Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
Are you thinking of starting a business in Arkansas? With its business-friendly climate and low startup costs, The Natural State consistently ranks as one of the top places to run a small business. To help you become your own boss, we will walk you through the process of starting an Arkansas business step-by-step, from business idea to incorporation.
Start Operating in Arkansas: Key Points
Small businesses make up 99.3% of all companies in Arkansas, and there are ample opportunities for entrepreneurs to build successful businesses.[1]
Once you solidify your business idea and develop a business name, you must file business formation documents with the Arkansas Secretary of State.
You’ll need to apply for appropriate business licenses and permits and file your taxes on time to keep your business compliant.
Easily start your business and remain compliant with our all-in-one tools, guiding you well past the initial setup with the right support and documents.
Ready to Start an Arkansas Business?
Setting up a business in Arkansas doesn’t have to be complicated, even if you’re a new entrepreneur. Yet, to make the incorporation process as smooth as possible, it’s important not to jump in mindlessly and take the time to properly understand what you need to do to start operating in Arkansas.
The good news is that you’re not on your own. If you’re ready to become a small business owner in Arkansas, follow these eight steps and you’ll be on your way to more independence and fulfillment.
1. Choose a Business Idea
Every successful business starts with a great idea. You may already have a solid business idea and need to iron out the little details, or maybe you’re starting from scratch. Whatever the case might be, solidifying the concept behind what you want to do is the first step to starting a small business in Arkansas.
If you don’t know where to start, try answering the following questions:
What are you passionate about?
Get creative and brainstorm how to turn your interests into a business. You may have been an English major in college and want to try your hand at freelance writing. Or maybe you dream of positively impacting the planet — in which case, here are nine green small business ideas to try.
What problems do you want to solve?
Think about the issues and inconveniences you’re experiencing in your everyday life and how you could solve them (or at least make them easier to deal with). Alternatively, consider doing one of these 13 things to get inspired.
Who is your target audience?
This is an excellent time to figure out whether you’re going to sell to other businesses (B2B) or directly to consumers (B2C). Take the time to do some market research, get to know your customers and research industry trends.
Your business idea doesn’t have to be finalized and can evolve over time, but it’s essential to have something solid to start with. This foundation influences your business plan, name, and the business structure you choose for your new business in Arkansas, so give yourself enough time to figure it out.
→ Thinking about becoming an entrepreneur after graduating from college? Here are 11 small business ideas for recent college grads.
2. Draft an Arkansas Business Plan
To turn an exciting business idea into a functional new business, creating a detailed business plan is crucial. There’s no set format that you must follow, but a successful business plan typically includes the following:
Executive summary: a one-page summary of your entire business plan that covers the most important information and gives your mission statement
Target audience: an overview of the audience — or audiences — that you’re going to sell your products or services to
Competitor analysis: a research summary of your main competitors that articulates their strengths, weaknesses, and how your business stands out from them
Products and services: a summary of the products or services that you’re going to sell, focusing on their most important features and benefits
Financial plan: projections for revenue and expenses, an explanation of where your funding is coming from, and any other important financial considerations for your business
Operations plan: an explanation of the process you’re going to follow to create your product or deliver your services, including whether you’re going to need to hire employees
Marketing plan: an overview of how you’re going to market your business and your pricing strategy
Every business needs to have a plan before starting the business formation process. Deciding to start operating in Arkansas without one means that you’d be throwing spaghetti at the wall and seeing what sticks instead of following a thought-through strategy, which can lead to costly mistakes.
3. Select a Business Name
Your business name should be unique and memorable. Creating a name for your new business can be a fun and creative process, so here are some tips to help you brainstorm.
Play with the spelling: Take a well-known word and tweak the original spelling to give your business name a competitive edge. For example, Tumblr is a clever play on the word “tumblelogs,” a popular form of blogging in the 2000s.
Get inspiration from mythology: Nike, Hermes, and Mars are some examples of brands named after Greek gods.
Combine different words: Blending existing words into one brand name can help your business stand out — for example, TripAdvisor, PetSmart, and Sweetgreen.
When starting a business in Arkansas, keeping state regulations in mind is crucial.
Your business name must be “distinguishable from and not confusingly similar to” other business names already registered in the state.[2] To determine if your business name is available, you must do an Arkansas business search. Swyft Filings has a Free Business Name Search tool that you can use.
Once you find your business name, you can reserve it with the Arkansas Secretary of State for a small fee. Name reservation is an excellent idea for entrepreneurs who need more time to incorporate and want to take their time with the business formation process.
4. Choose a Business Structure
Choosing the proper business structure is one of the most important decisions you’ll have to make during the business formation process. There are several different structures that you can choose for your business entity depending on your goals and preferences.
Sole Proprietorship
Becoming a sole proprietor is an easy and inexpensive way to start a business in Arkansas. You don’t have to file any documents or pay state fees, but you may need to get appropriate business licenses depending on the nature of your activities.
However, doing business as a sole proprietor has significant downsides. A sole proprietorship doesn’t protect your personal assets from litigation, and you will be personally liable for all financial obligations or debt. Plus, your customers and competitors may take you less seriously than if you had an incorporated business.
Limited Liability Company
A limited liability company (LLC) is one of the best business structures for small businesses. It’s a hybrid structure that combines a corporation’s personal liability protection with a sole proprietorship’s flexibility. It’s inexpensive to incorporate and straightforward to manage. Swyft Filings can help you form your LLC in Arkansas in just a few minutes.
C Corporation
If you want to be able to issue stocks to shareholders, you need to form a corporation in Arkansas. Corporations offer a lot of growth opportunities. Still, it’s essential to know that they’re subject to “double taxation,” meaning you’ll have to pay taxes at both the business and individual levels. Form your C Corp with Swyft Filings for free.
DBA
If you’re operating your business as a sole proprietorship or a general partnership, registering a DBA — doing business as — can help you increase your credibility, grow your business, and open a business bank account. You can manually file for a DBA on the Arkansas Secretary of State website or have Swyft Filings do it in just a few clicks.
Nonprofit
A nonprofit is an entity type reserved for organizations that are furthering a social cause without an expectation of monetary gain. They are funded by donations and may qualify for tax-exempt status. A charitable organization is an example of a nonprofit. Swyft Filings can help you file for a nonprofit if you want to avoid complicated paperwork.
S Corporation
Unlike other options on this list, an S Corp is not a type of business structure but a special tax status that your small business may qualify for to avoid double taxation that C Corps face. It can be an alternative to forming an LLC.
5. File Business Formation Documents
You must file the necessary paperwork with the Arkansas Secretary of State to officially incorporate your new business. Specific requirements vary by business structure, but standard documents include:
Articles of incorporation: If you’re forming an Arkansas corporation, you’ll need to file articles of incorporation and provide important information about your business, such as its name, your Arkansas registered agent’s address, and number and type of authorized shares. This document is also referred to as a certificate of incorporation.
Articles of organization: This document is similar to articles of incorporation, but you’ll need to file it if you’re forming an LLC. You must provide your business name, registered agent’s address, and other information. It’s also sometimes called a certificate of formation.
Operating Agreement: An essential business formation document that outlines internal rules and regulations for your LLC. Arkansas doesn’t require all LLCs to file an operating agreement, but creating one is highly recommended.
Bylaws: A legal document that outlines internal rules, regulations, and agreements for your business if you’re forming a corporation.
It’s crucial to make sure that your formation documents are filed correctly. Even minor inconsistencies can cause serious consequences, such as losing your personal liability protections and tax benefits or even getting your LLC revoked altogether.
We’re here to help you incorporate your business on the first try. Whether you want to form an LLC, a C Corp, a DBA, or a nonprofit, Swyft Filings can help you file your business formation documents accurately and swiftly.
6. Apply for Arkansas Business Licenses and Permits
Your small business may need to obtain business licenses and permits to start operating in Arkansas. Arkansas doesn’t require a general business license at the state level. However, you may still need to obtain a federal permit, an industry-specific state license, or a license from your local government.
For example, you’ll need to obtain federal and Arkansas liquor licenses if you sell alcoholic beverages in the state. Depending on your city or county, you may need to apply for a local alcohol license as well. Even home-based businesses may require an Arkansas business license or a zoning permit.
The Small Business Administration website, sba.gov, has a helpful list of industries requiring federal licenses.[3] Contact your state and local authorities for information on state and local licenses.
Operating without necessary licenses can result in severe consequences, including steep fines or even having to dissolve your business. It’s vital to research license requirements or use a third-party service like Swyft Filings to do it for you.
7. File and Report Business Taxes
After incorporation, you’ll need to file different types of tax returns regularly. What taxes you must pay depends on factors such as your chosen business structure and whether your business has employees. Researching your tax obligations to stay in good standing with the state and the internal revenue service is essential.
The vast majority of businesses have to pay federal taxes to the IRS. In addition to that, you’ll also be responsible for Arkansas local and state taxes. You’ll typically need to pay an income tax and collect a sales tax if you sell physical products or certain types of services.
Arkansas also has a franchise tax that’s mandatory for most businesses. You must file an annual tax report to do business in the state. Companies used to have to pay this tax to the Department of Finance and Administration, but it’s now payable to the Arkansas Secretary of State.[4]
You must stay on top of your taxes and file them on time. Falling behind can result in severe penalties and high interest rates.[5]
8. Open a Business Bank Account
Mixing your personal and business finances is a recipe for disaster. Having a bank account exclusively for your new business allows you to maintain liability protection and makes tax season significantly easier.
Most banks will require business owners to have an employer identification number, or federal employer identification number, to open a business bank account. You can think of an EIN as a social security number for your business. You can apply for it on the IRS website or use Swyft Filings.
Take Your First Steps Toward Small Business Ownership
There are endless opportunities for entrepreneurs in the Natural State. Starting a business in Arkansas may seem overwhelming at first, but there are steps you can follow to turn your exciting business idea into a successful startup.
To start operating in Arkansas, you must develop a business name that adheres to state regulations, file appropriate formation documents for your chosen business structure with the Secretary of State, and take care of business license and tax requirements.
You don’t have to go through the business formation process alone. Swyft Filings can help you form your LLC, corporation, or nonprofit in just a few simple steps to get your business up and running in no time.
Your Perfect Fit: Whether you're looking at a simple LLC or a dedicated nonprofit, we'll help you identify the best structure for your dream business.
Continued Support: Your entrepreneurial journey doesn’t stop at formation. Our key management services help ensure your business thrives.
Tailored Affordability: Get value-packed options suited to your business needs, starting at just $0 + state fees.
Frequently Asked Questions
Is Arkansas a good place to start a business?
Arkansas is one of the best states to start a small business. Small businesses make up 99.3% of all companies in the state, and the pro-business climate makes it easy for entrepreneurs to capitalize on opportunities.
How much does it cost to start operating in Arkansas?
The answer to this question depends on various factors, such as your chosen business structure and the nature of your activities. You can expect to cover a filing fee when you incorporate and additional fees when you apply for business licenses and permits
Can I start a business in Arkansas without a business plan?
You’re not legally required to have a business plan, but it’s integral to starting a business. Having a solid business plan in place significantly increases your chances of success.
What does Arkansas require to start a business?
It depends on your chosen business structure. Generally speaking, you must develop a business name that adheres to state regulations, file formation documents with the Arkansas Secretary of State, and apply for appropriate business licenses and permits.
What is the process for starting a business in Arkansas?
It would be best if you started by forming a solid business idea and coming up with a detailed business plan. Then, file business formation documents with the Secretary of State, secure any necessary licenses and permits and open a business bank account. Researching your tax obligations and reporting your taxes on time is also essential.
Why are most LLCs in Delaware?
Delaware has some of the most business-friendly laws in the US. There’s no income tax, you don’t have to disclose your name and address on your LLC formation documents, and you can run your business flexibly. Learn more about starting an LLC in Delaware.
Bibliography
State of Arkansas House of Representatives. “Small Business in Arkansas.” Accessed June 28, 2023.
Arkansas Secretary of State. “Name Availability Guidelines.” Accessed June 24, 2023.
U.S. Small Business Administration. “Apply for licenses and permits.” Accessed June 24, 2023.
Arkansas Secretary of State. “Franchise Tax/Annual Report Forms.” Accessed June 28, 2023.
Bench. “What Happens If You Don’t File Taxes For Your Business.” Accessed June 28, 2023.
business types
Learn more about each type of business
No matter the business type, Swyft Filings can help you form your new company.
