If you’re looking to open a PLLC in Arkansas to render professional services in industries such as medicine, engineering, law, accounting, or anything along those lines, you’ve come to the right place.
In this article, we will answer all the popular questions like “what is a PLLC in Arkansas”, “how to form a PLLC in Arkansas”, “how to register a PLLC in AR”, and the like, so that you have all the information you need to get the ball rolling!
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A PLLC in Arkansas is essentially the same thing as a limited liability company in AR. The difference between the two is that the former is generally formed by highly skilled specialists like doctors, lawyers, architects, etc., while the latter can be set up for any other activity.
Aside from that, PLLCs are required to have a business license to do business legally. To find out if your business belongs to “professional service” and what type of license you need to obtain if it does, you can check this list of licensed occupations in AR.
If you’re looking for a comprehensive guide on how to form a PLLC in Arkansas, the following tips will help you get your business up and running. However, as mentioned earlier, before moving on to any of the steps, it’s important to sort out your license first.
In Arkansas, similar to many other states, it’s not necessary to have a statewide license, but you will need to see into all the permits and licenses needed to run a business, which may vary greatly depending on the industry, whereabouts of your business, and local municipality.
Once you’ve got your license, you can select a name for your business. A company name is the first impression you get on your customers and is also the name they will associate your product with, so it’s important to choose it wisely.
Find the common requirements for a PLLC name below:
It may happen that you have a great name idea, and it’s still available, but you’re not yet ready to file a PLLC due to pending paperwork or any other reason.
In this case, you can take advantage of a name reservation service. Simply fill out a Name Reservation application with the Arkansas Secretary of State online or by mail, and the name you’ve chosen will be put on hold for up to 120 days.
The standard filing fee is $25 if done by mail and $22.5 if filed online.
The next step is to hire a registered agent in AR (RA). Having a registered agent is a common requirement in the US, regardless of what legal entity you register, and therefore, this step cannot be overlooked.
Who can be a registered agent? In fact, you’ve got quite a broad range of options. Arkansas law allows any individual (or a company) aged 18 with a proven physical address within the state to act as an RA, as long as they can be freely accessed during business hours.
Here are just a few ideas:
Now, to the question of why use a registered agent. Every PLLC registered in the US is required to have an RA who will act as the point of contact between the business and government, timely handling all the correspondence.
If you can do the work yourself, Arkansas allows that. However, because being your own RA means exposing your personal data to the public, most businesses prefer to hire professional service agencies that will keep your personal data off the public records.
Other advantages of hiring a registered agent include:
This is the answer to how to register a PLLC in Arkansas. By and large, all you really need to do after obtaining a business license and choosing a name is to file the Articles of Organization, which can be done online or by mail, whichever is more convenient for you.
This document is the official proof of your PLLC registration and includes the following information:
In Arkansas, the filing fee is $45 when filing online and $50 when sending docs in paper form. And the processing time usually doesn’t take longer than 2 days. If you submit your docs in person, you can expect them to be reviewed on the same day.
Drafting an operating agreement isn’t a state requirement, but is nevertheless highly recommended. Here are the reasons why.
First things first, similar to the Articles of Organization, it’s a legally binding document, which means it can be used for various business-related functions, including opening bank accounts, applying for a loan, and so on.
Secondly, this document saves you from any legal or operational issues should anyone from the team fail to fulfill their obligations, as it basically describes the internal company’s rules.
And finally, it’s an excellent way to bring investors and new partners into your business. If you provide enough details in your operating agreement, the odds are investors and those interested will more likely want to join your PLLC.
Not dissimilar to other states, Arkansas requires any PLLC planning to hire employees to acquire a federal tax ID number. Also known as an Employer Identification Number (EIN), this 9-digit number is used for a variety of purposes.
As just mentioned, this number is needed by any business that wants to hire employees. In addition, you’ll need it to pay taxes, making it a must for pretty much any PLLC.
If you don’t already have an EIN, you can get one for free by simply filing an application with the Internal Revenue Service (IRS).
The cost of starting PLLC in Arkansas is pretty much the same as that of an LLC, except that you will also need to pay for a business license, which may cost you from $50 to $1000 depending on your business.
In general, there are two types of costs to consider:
Find details on creating a PLLC in Arkansas below:
|Business License||May vary on business and industry|
|Articles of Organization||$45|
|Registered agent fee||$0-$125|
|Name reservation fee (optional)||$25 if filed by mail and $22.50 if filed online|
|Certified copies of documents||$5 per page|
|DBA (optional)||$25 if filed by mail and $22.50 if filed online|
|Articles of Amendments (optional)||$50|
|Articles of Dissolution fee (optional)||$50|
When planning the cost of PLLC in AR, you should also consider that you will need to renew your business license. Renewal costs about the same as the initial registration and must be done either annually or every two years, depending on your business.
Filing your Articles of Organization is the most important step in opening a professional limited liability company in Arkansas. Basically, it serves as proof that you’re now a business owner with the right to provide professional services in the state.
However, there are a few more things to take care of when opening a business in AR. Further down, we’ll walk you through other crucial steps to take after creating a PLLC.
While it is not necessary to open a business account, it’s highly recommended to do so. For one, you’ll be able to separate your personal assets and business gains. For another, it will be easier to keep track of filing taxes correctly.
To open a business account, you will need your EIN and Articles of Organization. If your PLLC has employees, you will also need to provide a state tax ID, which you can get from the Arkansas Department of Revenue.
Managing finances often appears to be the most challenging part of running a business. There are so many things to keep track of that even someone who’s well-versed in accounting can easily make mistakes.
With that in mind, it’s best to enlist your finances to an accountant who will do all the work for you, ensuring your PLLC books of accounts are well-kept and income tax returns are paid in due time.
Even if you have a financial background and know all about finance management, it can still be a good idea to have someone to consult with.
At some stage, you may need assistance with sorting tax returns, allowances, filling forms, etc. and that’s where an accountant will come to your help.
Any company in Arkansas, be it an LLC or a PLLC, that hires at least three employees is required to acquire workers’ compensation insurance. This policy covers expenses for all work-related accidents or illnesses that may occur during employment.
Aside from that, you may want to look into obtaining general liability insurance. Surely, you don’t expect anything bad to happen, but it’s best to play it safe and protect your PLLC from the cost of any claims should those arise in the course of running your business.
In Arkansas, there are two types of filing reports: income and annual. The former, as the name suggests, are filed to report the income, while the latter are filed to update the current information of your PLLC at the end of each year.
Please note that PLLCs in AR are required to file an income statement to the Arkansas Department of Finance irrespective of whether they’ve made any money from their business or not. You will also need to pay an annual franchise tax to submit a form.