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Costs & Fees to Form and Operate an LLC in Arkansas

How much does an LLC cost in Arkansas?

Written by Nikki Winston – CPA, updated on

A new business always means extra expenditure.

From state fees for incorporating a legal entity to extra spending on professional services, your bill can quickly run out of control without proper budgeting.

In this guide, we break down all the LLC formation costs in Arkansas and extra fees for business licenses, taxes, and other operational must-haves.

Arkansas LLC formation cost: $45/$50

To create an Arkansas LLC, you must file a Certificate of Organization with the Secretary of State.

Filing fees are:

  • $45 for online submissions
  • $50 for mailed-in forms

If you formed a business entity in another state but plan to do business in Arkansas, you’ll need to register as a foreign LLC.

Complete a Certificate of Registration for a Limited Liability Company and submit it with a Certificate of Good Standing from your home state.

Filing fees for foreign LLCs in Arkansas are

  • $270 for online filings
  • $300 for mailed applications
Arkansas laws recognize Series LLC. The formation cost is the same as for regular LLCs.

Online filings are processed faster than mailed applications, and it’s also cheaper. The Arkansas Secretary of State doesn’t offer any expedited services.

Extra Arkansas LLC costs to account for

Apart from paying the filing fee for Articles of Organization (Certificate of Formation), you may face other optional state fees.

On top, you should also budget for business licensing costs and taxes. These can add up if you operate in specific locations or industries.

Finally, you may always want to pay a professional to get accounting, compliance, or legal advice.

Below, we model optional LLC formations you may face.

Registered agent costs: vary

The Arkansas Secretary of State requires every LLC to have a registered agent.

A registered agent acts as the main point of contact for your business. State correspondence, tax notices, and service of process of legal documents will arrive at your registered office address.

Registered agents must have a physical address in Arkansas. A P.O. box cannot be listed as an address for your business.

You can be your own registered agent for free. Since you need to be always available during business hours, this will take more of your time.

So many business owners choose to hire a professional registered agent service instead. In this case, you list the provider’s office address as your LLC’s registered office. The company handles all correspondence on your behalf (including service of process) and notifies you about important documents.

Registered agent service providers in Arkansas charge about $100/year on average.

Registered agent state fees

Arkansas doesn’t charge fees for appointing a registered agent. You name your agent on your LLC Certificate of Formation.

However, if your registered agent changes, you must notify the Arkansas Secretary of State. You can do this online at no charge.

Trade name registration: $22.50 /$25

You can register a trade name if you want to operate your business under a name other than the LLC’s legal name.

In Arkansas, this name is called “fictitious name.” Others use the term “DBA” or “assumed name.”

To register a DBA in Arkansas, you’ll have to complete form DN-18 and file it with the county clerk (not the Secretary of State).

The fee is $22.50 if you file online and $25 by mail.

Arkansas LLC name reservation: $22.50 /$25

You can reserve a name for your LLC if you aren’t ready to file the paperwork.

To do so, check if your business name is available using the state name search tool. Your LLC name must not infringe on another company’s name. That is different from the names of other registered businesses.

If the name isn’t taken, complete Form RN-06 to reserve it for 120 days.

The name reservation fee is $22.50. Or $25 if you file by mail.

Certified document copies: costs vary

If you need an extra copy of any company formation document, the Arkansas Secretary of State will provide it.

Tax records and copies of business documents cost $0.50 per page plus $5 if the copies need to be certified. A Certificate of Good Standing is $25 plus a $3 fee to process online.

If you pay by credit card, there’s an extra 4% fee plus $2.50, which also applies to mailed requests.

LLC formation documents for a domestic LLC in Arkansas
LLC formation documents for a domestic LLC in Arkansas. Source: Arkansas Secretary of State.

Business permits and licenses: costs vary

Depending on the industry you operate in, you may need permits and business licenses for your LLC.

Professional service providers such as cosmetologists, accountants, and real estate agents need a valid occupational license. And so do operators in other industries.

For example, a roofer’s licensing fee is $20. A massage therapist’s license costs over $200, and an insurance adjuster pays $140 for a license and an extra $240 if it’s renewed late.

The Arkansas Division of Workforce Services has a list of occupations requiring a license. They also direct you towards the correct licensing agency to apply to.

If your business will sell taxable goods and services, you must also apply for a seller’s permit. To get one, visit Arkansas Taxpayer Access Point. The permit application fee is $50.

Though Arkansas doesn’t have a general business license statewide, some cities may request extra registrations.

For example, all new businesses in the City of Little Rock must apply for a license with the local authorities.

Does Arkansas have an annual LLC fee?

Yes, LLCs in Arkansas must pay an annual minimum franchise tax of $150 for doing business in the state. The deadline is May 1st each year. But you don’t need to file an annual report and pay another fee for that.

Also, Arkansas LLCs (and other business entities) must file an annual business property assessment by May 31st and pay a progressive tax.

The statute is 20% of the current market value of commercial vehicles, furniture, non-leased equipment, and inventory.

What taxes do LLCs pay in Arkansas?

LLCs in Arkansas are subject to several types of taxes:

  • Annual franchise tax
  • Sales and use tax
  • Employment taxes

Depending on your industry, you may also be subject to other business taxes. Rates vary by county or locality. If you operate in multiple counties, this can become costly.

You can use the Local Tax Rate Lookup tool from the Arkansas Department of Finance and Administration to determine your obligations.

Franchise tax

An Arkansas LLC must file an annual franchise tax report. It’s due by May 1st of each year. For LLCs, the fee is a flat $150. The tax is due each year as long as your LLC is active with the Arkansas SOS.

Sales tax

Businesses with physical retail locations and those selling taxable services must register for a sales tax permit. This requirement also applies to businesses that have created a sales tax nexus with Arkansas.

The state-wide sales tax rate is 6.5%. However, Arkansas also lets local tax jurisdictions impose different tax rates. The average local rate is an additional 2.636%.

Employment taxes

If your Arkansas business will have employees, you’ll have to pay payroll taxes to the state as an employer. Employer withholding rates vary depending on the worker’s compensation. You are also obliged to pay for Unemployment Insurance.

Conclusion: How much does an LLC cost in Arkansas?

In Arkansas you can start an LLC for just $45. The fee covers the cost of the formation process and filing documents with the Arkansas Secretary of State. But operating an LLC in Arkansas is rather expensive.

You can save about $100 by being your own registered agent, which will help offset the $150 annual franchise tax fee that all limited liability companies must pay. You’ll spend a few more dollars if you need certified copies of your LLC filings.

There are also several variable costs, depending on your business.

For specialized industries, you’ll have to pay licensing and permit fees. This could be from $20 to several hundred plus renewal costs. State, local, and employment taxes vary depending on how much money your LLC makes.

Nikki Winston, CPA

Article by:

Nikki Winston

CPA

Nikki Winston is a CPA who enjoys writing about accounting, tax, personal finance, and career advice. Catch Nikki on Twitter @NikkWinstonCPA.

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