An Arkansas LLC Operating Agreement transcribes a constructed archive to designate a concrete understanding of how a company will proceed with operations. The form serves to clarify intentions related to rules and procedures of handling business management and attending to future adjustments to functional approaches. LLCs can have one or multiple members or managers, and the provided agreement can be helpful in legally signifying the declaration of each member’s investment and stake in the business. Several other clauses can be fine-tuned to confirm the rights and responsibilities of those involved and set forth a plan should a member decide to sell their interest in the company. The Arkansas government does not require operating agreements to institute an LLC’s active formation, but it is highly recommended.
Laws
LLC Statutes – Arkansas Uniform Limited Liability Company Act (§ 4-38-101 – 4-38-1203)
Operating Agreements – § 4-38-105
Definitions – “Operating Agreement” means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in § 4-38-105(a). The term includes the agreement as amended or restated (§ 4-38-102(13)).
Formation – § 4-38-201
By Type (2)
Multi-Member LLC Operating Agreement – Allows LLCs controlled by more than one individual to establish a complete overview of expectations regarding how the company will be governed.
Download: Adobe PDF, MS Word (.docx)
Single-Member LLC Operating Agreement – An outline to confirm company regulations and defined approaches concerning an LLC owned and run by a single member.
Download: Adobe PDF, MS Word (.docx)
Create an LLC in Arkansas (5 Steps)
While there are several different types of businesses that can be formed, establishing a limited liability company can be an advisable option because of extended legal protections and potential tax benefits. To take advantage of these benefits, owning individuals of a company can seek to legally form an LLC in Arkansas by carrying out the listing of actions recorded below.
- Step 1 – Secure a Bussiness Name
- Step 2 – Assign a Registered Agent
- Step 3 – File a Certificate of Organization/Registration
- Step 4 – Finalize an Operating Agreement
- Step 5 – Perform Other Required Tasks Related to the LLC
Step 1 – Secure a Name for the Business
The initial performance needed to create a limited liability company in Arkansas will be to reserve a name for the company with the AR Secretary of State. The selected name must be different from any business names actively established with the state and must adhere to the permitted names section set forth by the Uniform Limited Liability Act (§ 4-38-112). A search can be performed using the Secretary of State’s Entity Database Search to access the database of business names to ensure the desired name is not currently in use. Once a viable company name is chosen, it can be reserved online or by mail:
- Online – Go to the Secretary of State’s Online Filing System page and click on the link labeled “App. for Reservation of LLC Name – LLC-05” to file the electronic form.
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- Fees: $22.50 can be paid online when applying.
- Mail – Download the Application for Reservation of Entity Name Form and complete it as directed. The application can then be sealed in a stamped envelope, along with payment, and sent to the following address:
Secretary of State’s Business and Commerical Services Division
1401 W. Capitol, Suite 250
Little Rock, AR 72201
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- Fees: A $25 fee can be issued by check or money order and should be made out to “Arkansas Secretary of State”.
Upon receipt, the name reservation will be valid for one hundred twenty (120) days, and notification of the exact expiration date will be delivered to the applicant by mail.
Step 2 – Assign a Registered Agent
When applying to organize an LLC, an individual must be identified to assume official responsibility to accept any potential notification of legal process. The named person or commercial entity is classified as a registered agent and is required to meet stipulated criteria to be eligible to take on the role for the company. The registered agent must:
- Be an Arkansas resident of at least eighteen (18) years of age
- Have a physical mailing address located in Arkansas
- Have availability during regular business hours to receive communications
If an LLC chooses to hire an outside company to provide registered agent services, the business must be authorized to do business within the state (§ 4-20-114).
Step 3 – File a Certificate of Organization/Registration
Officially instating the status of a limited liability company for your business can be accomplished by filing specific government paperwork with the state. In-state companies can utilize forms to apply for articles of organization (domestic), while firms from out of state (foreign) can make application for certificate of registration. Each filing can be submitted either using the Secretary of State’s website or sent via physical mail:
- Online – Using Arkansas’ SOS Corporations Online Filing System, you can select the desired form in order to begin the application process. Domestic companies will need to click on the link titled “Articles of Organization for Domestic LLC – LL-01” and then select the button that says “Start Form”. For foreign companies, using the same filing portal, click the link labeled “App. for Certificate of Registration for For. LLC – FL-01” and then on “start Form” to proceed.
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- Fees: Payment is needed to submit applications at the time of submission. The online filing fee for domestic LLCs is $45 and $270 for foreign registrations. All payments can be made online by entering debit or credit card information.
- Mail/In-Person – For domestic LLCs, download the Certificate of Organization for LLC (Form LL-01) and complete the filing as instructed. Foreign entities wishing to apply for LLC status in Arkansas can download the Application for Certificate of Registration of Foregin LLC (Form FL-01) and fill out all requested data. The paperwork for both domestic and foreign companies can then be delivered to the following address:
Secretary of State’s Business and Commerical Services Division
1401 W. Capitol, Suite 250
Little Rock, AR 72201
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- Fees: Domestic application processing costs $50 for mail-in submission. Foreign LLC registrations are obligated to pay a total of $300 to apply by mail. Payments can be issued by check or money order and should be paid to the order of the “Arkansas Secretary of State”.
Step 4 – Finalize an Operating Agreement
While Arkansas state statutes do not stipulate the obligation of producing an operating agreement to form an LLC, it can be a helpful tool to set expectations and provide additional records for banks and investors. The dual-purpose operating agreement can be downloaded for use, or you can file one of the following documents depending on the ownership classification of your particular company:
Although optional, endorsement of the document can be carried out in a licensed notary’s presence to officially validate the commitment.
Step 5 – Perform Other Required Tasks Related to the LLC
Upon the instated formation of an LLC, it is recommended that the following additional performances be carried out to ensure active status. It is also vital to secure identification numbers for the business on state and federal levels for future tax purposes. Review the listed undertakings below that should be attended to after setting up your LLC.
- Obtain a Federal Employer Identification Number (FEIN/EIN)
The federal government utilizes a system to identify a company, issuing an individualized number to each business that the IRS assigns. The designated number allows a company to file taxes and may also be necessary when applying for loans and opening business bank accounts.
To request a federal EIN, visit the IRS website and click the “Apply Online Now” link to submit the online form. Alternatively, you can download the Application for Employer Identification Number (Form SS-4) and mail it to the appropriate address listed on the IRS chart of addresses and phone numbers.
- File Annual Franchise Tax Reports
Annual franchise tax reports are required for domestic and foreign LLCs Alike. This report must be submitted to the Secretary of State once a year by the May 1st deadline. The form can be filled out online using the SOS website or downloaded using the most up-to-date version of the Annual LLC Franchise Tax Report, printed, and mailed to:
Business and Commerical Services Division
P.O. Box 8014
Little Rock, AR 72203-8014
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- Fees: Total fees for the franchise tax report is $150 for LLCs, both domestic and foreign. Online payment can be received by debit/credit card or electronic check. Mail-in submissions can be remitted by check or money order and made payable to “Arkansas Secretary of State”.
Additional Resources
- Arkansas Department of Finance and Administration – Starting a New Business in Arkansas
- Arkansas Secretary of State – Limited Liability Companies
- Internal Revenue Service – Employer ID Numbers