How to start an Arkansas corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Arkansas corporation.

How to start a corporation in Arkansas

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Arkansas corporation

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Arkansas requirements:

• Your name must be different from that of any other business registered with the Arkansas Secretary of State.
• The name must include "Corporation," "Incorporated," "Limited," "Company," or an abbreviation of one of these terms. These terms cannot be the final word in the name.
• Your name can't be misleading to the public. It can't suggest a business purpose other than what your business actually does. A clothing store should not call itself "Incorporated Electronics Depot."

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between an Arkansas S-Corp and C-Corp tax designation

There are similarities between an Arkansas S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, however, come down to the following:

• Ownership Rules: a C-Corp has no limits on the number of shareholders or stock classes it can have. An S-Corp can only have 100 shareholders and one stock class. All shareholders must be citizens or legal residents of the United States.
• Taxes: a C-Corp is taxed as a separate entity from its shareholders. The business must file corporate taxes, and shareholders must also pay taxes on any dividends they receive. An S-Corp does not pay corporate taxes. It is a "pass-through" entity, which means owners report their shares of income on their personal tax returns.
• Documents: a C-Corp is the default designation in Arkansas. If you want your corporation to be recognized as an S-Corp, you'll have to file IRS Form 2553, Election by a Small Business Corporation. Arkansas also requires that you file a separate state form, Form AR1103, along with a copy of your federal Notice of Acceptance as an S-Corp.

3. Appoint directors and shareholders for your Arkansas corporation

Each state has its own personnel requirements for incorporating. In Arkansas, a corporation should have at least three directors, unless there are less than three shareholders of record. In that case, the number of directors cannot be less than the number of shareholders.

Arkansas does not require that directors live in the state and does not set any limits on owners' or directors' ages. You do not have to list your directors' names and addresses in your Articles of Incorporation, but you do need to include the names and addresses of all incorporators.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have an Arkansas address) or choose one to do that service for you (if you are not located in Arkansas or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Arkansas

Once you have a business name and registered agent, you can register your business as an Arkansas corporation with the state by filing your Articles of Incorporation. This document may be referred to in other states as "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Arkansas must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Arkansas corporation.

What to do after incorporating in Arkansas

Arkansas requires that you create two types of records:

• Corporate Bylaws set out the structure and operating rules of your corporation. You may include any provisions you like in your bylaws, as long as they're consistent with your Articles of Incorporation and Arkansas law.
• Corporate Minutes create a record of everything that happens during official meetings of your board or shareholders. Minutes should be recorded by your corporation's incorporator or a director. You must keep your meeting records for three years.

These documents work together to protect your company's status as a corporation. You don't have to file either of them with the state. Just keep them in your corporate records book, along with your other important papers. We help you compare Corporate Meeting Minutes requirements and Bylaws requirements from state to state.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Arkansas means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Arkansas, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, you must also keep records – like Bylaws and Meeting Notes – to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state