Creating a Limited Liability Company (LLC) in Arkansas is a process that involves several important steps that must comply with the state’s LLC Act. Below is a detailed step-by-step guide on how to establish an LLC in Arkansas:
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STEP 1: Choose a Name for Your Arkansas LLC
Choose a unique name that’s not already in use by another business entity in Arkansas. The name must include the phrase “Limited Liability Company,” or its abbreviations “LLC” or “L.L.C.”
You can check the availability of your desired name by using the Arkansas Secretary of State’s business entity search: Arkansas SOS Business Search
If desired, you can reserve your LLC name for 120 days by filing an Application for Reservation of a Business Entity Name and paying the required fee.
Time it Takes to name a Arkansas LLC
Researching and deciding on a name: 1-2 hours
If opting for a name reservation: The act of filing can take about 10-15 minutes.
If opting for a name reservation: Filing can take minutes, but approval might take a few days to a week.
STEP 2: Appoint a Registered Agent
Appoint a registered agent for your LLC who will accept legal documents on behalf of your business. This can be an individual resident of Arkansas or a company that’s authorized to conduct business in the state.
The agent must have a physical street address in Arkansas.
Time it Takes to be a Registered Agent
Registered Agents MUST BE at the Business Address everyday during business hours. This is why Home Addresses Are Not Accepted.
If you already have someone in mind (like an attorney or a service), this can be quick. If you need to find and appoint a registered agent: 1-3 hours.
Why use Inc Authority vs Being your own Registered Agent?
Benefits of having Inc Authority serve as your Registered Agent include:
· Privacy: Keep your home address private
· Efficiency: Easily receive and promptly process state and legal documents
· Hassle-free: Reduction of junk and solicitation mail
· Legal Compliance: Avoid fines, penalties, and possible dissolution
· Convenience: Serves as your public & legal business address
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STEP 3: File Articles of Organization
To register your LLC, you must file Articles of Organization with the Arkansas Secretary of State. This can be done online or by mail.
Information required includes your LLC’s name, the registered agent’s name and address, the LLC’s management structure (member-managed or manager-managed), the duration of the LLC (if not perpetual), and the organizer’s name and signature.
There is a filing fee, which varies depending on whether you file online or by mail. Always check the Arkansas Secretary of State’s website for the most current fee structure.
Time it takes to write the Articles of Organization
Preparing the document: 1-2 hours
Filing online: 30 minutes to 1 hour.
Waiting for confirmation/approval: This can range widely, but typically, online filings can be processed in a few days to a couple of weeks.
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STEP 4: Create an Operating Agreement
Although not required by Arkansas law, it is highly advisable to create an operating agreement to establish the operating rules for your LLC. This agreement doesn’t need to be filed with the state and is for internal use.
Time it takes to write an Operating Agreement
If using a template and making minimal changes: 1-3 hours
If drafting from scratch or having extensive negotiations among members: Several days to weeks.
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STEP 5: Obtain an Employer Identification Number (EIN)
Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes.
You can apply for an EIN online at no cost through the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
The EIN will be used for tax filings, opening bank accounts, and hiring employees.
Time it takes to get an EIN / Tax ID
Filling out the online form and receiving the EIN: Approximately 0.5 to 1 hour (the online process is relatively quick if there are no complications).
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SO HOW MUCH TIME WILL IT TAKE TO FORM AN LLC MYSELF? DO IT MYSELF (DIY) an LLC?
Total Time Investment (Minimum): 5 hours (if you exclude the higher range estimates and name reservation)
Total Time Investment (Maximum): 11.5 hours (if you include the higher range estimates and name reservation)
This gives a ballpark range of 5 to 11.5 working hours for an individual, excluding all waiting times. It’s worth noting that these times can vary based on the person’s familiarity with the processes and any specific details or challenges related to the business being set up.