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Business Information & Rankings

• Arkansas ranks 1st in Business Climate for States in the South (Southern Business and Development)
• Arkansas has the lowest cost of doing business of all Southern States. Business Facilities)
• Arkansas is home to five top Fortune 500 companies including Alltel, Dillard?s, Murphy Oil, Tyson Foods and Wal-Mart. In all, 112 Fortune 500 companies have more than 310 facilities in Arkansas.

Cost of Living Index

Crime Rate

Arkansas is ranked 29th in crime. (FBI, 2003)

Fees & Taxes

Business Inventory Tax
Arkansas does tax business inventory which is assessed on an average value.

Corporate Franchise Tax
Arkansas charges an annual franchise tax. No corporation is expected to pay a tax of less than $59 or more than $1,075,000.

Corporate Income Tax
Corporations are subject to tax on net income at the rates listed below. The portion of income that exceeds each category is taxed at the next higher rate.

Personal Income Tax
Varies starting at 1% for the first $2,999 up to7% for income over 25,000.

Personal Property Tax
Taxable. The State does not have a property tax; however, some counties do collect property tax for revenue generating purposes.

State Sales and Use Tax
Base Rate: 5.125%
Machinery Rate: None

Exemption – machinery and equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging articles of commerce at Arkansas manufacturing or processing plants or facilities.

Unemployment Insurance
Arkansas’ new employers’ tax rate is 3.6% for 3 years.

There has been a surge in Incorporation in Arkansas of late and there are several factors that are contribute to the surge. The convenient geography, abundance of natural resources, a positive business climate, availability of strong workforce, and low cost of living are some of the key factors that make Arkansas an extremely alluring destination for setting up a new business.

According to a survey conducted by U.S. Small Business Administration, 240,123 small businesses were formed in the state in 2015 and that constitutes 96.6% of Arkansas businesses. Company Incorporation in Arkansas increased in 2016 with the number of small businesses in the state pegged at 244,977 business entities that constitutes 99.3% of Arkansas businesses.

Why Choose Arkansas for Incorporation?

Should you set up a company in Arkansas? Yes! Because there are a large number of Fortune 500 companies headquartered in Arkansas and this is solely because the state provides a business climate that is extremely favorable. There are several salient benefits for small and medium sized businesses (SMEs) and some of them are:

Tax Competitiveness

One of the highlights of company incorporation in Arkansas is tax competitiveness the state provides to business entities. Some of the key benefits for businesses include:

• One of the lowest local property taxes
• Budgeting through the Revenue Stabilization Act (RSA)
• Working on comprehensive tax reforms
• Road to improvement in corporate income tax structure

Arkansas High Impact Non-Tax Incentives

One of the reasons behind successful incorporation in Arkansas is the number of non-tax incentives, the state provides to business entities. Some of the salient incentives include:

Quick Action Closing Fund

It is a discretionary deal closing fund initiated by the state of Arkansas and this ensures grant funds are made available to businesses that are planning to establish competitive high-impact projects. This fund can be provided directly to a business entity.

Create Rebate Program

This program is being offered by Arkansas Economic Development Commission (AEDC) for competitive projects. The Create Rebate program can provide businesses with almost 5% payroll rebate

How do you Incorporate in Arkansas?

Company incorporation in Arkansas has been fuelled by a number of factors including benefits that business entities can derive from in the state, incentive programs, favorable tax climate, and strong budget for economic development programs. The question is whether the process of business registration in Arkansas is easy or difficult.

Let’s take a look at the step by step procedure towards Incorporation in Arkansas

• Type of Business: There is a wide variety of businesses that you can establish in the state. You can set up a company in Arkansas with ease and the type of businesses to choose from includes Partnership, Sole Proprietorship, General Partnership (GP), Limited Partnership (LP), Limited Liability Partnership (LLP), Limited Liability Limited Partnership (LLLP), Limited Liability Company (LLC), Corporation, Nonprofit Corporation, S Corporation, and Benefit Corporation. It is important to identify in advance the type of business you want to set up in Arkansas.
• Business Entity Name: The business entity naming process is as important as company incorporation in Arkansas or registration of business process. According to 2015 Arkansas Code, § 4-33-401, you have to ensure the name of your Arkansas Corporation contains the words “corporation”, “incorporated” or an abbreviation like “inc.” or “corp.” You have to not only identify a name but also ensure it is not in use. You can search the name database of Arkansas Secretary of State.
  To ensure company incorporation in Arkansas, you will have to reserve or register the chosen business name online or by downloading name reservation form, in accordance to AR Code § 4-33-403 (2015).
• Registered Agent: In accordance to 2010 Arkansas Code, § 4-28-214, a corporation is required to maintain a registered agent in the state. There are different types of services, a registered agent provides including initiating incorporation in Arkansas. As one of the top registered agents in Arkansas, incparadise.net, can also receive any and all legal business related paperwork on your behalf.
• Articles of Incorporation or Certificate of Authority: You can form a domestic or foreign Arkansas Corporation. In case of domestic Corporation, you will be required to fill out and submit the ” Articles of Incorporation” (DN-01 form) in accordance to the small business entity tax pass through act 1003 of 1993 and Arkansas Code Annotated § 4-27-202. If you want to form a foreign LLC then you need to submit the application for ” Certificate of Authority” (F-01 form) in accordance to the provisions of Act 958 of 1987 and Arkansas Code Annotated § 4-27-1503. We can always file on your behalf through the standard process online or through an expedited process.

As a part of the process of company incorporation in Arkansas, we will ensure, you receive a Certified Copy verifying the state of Arkansas has filed as well as formed your corporation.

Costs and Fees associated with Arkansas Incorporation

What would it cost to set up a company in Arkansas?

Check Fees here!

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What makes Arkansas a great place to start your business? A state that is known for its infrastructure and transport, the overall business environment is supported by a range of incentives and grant programs. As a result of these incentives and grand programs, whether you are an LLC startup company in Arkansas or a corporation, the path to business freedom and flexibility is guaranteed!

Business Growth Incentive for New Businesses

As one of the top registered agents in the state, we can help you register a new business in Arkansas and this is so that your business entity can capitalize on the several benefits, incentives, and advantages the state has to offer. These will ensure long term growth and profitability for corporations, LLCs, partnerships etc. Let’s take a quick look at what makes Arkansas a good business destination:

Advantage#1: Salient benefits of Corporation or LLC formation

Corporation

• Limited Liability: The shareholders in an Arkansas C Corporation will enjoy limited liability where the corporation’s debts are concerned. They will also be protected from any judgments made against the corporations.
• S Corporation status: At any given point in time, you can convert from a C Corporation to S Corporation status through a proper process. This election will enable a startup company in Arkansas to be taxed in a similar way as a partnership.
• Long life: When you register a new company in Arkansas as an S Corporation, one of the advantages is the independent life the corporation will enjoy. The corporation will continue operation even after the death of stockholders.

LLC

• Limited Liability: As an owner of an LLC, you will be able to enjoy limited liability protection similar to what a corporation enjoys.
• Flexible Profit Distribution: An LLC has the benefit of being able to select different forms of distribution of profits
• No Minutes of meetings: Unlike a corporation, an LLC startup company in Arkansas will not be required to maintain any minutes of the meetings or resolutions.
• Flow through Taxation: When you register a new company in Arkansas, an LLC can benefit from the process of flow through taxation that will ensure there are no double taxations.

Advantage#2: Tax Credits

If you register a new business in Arkansas, you will be able to benefit from a variety of tax credits applicable to your specific business. Some of them include:

• Advantage Arkansas: This is a type of “Income Tax Credit” program that provides a startup company in Arkansas with corporate income tax credits, new full-time jobs are created. The annual credit can be as much as 4% for new employee payroll and can be claimed for a period of 5 years. If your business has unused credits then they can be carried forward for a maximum period of 9 years.
• ArkPlus: This is also a type of “Income Tax Credit” program wherein the state corporate income tax credit is equal to 10% of the total investment made in an expansion project for a specific business. Your startup company in Arkansas will qualify only when it meets specific employee payroll and investment requirements. If your business has unused credits then they can be carried forward for a maximum period of 9 years.
• InvestArk: This is also a type of “Sales and Use Tax Credit” program where your startup company in Arkansas will qualify only if it has been operating from the state for a period of at least 2 years. This is a non-transferable and non-refundable tax credit, which is equal to 7% of all eligible project expenditures. If your business has unused credits then they can be carried forward for a maximum period of 9 years.

Several grants or loans, tax refunds, and tax exemption programs have also been created to ensure businesses can benefit from them. Apart from these, when you register a new business in Arkansas, you can take advantage of incentives offered by the county or city that you operate from.

Are there any Disadvantages of Incorporating in Arkansas?

Wondering whether there are any challenges that you will encounter when you register a new company in Arkansas? There are a few and the most prominent amongst them is the “franchise tax”, which is a little on the higher side. Limited Liability Companies and Corporations have to pay franchise tax annually in accordance to Arkansas Code 26-54-104. With the exception of franchise tax, the state of Arkansas offers several advantages to businesses in terms of strong economy, flexible business climate, and tax incentives.

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Is it a good business decision to form an Arkansas business? The state offers strong transportation network to businesses as well as reliable and qualified workforce, and is considered by CNBC as the 20th best state for business. It is a state that has one of the lowest cost of doing business and an extremely friendly regulatory environment.

According to a 2018 report by U.S. Small Business Administration, there are 247,018 small businesses established in the state. They account for 99.3% of all Arkansas businesses. Domestic as well as foreign company formation in Arkansas is allowed and the most successful industries vary from Retail Trade to Arts, Entertainment, and Recreation, Mining, Quarrying, and Oil and Gas Extraction, Educational Services, Manufacturing, and Real Estate among others.

Are you ready for company formation in Arkansas?

How to: Arkansas LLC Registration and Formation

It was in 1993 when “The Small Business Entity Tax Pass Through” Act was passed to authorize the formation of limited liability companies (LLCs) in Arkansas. The procedure for registration and formation of an LLC in the state is as follows:

Step#1: Hire a registered agent

If you are planning to form an LLC, you will be required to designate and maintain a registered agent in accordance to 2010 Arkansas Code, § 4-20-101 – § 4-20-105 and § 4-20-113. The agent could be a foreign or domestic entity and should have the authorization for transacting business in the state of Arkansas. We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 company formations in Arkansas.

We are in compliance with all regulations in the State of Arkansas.

Step#2: Choose LLC Name

LLC company formation in Arkansas is regulated through foreign LLC and domestic LLC laws. According to the 2010 Arkansas Code, § 4-32-1004, a foreign LLC will not be issued a Certificate of Registration unless it satisfies the requirements mentioned in § 4-32-103. You have to also ensure, the name of your LLC contains words like “Limited Liability Company” or abbreviations like “LLC” or “L.L.C.”

How would you know that the name chosen by you is unique? In order to find out, you can conduct a name search here.

Step#3: Articles of Organization and Certificate of Registration

LLC company formation in Arkansas is possible only after you have registered your LLC name. The documentation for domestic LLC differs from that of foreign LLC. If you are registering a domestic LLC then you will be required to submit “Articles of Organization” (LL-01) and if you are registering a foreign LLC then an application for “Certificate of Registration” (FL-01) needs to be submitted. These documents can be mailed or hand delivered to the office of Arkansas Secretary of State.

Should you have any questions, feel free to call us on 702-871-8678.

Arkansas Corporation Registration and Formation

If you are planning to form a Corporation in Arkansas then the procedure for registration and formation is as follows:

Step#1: Hire a registered agent

If you are planning to incorporate, you will be required to designate and maintain a registered agent in accordance to 2010 Arkansas Code, § 4-20-101 – § 4-20-105 and § 4-20-113. The agent could be a foreign or domestic entity and should have the authorization for transacting business in the state of Arkansas. We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 company formations in Arkansas.

We are in compliance with all regulations in the State of Arkansas.

Step#2: Name Reservation

If you are planning to form a Corporation in Arkansas, then the first step is to identify a name for your business and register it. According to 2010 Arkansas Code, § 4-26-402, you can reserve a corporation name for both foreign and domestic businesses. The name can be reserved through a written application filed with the Secretary of State. You can reserve a name for a period of 6 months. You need to also ensure the chosen name contains words like “Incorporated” or “corporation” or abbreviations like “Inc.,” or “Corp.”

How would you know that the name chosen by you is unique? In order to find out, you can conduct a name search here.

Step#3: Articles of Incorporation and Certificate of Authority

Once you have reserved or registered a name, you will be eligible to form a Corporation in Arkansas. You can form a domestic or a foreign corporation. If you are registering a domestic corporation then you will be required to submit “Articles of Incorporation” (DN-01) and if you are registering a foreign LLC then an application for “Certificate of Authority” (F-01) needs to be submitted. These documents can be mailed or hand delivered to the office of Arkansas Secretary of State.

If you have any questions regarding how to form an Arkansas business, you can simply visit the Arkansas Business formation page.

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Is a business license in Arkansas mandatory? If you are planning to start a business in the state of Arkansas then you might need to apply for a license or permit but not all types of businesses require the same. It is important to note that depending on the type of license or permit required, you will have to get it issued from state agencies handling licenses specific to industries. For example, a license for Restaurant and Food Services can only be issued by the “Division of Environmental Health Protection” under Arkansas Department of Health.

Business License in Arkansas

Where do you begin? The first step is to verify or ensure the type of business you have chosen and the location of operation, which is city or county, and whether you are complying with local zoning regulations or not. It is important to note that zoning laws vary from one county or city to another.

Once the zoning compliance is complete, you are ready to apply for an Arkansas company license. It is important to identify the type of business or industry you will be focusing on, as the type of license your business requires will vary according to the industry. Here are some tips that will be helpful:

• There are some cities as well as counties that are not involved in issuance of a business license and in such a scenario; you will be required to obtain the same from the state department.
• It is mandatory that you apply for a business or professional license in the city where your business is physically located. If the physical location of your business is outside of the city limits then you can contact the clerk’s office or county collector office to obtain the necessary license.
• The type of business being conducted will also define the need for any additional license as well as fee.
  For example: If you are planning to set up a restaurant that serves food as well as liquor then you will be required to obtain a business license in Arkansas for “Restaurant and Food Services” and also an additional permit to serve alcohol. The fees and issuing authority is different for the license and permit in this case
• The fee for a business license can vary from $50 to $1,000 or more depending on the type of business and amount of inventory.
• You will be required to renew an Arkansas company license annually and failure to do so will be treated as a Class A misdemeanor as well as a separate violation according to Arkansas Code § 26-18-206. You can be fined and your business can be revoked.

How to get a Business license

The type of Arkansas company license your business requires will depend on the type of business you are involved in. Let’s take a look at some examples to understand this better.

Fort Smith

If you are planning to start a restaurant business with the possibility of serving alcohol in Fort Smith, Arkansas then what type of business license would you require?

• General Business License for Fort Smith: You will be required to obtain a general business license and the fee for that is $100 for all businesses except new businesses in their first year.
• Permit to sell food: You will require a “Food Service Permit” from the Arkansas Department of Health, Environmental Health. You can download the permit or apply online.
• Alcohol Permit: You will be required to apply for a business license or permit to serve alcohol in the restaurant premises. You will have to apply to the Arkansas Department of Finance and Administration, Alcoholic Beverage Control Division. You can download the form and submit it along with the required fee. The fee for that can vary from $40 to $1,000. You would also require a federal occupational tax of $250 approximately.

Similarly, other types of businesses will require different business license in Arkansas and may also require permits.

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