Start an LLC in Arkansas with these Five Easy Steps
- Step 1. Name Your Arkansas LLC
- Step 2. Choose a Registered Agent
- Step 3. File the Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN
Or Simply use a professional service:
Setting up an LLC in Arkansas Is Easy
To start an LLC in Arkansas, you will need to file your Articles of Organization with the Arkansas Secretary of State. You can apply online, by mail, or in person for $50. The Articles of Organization is the legal document that officially creates your Arkansas limited liability company.
Follow the step-by-step guide below to form an Arkansas LLC today and get your business up and running. To learn more about LLCs and their benefits, please read our What Is an LLC guide.
STEP 1: Name Your Arkansas LLC
Choosing a company name is the first and most important step in setting up an LLC in Arkansas. Be sure to choose a name that complies with Arkansas LLC naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines:
- Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (e.g., FBI, Treasury, State Department, etc.).
- Restricted words (e.g., Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
- Your name must be distinguishable from any other Arkansas limited liability company, corporation, or limited partnership.
2. Arkansas LLC Name Availability: Make sure the name you want isn’t already taken by doing an Arkansas LLC Search on the Secretary of State’s website.
To learn more about searching for an Arkansas LLC name, read our full guide.
3. URL Availability: We recommend that you check online to see if your business name is available as a web domain. Even if you don’t plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.
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Not sure what to name your business? Check out our LLC Name Generator. Then, create a logo with our Free Logo Generator.
How to form an LLC in Arkansas ← you are here
This Quick Start Guide is a brief overview of how to form an LLC in Arkansas.
Arkansas LLC costs:
State filing fee: $45 (one-time fee)
Annual fee: $150 (every year)
Hire a company to form your Arkansas LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
Here is a quick overview on starting an LLC in Arkansas
An Arkansas Limited Liability Company (LLC) is a legal structure used to protect your personal assets (home, car, bank account) in the event your business is sued.
An LLC can be used to operate a business, or an LLC can be used to hold assets (such as real estate, vehicles, boats, or aircraft).
Forming an LLC in Arkansas can be done online or by mail.
First, search your Arkansas LLC name in the state database and select your LLC’s Registered Agent.
File your Arkansas Articles of Organization online ($45) or by mail ($50). Approval time is 2-3 days if you file online and 1-2 weeks if you file by mail.
After your Arkansas LLC is approved, complete your Operating Agreement and get an EIN Number (aka Federal Tax ID Number) from the IRS.
Then make sure to pay your Arkansas Annual Franchise Tax every year to keep your LLC in compliance.
We’ve created a free course that will walk you through forming your Arkansas LLC, step-by-step.
You can find the detailed lessons linked at the top of this page.
Created byВ FindLaw’s team of legal writers and editors | Last updated March 26, 2019
When you’re starting a business, one of the first steps that you’ll have to take is selecting a business structure for your company. If you’re considering forming an LLC, then you should familiarize yourself with the basic requirements. This article details how to form an LLC in Arkansas and provides a link to forms and links to relevant statutes.
Forms for Arkansas LLC Formation
Creating an Arkansas LLC involves completing and filing formation documents. It’s easy to get started on your own by using FindLaw’s Arkansas LLC Formation Package.
An “LLC” or “limited liability company” is a business structure that provides owners with the tax advantage of “flow-through” taxation found in partnerships while simultaneously protecting them from personal liability from the company’s debts and judgments (as with corporations).
Explanation of How to Form an LLC in Arkansas
Because the requirements for forming an LLC vary slightly, you must familiarize yourself with the rules for your chosen state before you begin. See the chart below for an explanation of how to form an LLC in Arkansas.
Arkansas Code Title 4. Business and Commercial Law:
Name the LLC
Arkansas law requires that the LLC names must:
- Contain the terms “Limited Liability Company” or “Limited Liability Co.”; or
- The approved abbreviations “L.L.C.”; “LLC”, “L.C.”, “LC”, “LLC”, or “Ltd,” for “Limited” and “Co” for “Company.”
- Be different from the names of existing businesses that are already registered.
You can check the Arkansas Secretary of State Business Name Database for name conflicts.
You may pay a fee and reserve a name (for 120 days) by filing an application online or by postal mail.
Select a Registered Agent
Every Arkansas LLC must select a registered agent who agrees to accept legal documents if the company is sued. The agent may be:
File Articles of Organization
You must file the Articles of Organization with the Arkansas Secretary of State.
The filing (which includes fees) must include the following information:
- The LLC’s name and address;
- The registered office’s name and address;
- Whether the LLC is member-managed; and
- Whether the LLC’s duration is perpetual or for a specified period.
- In-person; or
- Via regular mail.
If you don’t file online, the Secretary of State Business and Commercial Services Division website provides instructions for filing in-person or by mail.
Create an Operating Agreement
Arkansas doesn’t require them, but it’s advisable to create an operating agreement.
Comply with Tax and Regulatory Requirements and Determine Necessary Business Licenses/Permits
Department of Finance and Administration
If your company sells goods and collects sales tax, or has employees, you will likely have to register with the Arkansas Department of Finance and Administration (DFA).
You may also have to obtain local and state business licenses, depending on the type of business and the location.
IRS Employer Identification Number
If your LLC has more than one member, then you must apply for an Employer Identification Number (EIN).
All LLCs organized outside of the state must register with The Arkansas Secretary of State to do business in the state. All foreign LLCs must appoint a registered agent who’s physically located in Arkansas for process of service.
Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.
Annual State Tax Obligations
All Arkansas LLCs and foreign LLCs must pay a minimum $150 tax to the Arkansas Secretary of State every year and file an annual franchise tax report. Both the payment and the franchise report must be completed each year by May 1 and late reports will result in penalties. You may file online or download the forms from the Secretary of State website.
How to Form an LLC in Arkansas: Related Resources
- Filing LLC Taxes
- LLC Member Tax FAQs
- Starting a Limited Liability Company Checklist
Questions About How to Form an LLC in Arkansas? Contact a Lawyer
If you’re preparing to form your Arkansas LLC, then you can likely get by on your own after getting the right forms. However, if you have specific formation questions or have a complex issue, then you should seek legal help. Contact an experienced Arkansas attorney today to learn more.
Forming your LLC in Arkansas can be easy. This guide will help you get off on the right foot.
by Rudri Bhatt Patel
updated July 09, 2021 · 5 min read
A limited liability company (LLC) offers liability protection and tax advantages, among other benefits for small businesses.
LLC formation in Arkansas is easy. Just follow these six steps, and you’ll be on your way.
1. Name Your Arkansas LLC
You’ll need to choose a name to include in your articles before you can register your LLC.
Names must comply with Arkansas naming requirements. The following are the most important requirements to keep in mind:
- Your business name must include the words Limited Liability Company, LLC, or L.L.C.
- Your name must be different from an existing business in the state. You can do a search on the Secretary of State’s website to determine if a particular business name is in use. For name availability in Arkansas, check this link.
- The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork.
- Your LLC name must be distinguishable from existing businesses.
See a complete listing of Arkansas naming rules.
- URL availability. Even if you don’t think you’ll need a webpage, you probably will. At the very least, you should reserve the option of having one in the future by buying your domain name now. Before finalizing your LLC name, it’s a good idea to check if the URL is available.
- Reserve your name. If you aren’t ready to register your LLC but are concerned your name might be taken by someone else, you can reserve it for a small fee. In Arkansas, names may be reserved for up to 120 days by paying the fee and submitting the proper form to the state authority.
2. Choose Your Registered Agent
Arkansas requires you to appoint a registered agent for your LLC.
A registered agent is the person or entity authorized to receive service of process and other official legal documents and notices on behalf of your LLC.
A registered agent can be a person (including yourself or an employee of your LLC) or an entity that offers a registered agent service. They must meet the following criteria:
- Entities (or companies) must provide registered agent services.
- The agent must have an address in Arkansas.
- The agent must be on-site and available to accept documents during regular business hours.
3. Prepare and File Articles of Organization
The Articles of Organization is a document that officially establishes your LLC by laying out basic information about it.
Prepare Articles of Organization and file them with the Arkansas Secretary of State to register your Arkansas LLC properly. Though it sounds like a big job, that simply means filling out a relatively simple online form and submitting it. You can also send it by mail.
To prepare your articles, you’ll usually need the following information:
- Your LLC’s name and address
- The name and address of your registered agent.
- Management structure: Will managers or members manage the LLC?
- The person forming the LLC is required to sign the Articles.
Once you file your Articles, the secretary of state will review the filing. If the articles are approved, the LLC becomes a legal business entity.
4. Receive a Certificate From the State
The state will issue you a certificate that confirms the LLC formally exists after the LLC’s formation documents are filed and approved.
This certificate will allow the LLC to obtain an Employer Identification Number (EIN), business licenses, and business bank account.
5. Create an Operating Agreement
An operating agreement is a document that outlines the way your LLC will conduct business.
Arkansas doesn’t require an operating agreement is an essential component of your business. Having a readily accessible, written operating agreement is helpful for various reasons, including settling disputes that may arise over financial agreements and other potential litigation. Without an agreement in place, the courts make determinations based on state law, not necessarily what is in the best interest of the LLC and its members.
The operating agreement can include, but is not limited to, the following:
- LLC’s name and principal address
- Duration of the LLC
- Name and address of the registered agent
- Information about the Articles of Organization
- Purpose of the business
- Members and their contribution
- The way profits and losses will be divided
- Procedure for admitting new members, as well as outgoing members
- Management of the LLC
- Indemnification and liability clauses
6. Get an Employer Identification Number
The nine-digit Employer Identification Number (EIN) is assigned by the Internal Revenue Service to identify your LLC for taxes. You can obtain your EIN by mail or online through the IRS.
The purpose of an EIN is to assist with the following:
- File and manage taxes at the state and federal level
- Open a business bank account.
- Hire employees.
Registering your LLC gives you a legal foundation to conduct business. Plan to keep your LLC compliant and in active status on the state’s website.
All LLC’s must pay a minimum $150 tax to the Arkansas Secretary of State each year. Annual franchise tax reports must also be filed with the Arkansas Secretary of State each year by May 1. The $150 payment is due at the same time.
This might include making quarterly tax payments and/or filing an annual report. You also need to maintain a registered agent for your business.
A registered LLC also makes it possible for you to do the following:
- Obtain permits or licenses necessary to operate your business, including health department permits, zoning permits, home occupation permits, professional licenses, and more. Some states require a seller’s permit to conduct sales.
- Register your business with the state’s tax agency.
- Open a business bank account.
- Apply for a business credit card.
- Purchase insurance for your business.
- Protect your name and logo with a trademark.
Are you looking to form a business entity in Arkansas for people who are licensed to provide professional services? If so, you may be interested in starting a professional limited liability company (PLLC).
The PLLC is a popular choice for licensed entrepreneurs looking to start businesses with fellow doctors, attorneys, accountants, engineers, or other professionals, thanks to its ability to reduce each professional’s personal liability while also providing a host of other benefits.
In this article, we’ll walk you through the steps required to form a professional LLC in Arkansas in compliance with state and federal laws. Let’s get started!
What Is a Professional Limited Liability Company?
For the most part, professional limited liability companies are quite similar to standard LLCs, and they share many of the same benefits.
In general, an LLC is a business entity type that brings together some of the most popular attributes of casual entities, like sole proprietorships and general partnerships, with the formality of corporations. The resulting entity is one that is highly flexible and customizable, while also providing some great benefits to its owners.
The factor that differentiates a PLLC from a standard LLC is that the PLLC is strictly for licensed professionals to operate their businesses with other licensed professionals. In Arkansas, the types of professionals who form PLLCs include architects, attorneys, certified public accountants (CPA), dentists, doctors, and engineers.
The state of Arkansas isn’t particularly strict regarding PLLC membership, at least not to the level of some other states. In many states, there are guidelines dictating that all or at least half of a PLLC’s members must be licensed in the same profession, but Arkansas does not have this requirement.
Let’s discuss a couple of the attributes that make the PLLC such a popular option for these professionals.
A big benefit of a professional limited liability company is its ability to provide personal asset protection to its owners/members. Let’s say you operate a general partnership instead of a PLLC. If your business is sued, your creditors can pursue your personal assets to satisfy the lawsuit. This means your house, car, personal bank accounts, and personal possessions are all fair game.
However, for PLLC owners, this isn’t the case. Instead, creditors can only pursue the assets of your actual business. It’s important to note that this doesn’t defend your PLLC from malpractice suits. For example, if you are a member of a PLLC for doctors and you botch a surgery, the PLLC will not protect you from the patient filing a malpractice suit.
One of the main benefits of the PLLC is the fact that it gives its owners some options regarding how they want to be taxed. While a professional corporation also gives you choices regarding taxation, to an extent, the PLLC is much more flexible in this regard.
You can choose to have your PLLC taxed as a pass-through entity (similar to sole proprietorships or general partnerships), which means that your PLLC itself will not owe taxes. Instead, your profits and/or losses will “pass through” your PLLC to your owners, who will then pay taxes on that money on their own personal returns.
Another option is to be taxed like a C corporation or an S corporation. C corporation taxation is the most common form of taxation for corporations, but as this tax structure leaves its owners subject to double taxation (wherein the same money is taxed both at the corporate level and the individual level), it’s not a popular option for PLLCs.
The S corporation is a similar form of taxation to the pass-through method but avoids the self-employment taxes that come with partnership or sole proprietorship-style taxes. While this can save you some money because you won’t have to pay both the employer and employee portions of Medicare and Social Security, people who choose this form of taxation should be careful to ensure they’re still paying enough into Social Security to be able to draw from this entitlement when they retire.
How to Form an Arkansas Professional Limited Liability Company
Each state has its own method for forming PLLCs, as there is no uniform nationwide formation process. In Arkansas, the formation process for a PLLC is nearly identical to the process for a standard LLC, but there are some crucial differences.
Step 1 – Name Your PLLC
The first step is to choose a business name. Arkansas requires that the name of every PLLC registered in this state must contain the words “Professional Limited Liability Company” or “Professional Limited Company,” or the abbreviations “P.L.L.C.,” “P.L.C.,” “PLLC,” or “PLC,” and must not contain the name of a person who is not a member, except in the case of a deceased former member.
In addition to the legal requirements, there are also some practical applications to discuss. Generally speaking, your business name should indicate what your PLLC does. For instance, if you operate a PLLC for attorneys, you should probably have either the words “attorneys” or “lawyers,” or the phrase “law office” in your business name.
When you’ve come up with a name you like (we suggest making a list of 3-4 name ideas, in case your first choice is already taken), you should perform a name search on the Secretary of State website. If you’d like more information around LLC naming requirements, check out our guide.
IMPORTANT: To properly brand your business, you’ll want to acquire the domain name so nobody else can use it. Search for and find the perfect one through GoDaddy.
Arkansas Secretary of State—Business & Commercial Services
250 Victory Building
1401 West Capitol Avenue
Little Rock, AR 72201-1094
Statutory Authority: Small Business Entity Tax Pass Through Act of 1987 — Ark. Code Ann. § 4-32 (2012)
Arkansas LLC General Filing Instructions
1. Confirm availability of company name and reserve if necessary.
2. Complete the “Articles of Organization for Domestic Limited Liability Company.”
3. Complete the “Franchise Tax Registration.”
4. Prepare a Letter of Transmittal.
5. Submit the completed documents, along with a photocopy of each and filing fees, to the Arkansas Secretary of State.
Arkansas Articles of Organization
The following information is legally necessary and sufficient to form a limited liability company in Arkansas:
1. Company name
2. Address of principal place of business
3. Registered agent name and address
4. Management statement
6. Signature and printed name of each organizer
Arkansas LLC Fee Schedule
Application for Reservation of Company Name: $25.00 by mail, $22.50 online
Articles of Organization: $50.00 by mail, $45.00 online
Certificate of Registration: $300.00 by mail, $270.00 online
Certified Copy: $5.00
Articles of Dissolution: $50.00
Your company name must end with a limited liability company designator. In Arkansas the specific limited liability company designators are: “Limited Liability Company” “Limited Company” “L.L.C.” “LLC” “L.C.” “LC”. “Limited” may be abbreviated as “Ltd.” and “Company” may be abbreviated as “Co.”
Conduct an entity name search on the Arkansas Secretary of State website to confirm the availability of your company name.
If the name you want is available you can reserve it for 120 days by filing an “Application for Reservation of Entity Name” and paying a name reservation fee of $25.00. Note : Reserving your company name is optional.
The registered agent maintains a physical presence in the state to accept service of process, annual report notices, and other communications directed to the company and to forward the same to the company to which the service, notice, or communication is directed.
Arkansas requires that every business entity have and maintain a registered agent in the state. The registered agent may be either an Arkansas resident or active Arkansas business entity that has an Arkansas street address and consents to accept legal papers on your company’s behalf. Post office boxes and commercial personal mailboxes are not acceptable.
NOTE : Your company should not serve as its own registered agent. You can, however, personally serve as registered agent provided you are an Arkansas resident and have an Arkansas street address.
The state provided forms ask for and specify what is legally sufficient and necessary to form an Arkansas limited liability company. Nevertheless, Arkansas permits you to add other provisions to your Articles of Organization as an attachment.
The most common optional provisions are the following:
☐ Management of a limited liability company by designated managers
☐ Appointment of managers by a designated member or group
☐ Indemnification of members
☐ Indemnification of managers
☐ Right to admit new members
☐ Right to continue upon dissolution of dissociation
Post Formation and Ongoing Compliance
1. Draft and adopt an operating agreement.
2. Obtain a federal employer identification number by completing IRS Form SS-4.
3. If electing alternative tax entity filing status complete IRS Form 8832.
4. Open company bank account.
5. Create and maintain company records book.
6. Pay annual franchise tax.
Registering as a Foreign Entity
1. Complete the “Application for Certificate of Registration of Limited Liability Company.”
2. Attach a certificate of existence, or document of similar import, duly authorized by the official having custody of its records in the state under whose laws it is filed.
3. Submit the completed documents, along with the filing fees, to the Arkansas Secretary of State.
Dissolving an Arkansas LLC
1. Complete the “Articles of Dissolution.”
2. Complete the “Final Franchise Tax Report.”
3. Submit the completed documents, along with the filing fee and franchise tax payment, to the Arkansas Secretary Of State.
An Arkansas LLC operating agreement is a legal document that offers benefits to the member(s), most importantly, it separates and protects all of the members’ personal property. The document also offers tax advantages to the business and its contributing members.
Although Arkansas has no filing requirement for the document, the Secretary of State demands that companies file an annual franchise report, due by May 1st of each year following the initial formation. The cost shall be $150.00 annually and, if paid online, there will be a $5.00 online filing fee.
Operating Agreement Laws – § 4-32-405
Small Business Entity Tax Pass-Through Act – Title 4, Subtitle 3, Chapter 32
State Definition – § 4-32-102(11)
- Arkansas LLC Operating Agreements: By Type
- Forming an LLC in Arkansas
- (Video) How to Make an LLC Operating Agreement in Arkansas
Multi-Member LLC Operating Agreement – To be used by entities who will share a partnership (member management) with multiple contributing members. The document will list all members and provide in writing an outline of agreement between the members as to procedures and policies of the company’s daily operations.
Single-Member LLC Operating Agreement – The document would be used only by a single owner or sole proprietor of a business. The document would offer protections that are vital to a business that is run primarily by the owner of the business. The document outlines policies and procedures just as any business would and offers the same protections and tax advantages.
It is of the utmost importance that you check the availability of your business name before proceeding to file with the Arkansas Secretary of State. By performing a search of their Name Database, you can make certain that your desired operating name is indeed available for use and not currently registered by another business. Be sure that the name includes the words Limited Liability Company, or an accepted abbreviation (LLC, L.L.C.).
Step 1 – Articles of Organization/Certificate of Registration
Choose the type of LLC that you would like to create; Domestic or Foreign. The Arkansas Secretary of State allows both Foreign and Domestic applications to be submitted Online and by Adobe PDF format.
- Domestic – Articles of Organization
- Online – scroll down and select Articles of Organization for Domestic LLC – LL-01
- Adobe PDF
- Foreign – Certificate of Registration
- Online – scroll down and select App. for Certificate of Registration of For. LLC – FL-01
- Adobe PDF
Step 2 – Filing Fee
Applicants will be required to supply a filing fee upon submission of their registration documents. The fees for each LLC type are:
- Online – $45
- Adobe PDF – $50
- Online – $270
- Adobe PDF – $300
*A Certificate of Good Standing or like document issued from the initial jurisdiction of formation is required for all foreign applications.
Those filing via Adobe PDF must attach to their filings a check made payable to the Arkansas Secretary of State. All articles must then be sent by mail to the below address.
Business and Commercial Services, 1401 W. Capital, Suite 250, Little Rock, AR 72201
Step 3 – Operating Agreement
An operating agreement is a document used to legally define the rights and responsibilities of the Managing Member(s). The agreement states clearly the financial structure of the business as well as the capital contributions invested by those involved. There is no legal obligation to draft this document though it is highly advisable as it may be of great use in the event of future legal disputes.
Step 4 – Employer Identification Number (EIN)
The Employer Identification Number (EIN) is what the IRS uses to identify businesses for tax purposes, much like a Social Security Number. It allows the LLC to perform financial transactions legally using the company name. Acquiring an EIN will be necessary to hire employees, register for bank accounts, apply for credit cards, and the like. It can be applied for directly on the IRS Website or by mail using PDF Form SS-4.
What is a LLP?
A limited liability partnership (LLP) is a type of business arrangement that allows the individual partners to be free from the debts and liabilities of all of the other partners, as well as from certain debts and liabilities of the partnership. In an action brought against the partnership as a whole, no single partner is personally liable. In this way, it differs from a general partnership, in which all partners are liable for the partnership’s debts and obligations.
A limited liability partnership is similar to a general partnership in that all partners can actively participate in the management of the business, and losses and gains from the business are passed through to the partners according to their partnership agreement. Unlike a “limited partnership,” the LLP allows owning partners to have an vigorous role in management, while being shielded from personal liability.
- What are the Requirements for a LLP?
- What Paperwork Do I Need to Form a LLP?
- What Benefits Does Arkansas Give to a LLP?
- What Disadvantages Does Arkansas Give to a LLP?
- Should I Hire a Business Lawyer?
What are the Requirements for a LLP?
In Arkansas, the requirements to form a LLP are the following:
- File a Statement of Qualification: To form a Arkansas Limited Liability Partnership, you must file a Statement of Qualification, and pay a filing fee, with the Arkansas Secretary of State.
- Name of Your Limited Partnership: You must also name the LLP and be sure to check that the name of the LLP is not used and unique from other business entities of trademarks on Arkansas. The name of an Arkansas LLP has to include the words “registered limited liability partnership,” “limited liability partnership,” the abbreviation “L.L.P.” or the designation “RLLP” or “LLP,” in uppercase or lowercase letters.
- Statutory Agent: Every Arkansas LLP must have a statutory agent that will represent the LLP in any matter or will take legal papers on the behalf of the LLP. The statutory agent must be a resident of the state with a P
- Get EIN: Since a LLP is a separate entity than its partners; you would need to get a federal Employer Identification Number from IRS.
- Register with Department of Finance: Depending on the type of business that you have, you would need to register with Department of Revenue in Arkansas.
- Partnership Agreement: In Arkansas, a partnership agreement is not required when forming a LLP, but it is recommended. A partnership agreement would state what each partner can and cannot do when making business decisions.
- Get Business Licenses: Depending on the type of business that you have to obtain a business license.
- File Annual Report: In Arkansas, you are required to file an Annual Notice with the Secretary of State and pay a filing fee.
What Paperwork Do I Need to Form a LLP?
To form an Arkansas Limited Liability Partnership, you must file a Statement of Qualification with the Corporate Division with the following information:
- Official Name of the LLP
- Address of office of LLP
- Address of the agents of LLP
- Name and Address of each partner of the LLP
What Benefits Does Arkansas Give to a LLP?
There are several benefits of having a limited liability partnership in Arizona. These benefits are:
- Limited Liability:Limited partners are all protected in a LLP and every partner gets management control of the business.
- Tax Benefits: The profits and losses in a LLP flow through the business to the partners, all who are taxed on their personal income tax returns and get to share the profits and losses and are not held to double tax
- Flexibility: Limited liability partnerships offers business owners and partners flexibility in business ownership. Partners have the right and control to decide how they will individually contribute to business operation and management. They can also divide the business duties based on experience of each partner.
What Disadvantages Does Arkansas Give to a LLP?
While Arkansas offers many advantages to LLP’s, there are also some disadvantages, such as:
- Death of a Partner: LLPs are automatically dissolved upon a death of a partner even if the other partners want it to continue.
- Partners Do Not Have to Agree: In an LLP, the partners do not need to consult with one another over certain business decisions. This is why a partnership agreement is recommended before the LLP is formed to state what each partner can and cannot do.
- No IPO: LLPs cannot get money from the public and they cannot go for an IPO.
Should I Hire a Business Lawyer?
The selection of the right business entity is vital to the success and organization of an organization. Hiring local Arkansas business lawyer familiar with LLPs will help you to analyze the pros and cons of choosing a particular business entity. If you decide an LLP is right for you, a lawyer can help you draft your state’s required filing documents