Want to start a small business in Arkansas? You may need to obtain one or more state licenses or permits, or complete one or more types of state registration, as part of the start-up process. Here’s a quick look at some of the key information resources available and some of the steps you may need to take.
Arkansas Small Business Information
The Arkansas Department of Finance and Administration (DFA) publishes Starting a New Business: An Educational Brochure for Arkansas Taxpayers. The booklet provides information on various taxes applicable to Arkansas businesses. It also includes contact information for major state agencies. You can download a copy of the brochure from the FDFA website.
The Arkansas Small Business and Technology Development Center (ASBTDC) has guidance on starting and growing your business. This includes individualized confidential counseling and free market research. The ASBDTC also publishes a very useful guide, Arkansas Small Business License, Permit and Taxes. You can download a copy of the guide from the ASBTDC website. The ASBDTC is part of a national network of small business development centers.
The U.S. Small Business Administration (SBA) has a district office in Little Rock. The office website lists upcoming events, resources, and news for small businesses. The SBA also publishes an Arkansas Specific Resource Guide for Small Businesses that you can download from the SBA website.
Get one or more commercial licenses
Not every business in Arkansas needs a license. However, many types of businesses can or must obtain one or more licenses or permits. Some of these permits and licenses are issued by the state. Examples include restaurant and food service licenses, contractor licenses, and child care licenses. Different licenses and permits are issued by different state agencies, such as the Department of Health or the Arkansas Contractor Licensing Board. See the ASBTDC guide above for more details.
You may also need one or more professional or occupational licenses issued by the state (see below).
In addition to state licenses, some of the required permits and licenses are issued locally. This may include zoning permits and local commercial licenses. Requirements and license names will vary depending on the city or county in question. The city of Little Rock, for example, has its own licensing requirements. Please note that you may need a license for each city or county in which you do business. More details can be found on each city and county website. (Some businesses may be exempt from local licensing requirements under state or federal law.)
File records for your business form
Beyond obtaining the required licenses or permits, some legal forms of business, such as corporations and limited liability companies (LLCs), are required to file records with the state. More specifically, corporations, LLCs, and certain other types of businesses must file organizational documents with the Arkansas Secretary of State (SOS). See the Corporations section of the SOS website for more details.
Obtain Professional Licenses
If you are a member of one of the many professions and occupations, you will need a license from the State of Arkansas. The Professional Licenses section of arkansas.gov, the state government’s main website, has a list of licensed occupations and professions. The list also includes many items that are not related to the licensed professions. However, by clicking on a profession on the list, you will be taken to a state regulatory board website for that profession.
Example: Garrett wants to work as a licensed real estate agent. You will need to apply for a license through the Arkansas Real Estate Commission. He can find detailed information and a copy of the license application by clicking on the Real Estate Agent link in the Professional Licenses section of the arkansas.gov website.
Register a fictitious or assumed trade name
Many small businesses do not simply operate under the names of their owners. Instead, they operate under a trade name. In addition, some businesses, such as corporations and LLCs, may originally register with the state under one name (sometimes called the registered name, real name, or real name), but later choose to operate under another name. Depending on where you are doing business and how your business is structured, this alternative trade name can technically be known as a false name, a fictitious name, a trade name or a DBA (for “doing business as”). In Arkansas, most businesses that intend to operate under a fictitious name must register the name with SOS. In addition, most businesses must also file a false name or DBA certificate with the county clerk in any county where the business is conducted. For more information, see the Business Services FAQ section of the SOS website.
Example: Albert originally organized his auto repair business as an Arkansas corporation called Albert Fayetteville Garage, Inc. Now wants to operate the business under the name Oscar Foreign Auto Repair, Inc. Albert must file a fictitious name application, including filing fee, with SOS. He must also file a DBA certificate, including the filing fee, with the Washington County Clerk.
Register a trademark or service mark
There are separate legal definitions for trademarks, service marks and trade names. However, in very general terms, trademarks, service marks and trade names are used to uniquely identify products (products), services or a company. This includes distinguishing a product, service or business from potential competitors. Trademarks and service marks may be registered with the state. (This is different from the federal registration.) More information can be found in the Trademarks/Services section of the SOS website.
Example: Henry wants to sell his coffee and cocoa chocolates under the name “Henry’s Cocoa Bars”. So, after verifying that the name is no longer in use, he files an application for registration of a trademark or service mark, including the filing fee, with the SOS.
Arkansas Business Resources
1) Arkansas Tax Records
When starting a small business in the state of Arkansas, you should first look for and apply for licenses, permits, or identification numbers that match the types of services you offer. Some taxes that commonly apply to businesses include withholding, sales and use tax, and unemployment insurance tax. Depending on the nature of your business, additional taxes, such as franchise tax and fuel tax, may also apply. Visit the Arkansas Department of Finance and Administration’s Income Tax page for more information. The page includes press releases, a calendar of tax-related events, and contact information for offices that can help you with your tax concerns.
You can only visit the Arkansas.gov Tax Center page, which includes county-specific information on tax payments.
2) Business licenses
The State of Arkansas requires that occupations and businesses acquire appropriate permits and licenses prior to rendering services. The cost and type of license you need will depend on the nature of your business. For example, landscape architects, barbers, pharmacy technicians, sports coaches and social workers will need to obtain different professional licenses. Visit Arkansas.gov’s Professional Licensing page for a list of possible licenses. You can search for specific licenses and then choose to apply or renew.
3) Local permits
The local government in your area, such as your city or county, may require specific permits and licenses. Each municipality may have its own regulations. These are some of the most common licenses and permits you may need.
- Alarm Permit
- Construction Permit
- ealth Permit
- Occupational Permit
- Occupational Permit
- Signaling Permission
- Zoning permit
4. Incorporation record
Arkansas businesses operating as corporations, non-profit organizations, limited liability companies and partnerships must register with the Arkansas Secretary of State. Electronic forms and general incorporation filing information are available on the Business and Commercial Services page of the Arkansas Secretary of State’s website.
If you want your business to take the form of a sole proprietorship, the law does not require you to register with the Secretary of State. However, in a sole proprietorship, the business name takes the form of the personal name of the owner and the owner must assume personal responsibility for debts and claims related to the business.
5) Doing Business as an Owner or Company
A sole proprietorship or partnership that intends to use a name other than the personal name of the owner must apply for a fictitious name through a process called Doing Business As. You can file a Certificate of Doing Business Under an Assumed Name at any local county office.
In addition to registering with the county clerk, national corporations must also register fictitious names with the Arkansas Secretary of State.
6) Income tax withholding
After the 4th quarter of the year filing process, Arkansas employers must keep records of employment tax information for the next four years or more. Here are some examples of the items that must be included in their records:
Your Employees’ Personal Information
Employer identification number and other relevant employer information
The IRS website features a more extensive list of items worthy of its log books. Check the list to make sure your business continues to run smoothly as it grows and progresses.
Arkansas employees must submit to employers a complete copy of Form W-4, the withholding exemption certificate. The employer can then send the form to the IRS for documentation.
In addition to the withholding exemption certificate, Arkansas employers must also send Form W-2 to the Social Security Administration by the end of February. This must be done annually. Form W-2 contains information about taxes withheld and wages paid for company employees. By submitting this information electronically, the deadline is extended to the end of March. Employers must ensure that employees receive copies of Form W-2 by the end of the following January. These links will provide information and electronic requests needed to file forms W-2 and W-4:
Internal Revenue Service (IRS) Employer’s Tax Guide
7) Verification of Employee Eligibility (Form I-9)
Within three days after employment begins, new employees are responsible for completing Form I-9 and returning it to the employer. The form is proof of eligibility to work in the country. Each form must be kept on file by the employer.
The I-9 form can be found on the official U.S. Citizenship and Immigration Services website.
8) Report of new recruitments
Employers must collect and report information on new and returning employees within 20 days of starting work. This information collected will include the employee’s name, contact information, social security number, and health benefits. The employer will also have to disclose some personal information. This information should be sent to the Arkansas New Hire Reporting Center. You may register and submit information on the Reporting Center’s website.
9) Insurance requirements
If your Arkansas-based business requires employees, you face several additional tax expenses, including workers’ compensation and unemployment insurance taxes.
Workers’ compensation taxes are intended to help workers who are injured on the job. Information concerning this tax can also be found on the Arkansas Workers’ Compensation Commission’s website.
Unemployment insurance tax helps people who are willing and able to work, but are still unemployed. Visit the Employers page of the Arkansas Department of Workforce Services website for more information.