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How to Start a Business in Arkansas

Are you planning on starting a new business in Arkansas, but aren’t sure how to get started?

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CNBC reported in 2015 that Arkansas had the 4th lowest cost of doing business in the U.S. It also has a low cost of living, and several state incentives available for the new business owner. In recent years, more than 300 start-ups launched in Northwest Arkansas. Currently, The ARK Challenge has invested $2 million in private funding to support tech companies developing the region’s retail, food processing, and logistics industries. With a temperate four season climate, the beautiful Ozark Mountains, and a centralized location in the U.S., we think there are a lot of upsides to living and doing business in Arkansas!

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“How to Start a Business”

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General resources for starting a business in Arkansas

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Fun facts about starting a business in Arkansas

Famous business founded in Arkansas: Walmart

Walmart is a multinational retail corporation that operates a chain of hypermarkets, discount department stores and grocery stores. Walmart was founded and is headquartered in Bentonville, Arkansas. Walmart is the world’s largest company by revenue, as well as the biggest private employer in the world with 2.2 million employees.

Famous entrepreneur born in Arizona: John H. Johnson, founder of Ebony and Jet magazines.

John H. Johnson was born in Arkansas City, Arkansas. He founded Ebony and Jet magazines. Johnson was the first African-American to be named to the Forbes list of the 400 Richest Americans. On September 9, 1996, he was awarded the “Medal of Freedom” by President Clinton.

β€œIt’s better to get smart than to get mad. I try not to get so insulted that I will not take advantage of an opportunity to persuade people to change their minds.” — John H. Johnson

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Which type of legal structure is best for my business in Arkansas?

You must consider the tax, legal, and liability implications carefully before deciding on the best legal structure. At bizHUMM, we strongly recommend your incorporate.

Here are 5 helpful steps to determine the best legal structure:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Arkansas.
LLC (Limited Liability Company)
A limited liability company (LLC) is the United States-specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. An LLC is not a corporation; it is a legal form of a company that provides limited liability to its owners.

Steps to starting an LLC in Arkansas:

  • Step 1 β€” Name your LLC.
  • Step 2 β€” File an Articles of Organization.
  • Step 3 β€” Appoint a registered agent.
  • Step 4 β€” Prepare and sign an Operating Agreement.
  • Step 5 β€” Comply with necessary publication requirements.
  • Step 6 β€” Comply with other tax and regulatory requirements.
  • Step 7 β€” Pay your state tax.
  • Step 8 β€” Register foreign LLCs doing business in Arkansas.

For help forming your LLC in Arkansas we recommend CorpNet (they have fees for their service). Alternatively, visit the Arkansas Secretary of State website.

Other Arkansas resources for LLCs:

Secretary of State Business Name Database: Search for your LLC name here. Reserve your LLC name here

Arkansas Government Site: Search for every professional license that may be required of your business here. Search for any permits that may be required of your business here

Secretary of State Forms: File your Articles of Organization, and annual franchise tax report here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) number for your LLC. If your LLC has more than one member, even if it has no employees, you will need an EIN.

Arkansas Department of Finance and Administration: If you will be selling goods and collecting sales tax, or if you have employees, you’ll need to register with this site.

Sole Proprietorship
A sole proprietorship, also known simply as a proprietorship, is a type of business entity that is owned and run by one person, and in which there is no legal distinction between the owner and the business. The owner is in direct control of all elements and is legally accountable for all of the finances of such business.

Steps to starting Sole Proprietorship in Arkansas:

  • Step 1 β€” Choose a business name.
  • Step 2 β€” File an Assumed Name Certificate.
  • Step 3 β€” Get licenses, permits, and zoning clearance.
  • Step 4 β€” Obtain an Employer Identification Number (EIN).

For help forming your sole proprietorship in Arkansas we recommend CorpNet (they have fees for their service). Alternatively, visit the Arkansas Secretary of State website.

Other Arkansas resources for Sole Proprietorship:

Secretary of State Business Name Database: Search for your fictitious business name here. As a sole proprietor, you can use your own name or a fictitious one.

U.S. Patent & Trademark Office: Federal site for your business name search. Click on the β€œTESS” link.

Arkansas Government Site: Search for every professional license that may be required of your business.
Search for any permits that may be required of your business here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) number for your sole proprietorship here. It is required if you plan on hiring employees.

Arkansas Department of Finance and Administration: Register to pay taxes online here.

Partnership
A partnership is a legal form of business operation between two or more individuals who share management and profits. The federal government recognizes several types of partnerships. The two most common are general and limited partnerships. Each partner contributes to all aspects of the business and shares in the profits and losses of the business.

Steps to starting Partnership in Arkansas:

  • Step 1 β€” Choose a partnership name.
  • Step 2 β€” File a Certificate of Assumed Business Name.
  • Step 3 β€” Create a partnership agreement.
  • Step 4 β€” Obtain licenses, permits, and zoning clearance.
  • Step 5 β€” Get an Employer Identification Number (EIN).

For help forming your partnership in Arkansas we recommend CorpNet (they have fees for their service). Alternatively, visit the Arkansas Secretary of State website.

Other Arkansas resources for Partnership:

Secretary of State Business Name Database: Search for your fictitious business name here. As a partnership, you can use the surnames of the individual partners, or a fictitious business name.

U.S. Patent & Trademark Office: Federal site for your business name search. Click on the β€œTESS” link.

Arkansas Government Site: Search for every professional license that may be required of your business here.
Search for any permits that may be required of your business here.

IRS EIN Online: Apply for an EIN number for your business. All partnerships are required by law to obtain an EIN, whether or not you have employees.

Arkansas Department of Finance and Administration: Register to pay taxes online here. If you have employees, you must report and pay employment taxes periodically.

S Corporation
An S corporation is a regular corporation that has elected "S corporation" tax status. Forming an S corporation lets you enjoy the limited liability of a corporate shareholder, but pay income taxes as if you were a sole proprietor or a partner. In general, S corporations do not pay any federal income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

Steps to starting S Corporation in Arkansas:

  • Step 1 β€” Name your corporation.
  • Step 2 β€” Prepare and file Articles of Incorporation.
  • Step 3 β€” Appoint a registered agent.
  • Step 4 β€” Set up a corporate records book.
  • Step 5 β€” Prepare corporate bylaws.
  • Step 6 β€” Appoint initial corporate directors.
  • Step 7 β€” Hold your first Board of Directors meeting.
  • Step 8 β€” Issue stock.
  • Step 9 β€” Comply with Arkansas tax requirements.
  • Step 10 β€” Comply with other regulatory requirements.
  • Step 11 β€” Register foreign corporations doing business in Arkansas.

For help forming your S corporation in Arkansas we recommend CorpNet (they have fees for their service).
Or, visit the Arkansas Secretary of State website.

Other Arkansas resources for S Corporation:

Secretary of State Business Name Database: Search for your corporate name here. File your Annual Franchise Tax here.

Secretary of State Online Filing System: File your Application for Reservation of Corporate Name, and Articles of Incorporation here.

Arkansas Government Site: Search for every professional license that may be required of your business.
Search for any permits that may be required of your business here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) number for your corporation.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Arkansas Department of Finance and Administration: Register to pay taxes online here.

C Corporation
A C corporation (or C corp for short), refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. In a C corporation, there can be an unlimited number of stockholders. This allows the corporation to sell shares to a large amount of investors, which allows for more funds to be raised for projects.

Steps to starting C Corporation in Arkansas:

  • Step 1 β€” Choose a corporate name.
  • Step 2 β€” Prepare and file Articles of Incorporation.
  • Step 3 β€” Find a registered agent.
  • Step 4 β€” Set up a corporate records book.
  • Step 5 β€” Prepare corporate bylaws.
  • Step 6 β€” Appoint initial corporate directors.
  • Step 7 β€” Hold your first Board of Directors meeting.
  • Step 8 β€” Issue stock.
  • Step 9 β€” Comply with Arkansas tax requirements.
  • Step 10 β€” Comply with other regulatory requirements.
  • Step 11 β€” Register foreign corporations doing business in Arkansas.

For help forming your C corporation in Arkansas we recommend CorpNet (there are fees for their service).
Alternatively, you can visit the Arkansas Secretary of State website.

Other Arkansas resources for C Corporation:

Secretary of State Business Name Search: Search for the availability of your corporate name here.

Secretary of State Online Filing System: File your Articles of Incorporation here.

Arkansas Government Site: Search for every professional license that may be required of your business.
Search for any permits that may be required of your business here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your corporation here.

Arkansas Department of Finance and Administration: Register to pay taxes online here.

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Why choose Arkansas for my business?

  • 1

    Made in Arkansas
    A collection of tech startups made in Arkansas.

  • 2

    The AR Innovation Hub
    β€œThrough programs and partnerships, we are creating a collaborative ecosystem of innovation that will drive economic development β€” along with unique opportunities for hands-on training and experience at our new Innovation Center in the vibrant downtown Argenta Arts District.”

  • 3

    Innovate Arkansas
    β€œInnovate Arkansas has assisted more than 140 Arkansas technology ventures in accelerating their growth, resulting in more than $265 million in total investments raised, $226 million in revenue generated, and 600 new Arkansas jobs created.”

  • 4

    The ARK Challenge
    β€œ...a group of advisors, entrepreneurs, key cluster experts and investors interested in economic development through mentorship and acceleration of growing technology startups.”

  • 5

    Arkansas Small Business and Technology Center
    β€œThe Arkansas Small Business and Technology Development Center is a university-based economic development program that assists entrepreneurs, both new and seasoned.”

  • 6

    Small Business Grant Watch - Arkansas
    Grants to start or grow a small business including grants for women, minorities and veterans.

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