The owner of the business is not personally liable for the company's debts if they are made into an limited liability company.You will need to name your business and file paperwork with the Arkansas Secretary of State if you want to make it an limited liability company.It is a relatively straightforward process which will give you a clear legal status, helping you operate and develop your company.The process for forming an limited liability company is pretty much the same across the US.
Step 1: The benefits of limited liability companies are recognised.
The owner of the business may be the primary benefit of forming an limited liability company.The owner of a business is not responsible for its debts or judgements.It gives the business owner protection while not requiring them to incorporate their business, as well as offering some tax advantages.All profits and losses are passed through the business to the members, who then report them on their individual tax returns.The business entity is not taxed as a separate entity.
Step 2: Think of a name for your company.
Picking a name for your business is the first step in forming an limited liability company.You have to follow a few basic rules when choosing a name, such as it must be different from all existing limited liability companies in the state, and it has to clearly indicate that it is an entity.You can't use words that might confuse a federal or state agency.Try to get a name which will look good and work with any marketing strategies you have.To find out what comes up when you search for it, be sure to check online to see if the relevant URL is available.As soon as you decide on a name, claim your social media presence.
Step 3: Decide on an agent.
To form an limited liability company in Arkansas, you will need a registered agent to receive and send papers.The agent must be a resident of Arkansas or a corporation authorized to do business in the state.You can choose someone from within your business to be your registered agent.If you want someone else to handle the sending and receiving of legal documents, you can hire someone to act as your registered agent.Compliance management, filing annual reports, and other document management services can be provided by some agents.
Step 4: The organization's articles should be filed.
You will need to file the Articles of Organization if you are forming a domestic limited liability company in Arkansas.You can do it online or in the mail.If you fill out the form online, it will be sent to the Secretary of State when you have completed all the fields.The online application can be accessed here.You can download the PDF of the form if you prefer to mail it in.The name of your company, the principal business address, and the name and address of the registered agent are required for the form to be completed.The Secretary of State has a filing fee.
Step 5: An operating agreement should be created.
There are a number of actions you can take once you have formed the limited liability company.It is good practice to create an operating agreement, even if it is not required.The document details the ownership and operating procedures of your company.Developing and maintaining strong and structured financial and working relationships with your co-owners is helped by a good operating agreement.The rights and responsibilities of each person will often be included in an operating agreement.Sample operating agreements can be accessed online.
Step 6: You can open a business account.
It is important to open a separate business bank account for your company when you turn it into an limited liability company.A business account will protect you from liability and keep your company separate from other people.It will be easier to calculate and pay business taxes with a separate account.You will appear more professional and organised if you keep a business account.If you don't take proper steps to maintain your business's identity, a court may make you responsible for the business.
Step 7: Obtain an employer identification number.
An EIN is the equivalent of a business's social security number and will be required for your business to become an LLC.To open a bank account for your business, to hire employees, and for federal and state tax purposes, you will need an EIN.After you have formed the business, you can get an EIN for free from the IRS.You can apply for an EIN online.You can complete the form and mail it in.You can get the documents and instructions from the IRS website.
Step 8: Do you know your tax status?
All applicable state and federal taxes will be required of you depending on the size and nature of your business.You will need to register for state tax if you have any employees.If you sell physical products that require sales tax in your state, you need to register.Depending on their structure, Arkansas limited liability companies can be taxed by the IRS as corporations or partnerships.The Arkansas Secretary of State requires annual franchise tax reports from limited liability companies.Information returns have to be filed with the IRS and the Arkansas Department of Finance and Administration.
Step 9: Obtain permits for your business.
When you register your business, you need to make sure that you have all the required clearances.You have to comply with federal, state and local government regulations.All the food safety and hygiene certification is required for a restaurant.The US Small Business Association has an online tool that you can use to determine which licences and permits you need.The Chamber of Commerce can give you guidance on the regulations you must follow.Look up both state and federal regulations.