MaxFilings offers transparent, competitive pricing that covers all Arkansas fees and charges to form a C corp, with no hidden fees catching you off guard. The law views an Arkansas C corp as a distinct entity that’s separate from its owners and has similar rights to an individual.

An Arkansas C corp protects shareholders by creating limited liability of their personal assets from business debts and legal actions. This safeguard is a primary motivation for Arkansas business owners to incorporate. Typically, shareholders can’t lose more than their initial investment. Even in bankruptcy, their personal assets like homes, cars, and bank accounts remain untouched. However, there are exceptions to this limited liability, such as cases of corporate misconduct or fraud.

Arkansas C corp taxation

Shareholders of an Arkansas C corp do not report the company’s income and expenses on their personal tax returns. Instead, the corporation handles its tax returns and pays taxes, often at lower rates than individuals. Shareholders report and pay personal income taxes only on the money they receive from the corporation.

Shareholders must also pay personal income taxes on dividends from a C corp, even if the corporation has already paid taxes on this income. This is called “double taxation.”

Why should you form an Arkansas C corp?

An Arkansas C corp is ideal for  limited liability, a structured business setup, tax advantages, asset accumulation within the business, or simplified capital raising.

MaxFilings will assist you in the process of filing official documents with the state in order to form your Arkansas C corp.

Considerations for forming an Arkansas C corp

• State documents and fees are required to form an Arkansas C corp.
• A C corp is a distinct entity that is separate from its shareholders.
• The state does not restrict the number of shareholders for a C corp.
• A C corp is required to keep minutes of shareholder and board of directors meetings. 
• There are certain limitations on the types of business activities a C corp may undertake. 

Limited liability

• An Arkansas C corp provides limited liability for shareholders, which limits their losses to their initial investment. 
• Shareholders are typically not responsible for the corporation’s legal judgments, debts or obligations. 
• A key reason for business owners to choose a C corp structure is that it safeguards personal assets. 

Although most liability is protected, there are some exceptions when a shareholder could be held liable.

Raising capital

• An Arkansas C corp can efficiently raise capital through the issuance and sale of stock and other financial instruments.
• Arkansas stock sales are subject to both state and federal securities laws. 
• Ownership is transferred through sale of corporate stock.

Taxation

• Arkansas C corp typically face fewer audits compared to sole proprietorships and partnerships.
• These corporations file tax returns and pay income taxes, often at lower rates, which enables profit accumulation.
• Shareholders of Arkansas C corps encounter double taxation, paying personal income taxes on corporate dividends.
• This structure can help reduce owners’ self-employment taxes.

Owners & employees

• An Arkansas C corp owner is considered an employee, which makes them eligible for fringe benefits like group insurance, retirement plans, and stock incentives.
• Employees often favor corporations that offer stock options and bonuses.
• An Arkansas C corp is perpetual, continuing even after the death of a shareholder, unlike some other types of businesses.

Public perception

• The general public normally thinks of corporations as being more substantial than sole proprietorships and partnerships.

Our goal is to provide you with a comprehensive overview of Arkansas C corps, and we strive for the highest level of accuracy in all the information we present. At MaxFilings, we understand the importance of staying informed and up-to-date. Should you have any questions or need clarification, our team of experts is just a phone call away. 

Steps to forming an Arkansas C corp

Forming a C corp in Arkansas involves several steps, including registering your business with the Arkansas Secretary of State’s office. Here’s a step-by-step guide to help you through the process:

1. Choose a business name

Select a unique and distinguishable name for your corporation. Ensure the name complies with Arkansas naming rules and is not already being used. You can check name availability on the Arkansas Secretary of State’s website.

2. Appoint directors

A C corp must have at least one director. Directors are responsible for managing the corporation’s affairs. You should also select officers that include a president, secretary, and treasurer.

3. File Articles of Incorporation

Prepare and file Articles of Incorporation with the Arkansas Secretary of State. You can do this online or by mail.Include essential information like the corporation’s name, purpose, registered agent’s name and address, number of authorized shares, and the names and addresses of initial directors.

4. Appoint a registered agent

Designate a registered agent who will be responsible for receiving legal documents on behalf of the corporation. The agent must have a physical address in Arkansas.

5. Create corporate bylaws

Draft corporate bylaws that outline the internal rules and regulations for your corporation. This document should include shareholder meetings, director responsibilities, and officer roles.

6. Hold an organizational meeting

Conduct an initial board of directors meeting to adopt bylaws, appoint officers, and issue stock certificates if applicable.

7. Obtain an EIN (Employer Identification Number)

Apply for an EIN from the IRS either online or by submitting Form SS-4. This number is necessary for federal tax purposes.

8. Register for state taxes

Depending on your business activities, you may need to register for state taxes in Arkansas, including sales tax, income tax withholding, and unemployment insurance tax. Visit the Arkansas Department of Finance and Administration website for more information.

9. File initial report

Arkansas requires corporations to file an Initial Annual Report with the Secretary of State within 30 days of incorporation. This report confirms your corporation’s officers and directors. You can complete this filing online.

10. Business licenses and permits

Check with local and state authorities to determine if your corporation needs specific licenses or permits to operate legally in Arkansas.

11. Open a business bank account

Set up a business bank account for your corporation to separate personal and business finances.

12. Consider legal and financial

It’s often wise to consult an attorney and an accountant to ensure you meet all legal and financial obligations.

How long does it take to get articles of incorporation in Arkansas?

The Division typically processes various filings, including articles of incorporation, amendments, mergers, or dissolutions, within two business days of receipt. Some filings can be processed immediately if the filer appears in person.