How to Start a Business in Arkansas
Everything you need to form your Arkansas LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Forming an LLC in Arkansas costs $45 online with the Secretary of State, one of the lower formation fees in the country. Ongoing state maintenance for an LLC is a flat $150 annual franchise tax due May 1, with no separate annual report fee on top of it.
This guide covers every step from choosing a business structure to obtaining the licenses and permits your business needs to operate.
Choosing Your Arkansas Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Arkansas small businesses.
| Entity Type | Liability Protection | Taxation | Arkansas Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $45 | $150 Annual LLC Franchise Tax Report | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $45 | $150 Annual Corporation Franchise Tax Report | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Arkansas Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Arkansas Secretary of State, Business and Commercial Services Division database. Reserve for $22.50 (120 days).
- 3
Appoint a registered agent
Must have a physical Arkansas street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Certificate of Organization for Limited Liability Company (Form LL-01) ($45) or Articles of Incorporation for Domestic For-Profit Corporation (Form DN-01) ($45) with the Arkansas Secretary of State, Business and Commercial Services Division.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Arkansas Department of Finance and Administration. State sales tax rate: 6.5%.
- 7
Get required licenses and permits
Arkansas has no single general statewide business license, and the Secretary of State does not issue business licenses.
- 8
Register for Arkansas taxes
Personal income tax: Graduated, top rate 3.7% for tax years beginning on or after January 1, 2026.
How Much Does It Cost to Start a Business in Arkansas?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Arkansas Secretary of State, Business and Commercial Services Division) Required | $45 | The Secretary of State's new business page lists anticipated processing of 3 to 5 business days for all filings,... |
| Corporation filing fee Required | $45 | If forming a corporation instead |
| Annual LLC Franchise Tax Report Required | $150 | On or before May 1 each year, for the year ending December 31 preceding the reporting year. |
| Name reservation | $22.50 | 120 days |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Arkansas has no single general statewide business license, and the Secretary of State does not issue business licenses. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $45 to $495 |
Start a Specific Business in Arkansas
Arkansas Business Guides
- How to Start an LLC in Arkansas
- How to Start a Corporation in Arkansas
- Sole Proprietorship in Arkansas: How to Start One
- Arkansas Business License: What You Need and How to Get It
- Arkansas Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Arkansas
- Arkansas Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Arkansas
- Arkansas Registered Agent: Requirements and How to Choose One
- Best LLC Services in Arkansas
- Arkansas Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Arkansas
Why Start a Business in Arkansas?
- Forming an LLC costs $45 filed online with the Secretary of State, or $50 on paper, one of the lower formation fees in the country.
- A domestic corporation files Articles of Incorporation for the same $45 online, so the entity choice does not change the state filing cost.
- Ongoing state maintenance for an LLC is a flat $150 annual franchise tax due May 1, with no separate annual report fee on top of it.
- Arkansas has no general statewide business license, so most businesses only face industry specific state permits and local city or county licenses.
- The state sales and use tax rate is 6.5 percent, and a sales tax permit costs $50 through the Arkansas Taxpayer Access Point.
- The state economy produced $198.4 billion of GDP in 2025, ranking 34th among the states, with a population of about 3.11 million as of July 1, 2025.
Arkansas Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Arkansas?
- Most LLC filings are completed within two business days of receipt by the Secretary of State. The Secretary of State's website lists the anticipated processing time as 3 to 5 business days for online filings.
- What does it cost to start an LLC in year one?
- Forming an LLC costs $45 when filed online with the Secretary of State. If the business sells tangible goods or taxable services, a $50 sales tax permit is required. The state's $150 annual franchise tax is due May 1 each year.
- Can a non-resident form an LLC in Arkansas?
- Residency is not specified as a requirement for forming an LLC in Arkansas. The online Certificate of Organization filing is available through the Corporations Online Filing System.
- What's the cheapest way to start a business in Arkansas?
- The cheapest way to form a registered business entity is to form an LLC online for a $45 filing fee with the Secretary of State. A business that does not sell tangible goods or taxable services would not be required to obtain the $50 sales tax permit.
- Is an operating agreement required for an Arkansas LLC?
- An operating agreement is not listed among the formation requirements for an Arkansas LLC. The Certificate of Organization is the sole formation document filed with the Arkansas Secretary of State.