Why Start an AR Corporation?
The state of Arkansas offers an extensive list of business incentives, giving businesses in Arkansas a head start. Your corporation may be able to take advantage of these incentives, provided it meets qualifying criteria.
For example, the Create Rebate Program provides qualified businesses with a financial incentive equal to 3.9 to 5 percent of the annual payroll of new full-time permanent employees.
For a lot of entrepreneurs looking to start a larger business, an AR incorporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than a limited liability company (LLC). A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.
Is an LLC Better Than a Corporation?
It all depends on your business goals. For smaller businesses, limited liability companies are usually a better option. LLCs are easier to set up and receive many of the same benefits as corporations, but with less regulation. Learn more about forming an Arkansas LLC so you can decide which business entity is right for you.
Benefits of Forming an Arkansas C Corporation
It offers you numerous advantages including, but not limited to:
- The strongest form of liability protection possible by insulating your personal assets and finances from business debts, obligations, damages, bankruptcy or other liabilities
- Several options to create, buy, sell or transfer stock, including publicly
- The ability to issue more than one type of stock
- The ability to raise more funds by issuing more stock
- The ability to sell stock to investors inside and outside the U.S.
Benefits of Forming an Arkansas S Corporation
It offers several advantages similar to those provided by a C Corp including, but not limited to:
- Options for creating, transferring and selling stock, though not as many as a C Corp
- The capacity for up to 100 shareholders
- Simpler rules than those that apply to C Corporations
- Easy transfer of ownership simply by selling your stock
- The possibility of saving money by allowing you to pay less self-employment tax
In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the Secretary of State in Arkansas.
Start a Business in Arkansas Checklist
To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.
How to Form an AR Corporation Yourself in 6 Steps
Step 1 - Choose a Unique Business Name and Complete a State Business Search
Step 2 - Provide an Official Business Address for Your Corporation
Step 3 - Assign a Registered Agent
Step 4 - File Your Articles of Incorporation with the Arkansas Secretary of State
Step 5 - Get an Employer Identification Number (EIN) from the Internal Revenue Service
Step 6 - Write Your Bylaws
1
Choose a Unique Business Name and Complete a State Business Search
Every Arkansas business must have a unique name that isn't already in use by another business in the state. If you’re having difficulty thinking of a name, try using our Business Name Generator to gather ideas. You'll need to follow a few naming rules, which you can read about in detail on the Arkansas Corporation Names page.
Once you’ve chosen a name, you’ll need to make sure it’s available in Arkansas. To see whether another company in the state is using your desired business name, use our tool to do an Arkansas entity search. Or, you can also carry out a name search on the state's website.
2
Provide an Official Business Address for Your Corporation
All AR corporations must have a designated address. It could be your home address (if you’re running the company out of your house), a building where your office is located or any physical address of your choice. The address can be outside the state of Arkansas and can be a P.O. Box.
You may also be able to use a virtual mailbox for your business address. This can be especially helpful if you run a home-based business and don't want your home address published as part of your business public record.
3
Assign a Registered Agent
Someone who receives official correspondence and is responsible for filing reports with the Arkansas Secretary of State is known as a Registered Agent. Every Arkansas corporation is required to have a Registered Agent.
You may fill this position yourself, assign another manager in your business or use a Registered Agent service. If your Registered Agent in Arkansas is a person, they must have a physical street address in Arkansas and must be available during business hours to receive important documents on behalf of your company. You'll appoint your Registered Agent when you file your Articles of Incorporation with the Secretary of State and formally create your corporation.
All of Incfile’s business formation packages include Registered Agent service. It’s free for the first year and just $119 per year after that. You can also access a digital dashboard to view any document we've received on your behalf.
4
File Your Articles of Incorporation with the Arkansas Secretary of State
Once you've gathered all the information for your corporation, you’ll need to file your Articles of Incorporation with the Secretary of State.
This will officially create your business. Here’s what is typically included:
- Your business name
- The corporation’s capital structure (number of shares to be issued)
- Registered Agent's name and address
- Name and address of each incorporator
- The name and title of at least one corporate officer (for franchise tax purposes)
- Your corporation's purpose
- Signature of authorizing officer
If you wish, your Articles of Incorporation may be filed online via the state's online filing system. You can also mail the form to the Secretary of State, deliver it in-person or Incfile can file it on your behalf.
File by Mail
Arkansas Secretary of State
1401 W. Capitol
Suite 250
Little Rock, AR 72201
You only need to file your Articles of Incorporation in Arkansas once, but once a year thereafter by May 1, you'll also need to file an annual corporation franchise tax report with the Secretary of State in AR. Incfile can remind you about this every year, or we can do it for you if you have us handle the paperwork.
What are the fees and requirements to incorporate in Arkansas?
| State Fee | State Filing Time | Expedited Filing Time |
| $45 | 3 Weeks | 7 Business Days |
| State Fee | $45 | |
| State Filing Time | 3 Weeks | |
| Expedited Filing Time | 7 Business Days |
Annual Report
Frequency
Annually
Due Date
May 1st
Filling Fee
$150
Note
Initial report due May 1st of the year following formation or qualification
5
Get an Employer Identification Number (EIN) from the Internal Revenue Service
You'll need an EIN to identify your business to the IRS. You use this number for filing and paying taxes, submitting payroll information and payments for your employees and opening a business bank account. You can obtain one directly from the IRS, or Incfile can get one for you as part of the AR corporation creation process.
6
Write Bylaws
A set of rules that govern how a corporation will be run, bylaws detail how many directors the corporation will have, whether the board of directors will have annual meetings and what the voting requirements will be, among other things.
Some states, including Arkansas, legally require companies to create bylaws. You won't however need to file your bylaws with the Secretary of State. Simply keep them with your other business records.
It's always a good idea to write and follow bylaws to protect your business from any future changes and events.
Types of AR Corporations
C Corporation
When you file to start a corporation, by default, it's a C Corp. This is the choice for large businesses that will trade shares in the stock market.
An Arkansas C Corporation will offer you several liability protections, but it will also be required to adhere to numerous strict rules and regulations. It will also likely have a substantial amount of administrative overhead, and won't enjoy as many tax advantages as other corporation types.
Learn more about C Corporations.
S Corporation
Technically, an S Corporation isn't a business entity the way LLCs and C Corporations are. It's a tax filing status. An LLC or a C Corporation can be an S Corporation. It's just a matter of filing a form with the IRS.
The main reason to file as an S Corp is to save money on self-employment taxes. To get an idea of how much money you might save, use our S Corp Tax Calculator.
If you want your Arkansas C Corporation to be treated as an Arkansas S Corporation, file the IRS Election by a Small Business Corporation form, also known as Form 2553 or an S Corp Election form.
Consult with your tax advisor or accountant to determine whether this is your best option.
Learn more about S Corporations.
Compare S Corp vs. C Corp to learn the benefits and drawbacks of both, and decide which one will best suit your needs.
Professional Corporation
Some states, including Arkansas, allow certain occupations that provide professional services to form Professional Corporations. The Arkansas Professional Corporation Act, Title 4, Subtitle 3, Chapter 29, Subchapter 2, § 4-29-202 defines a Professional Service in Arkansas as:
"...any type of professional service which may be legally performed only pursuant to a license or other legal personal authorization."
AR Code, § 4-29-202 also specifies a few of the professions permitted to form a Professional Corporation in Arkansas, which include, but may not be limited to:
- Certified public accountants
- Architects
- Engineers
- Dentists
- Doctors
- Attorneys-at-law
Check with the AR Secretary of State to confirm whether your business should and can be a Professional Corporation.
Foreign Corporation
If your business operates in another state and you want to expand into Arkansas — or vice versa — you’ll need to form a Foreign Corporation.
Learn more about Arkansas Foreign Corporation registration.
Nonprofit Corporation
Charitable organizations can incorporate as nonprofit corporations. This means all the profits they generate are donated to the organization supported by the charity, minus administrative costs.
A nonprofit corporation is also exempt from federal and state taxes, allowing more of the profit to benefit the charity.
Note: Everything in this guide applies to for-profit corporations, and mostly to C Corps and S Corps. Items listed as requirements for forming a corporation may or may not also apply to nonprofits.
Limited Liability Company
Depending on the size of business you want to start, or your personal circumstances and goals, an LLC may be a better option. For example, you may only want to build a small business that you yourself will run with just a few employees and you may not need the options to buy and sell stock.
An Arkansas LLC is usually a better option for a smaller business. It's easier to set up, but it still offers you certain advantages you'd get from a corporation. You can even have your LLC treated as an S Corporation for tax purposes to save you money.
Regardless of which route you decide to go, we can help you with your Arkansas business registration.
Learn more about limited liability companies.
Sole Proprietorship or Partnership
Because there's no real setup to do with sole proprietorships, these are considered the simplest types of businesses to set up. If you don't choose to form a separate business entity, by default, you'll have either a sole proprietorship (just you) or a partnership (you and one or more other people).
Neither of these options provide you with any special benefits or liability protections and can leave your personal assets vulnerable. For these reasons, we don't recommend them.
Compare business entity types to decide which one is best for you.
Helpful Resources from the State of Arkansas
More Information in This Guide
You’ll find plenty more insight and guidance on the other pages of this guide, including:
How to search the state business registry and find the right name. Includes information on naming rules, fictitious names, reserving names for AR corporations and more.
How to appoint, change and search for Registered Agents. Also includes the duties they fulfill and the rules they’re required to follow.
Details the various fees you’ll need to pay and the state and federal requirements you’ll need to meet. Includes details about Employer Identification Numbers (EINs), state and federal business licenses, annual corporation franchise tax reports and more.
Covers the various taxes you’ll have to pay to the state and federal governments. Includes details about state taxes such as income and sales, and federal taxes such as income and self-employment.
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