single proprietorship or a partnership. This implies that in the case of a lawsuit, your personal assets might be taken. Personal protection is provided through LLCs, which legally shield your personal assets and minimize your personal liabilities.
Aside from personal protection, LLCs have various additional advantages, including:
Profit distribution, decision-making, and company management flexibility
“Flow-through” taxes permits the LLC’s revenue and costs to pass through to the owners’ personal income tax returns, with no limits on the number and type of owners.
If you don’t have the time or skills to organize your own LLC, there are a variety of trustworthy LLC filing services that may assist you. We analyzed and selected the five finest LLC registration services because we realize how difficult it can be to navigate through the thousands of accessible alternatives. Our LLC service review compares each to ensure you associate with a service that saves you both time and money.
4. Register Your Arkansas Business for Taxes
EINs are used by the IRS to identify firms for tax purposes. Every company with workers is obligated to have one.
Tax registration is an integral aspect of the Arkansas company registration procedure. Tax regulations differ based on the kind of your company and the county or counties in which you operate. Before applying, make sure you have your EIN.
All retail enterprises and many service firms in Arkansas must get a sales and use tax permit. Unless the firm receives $25 or less, taxes are paid monthly. You may be required to pay extra taxes, such as vehicle fuel tax and franchise tax, depending on the type of your firm.
Visit the Arkansas Department of Finance and Administration’s Sales and Use Tax FAQs and Income Tax websites for further information.
5. Obtain Arkansas Business Permits and Licenses
Before delivering any services, all new enterprises in the state of Arkansas are required to get the necessary permissions and licenses. A commission, state body, or organization is in charge of regulation. To establish your professional license requirements, go to the state’s website and look under Licensed Occupations.
Furthermore, certain businesses are governed by a federal agency and need federal licenses and/or permits. A liquor company, for example, would be subject to FDA standards and recommendations. Visit the Small Business Administration (SBA) website to learn more about federal permit requirements and costs.
We have created a business licensing search to help you determine your federal, state, and county license and permit obligations. To use this free guide, just choose your state from the dropdown menu and you will be led to a list of everything you need to consider when starting a company in Arkansas.