There are many costs to consider when creating your Arkansas small business startup. Some of these fees are set in stone by state law, local ordinances, and industry-regulating bodies. Depending on the type of business you are starting, you may have to apply and pay for specific permits and licenses.
One of the very first costs you will incur when starting an LLC in Arkansas is the Articles of Organization fee. Learn more about the basic expenses and steps for starting your own LLC in the state of Arkansas, so you can plan accordingly.
What is an LLC?
A Limited Liability Company (LLC) is a type of legal entity you can form to own and operate your business. The LLC is one of the most popular business structures because it offers the legal protections and limited liability of a corporation but is much easier and cheaper to operate.
An LLC protects your assets in case of debt or a lawsuit against your company. This means that if a lawsuit is filed against your business, then your home, car, and personal accounts cannot be taken from you. The same cannot be said of a sole proprietorship or partnership.
LLCs also provide business owners with pass-through taxation. Your profits and losses “pass through” your personal tax return, allowing them to be taxed at your personal tax rate. The Tax Cuts and Jobs Act gives LLC owners a special tax deduction through 2025 of up to 20% of the net business income earned by the business.
How much does starting an LLC in Arkansas cost?
The Articles of Organization Fee
The absolute bare minimum it costs to start an LLC in Arkansas is $45. This is the cost of the Articles of Organization Fee.
Your Articles of Organization are what make your business official with the state. They outline the rights, powers, and obligations of the members of the LLC as well as rules for how the LLC itself will interact with the members.
Before you turn in your Articles of Organization, you should have the following information gathered:
- Your LLC’s official business name
- The LLC’s principal address
- The registered agent’s name and address
- A decision about who manages the business (a manager or one of the members)
- The names and titles of the LLC’s members
To file your Articles of Organization with the state of Arkansas online, the fee is $45. If you choose to submit your papers by mail or in person, the filing fee is $50.
If you are not comfortable completing and filing the paperwork yourself, there are online options like LegalZoom or you can have a CPA or attorney assist you. Just keep in mind that this will increase the cost, generally by a few hundred dollars.
The LLC Name Reservation Fee
Arkansas does not require you to reserve your business name, so this is an optional cost. When you register your LLC, the state will make sure there are no other businesses currently operating under that name. Once you file, no one else in the state can use that name while the business remains in operation.
If you are not ready to form your LLC or you think someone may try to file under a similar business name, you can reserve your business name in Arkansas for 120 days. It costs $22.50 to file online and $25 to file a hard copy.
Again, this is not required, and the better option is usually to just file your LLC to reserve your business’s name.
Trademarking Fees
If you plan to work nationally or franchise your small business startup, you may want to consider trademarking your business name. This ensures that no other business can use your name anywhere in the United States.
The cost of a trademark varies depending on how many items you are trademarking, how you choose to file, and if you use the services of an attorney for the filing process. Generally speaking, filing with the U.S. Patent and Trademark Office for a trademark on your business name will cost between $225 and $600. That does not include legal fees.
How much is a small business license in Arkansas?
Another cost to expect after forming your LLC is the cost of certain permits and business licenses. Depending on how heavily your industry is regulated, you may need multiple licenses and permits to operate lawfully in Arkansas.
Does Arkansas require a business license? Yes. Most Arkansas small business startups will need a business license, also referred to as a “privilege license,” to operate.
Based on your industry and business type, how much it costs to start a business in Arkansas may include:
- Zoning permits
- Building and sign permits
- Permit to sell alcohol
- Restaurant and foodservice permits
- Contractor licenses
- Child care license
These are just a few examples. You should research local and industry regulations and requirements carefully before you officially launch your business. If you have questions or concerns, contact the Arkansas Small Business and Technology Development Center. We are happy to point you in the right direction.
For more information, download our e-book on license, permit, and tax requirements.
Get Your Arkansas Small Business Startup Off the Ground
Ultimately, the cost of the licenses and permits you need to operate an Arkansas small business depends on the requirements of the industry in which you plan to launch.
If you are ready to get your small business off the ground, call on us! For assistance obtaining business licenses and figuring out how to finance your Arkansas business, the ASBTDC is here to help.
Contact us today for help with business planning, applying for funding for your startup, or making sure you have all the proper licenses and legal designations for your business.