Key Takeaways
- $50 Articles of Incorporation filing fee (DN-01) paid to the Arkansas Secretary of State Business and Commercial Services
- Minimum 3 directors required (Ark. Code Ann. § 4-27-803)
- Annual Franchise Tax Report (Corporation Franchise Tax Report (online at sos-franchise.ark.org)) due within by May 1 of the year after incorporation, $150 minimum franchise tax fee; $25 penalty plus 10% annual interest, and eventual revocation of the charter late penalty
- Franchise tax: 0.3% of outstanding capital stock, $150 minimum (flat $300 if no authorized stock), filed with the Secretary of State by May 1 — not with the Department of Finance
- Registered Agent with a physical Arkansas street address required
- No publication requirement
- S-Corp election available via IRS Form 2553 within 75 days of formation; the $150 minimum franchise tax still applies
- Same-day filing available through LLC Attorney at no markup on state fees
Forming a corporation in Arkansas means filing Articles of Incorporation (Form DN-01) with the Arkansas Secretary of State, paying a $50 filing fee, and naming a board that defaults to three directors but scales down to match a smaller shareholder count. Ongoing, the corporation owes an annual franchise tax of 0.3% of its outstanding capital stock — a $150 minimum — filed with the Secretary of State by May 1. This guide walks through every step and cost of forming an Arkansas C-Corporation, with professional formation available through LLC Attorney starting at $49.
C-Corp vs LLC in Arkansas
Most first-time business owners in Arkansas reach for an LLC, and for good reason — it is simpler and cheaper to maintain. An Arkansas corporation earns its keep in narrower cases, such as when you plan to raise outside equity, grant stock options, or want the formal board-and-officer governance that investors and some lenders expect.
Choose a Arkansas corporation when:
- You plan to raise venture capital or institutional investment. VC firms, angels, and most institutional investors require a C-Corp structure before they write a check. Preferred stock, convertible notes, SAFEs, and board governance by class are native to corporations, not LLCs.
- You want to issue stock options to employees (ISOs). Corporations issue stock; LLCs issue membership interests. ISO and NSO option plans are available to corporations but not to LLCs.
- You expect to eventually go public or sell to a public company. Public markets operate on corporate stock mechanics.
- You are in a regulated industry where corporate structure is required or expected by licensing boards, government contracts, or institutional counterparties.
Stick with an LLC when:
- You are a small business with one or a few owners who will not need institutional investment.
- Pass-through taxation without payroll complexity is the priority.
- You do not need stock option plans or institutional investment mechanics.
Why and when to incorporate in Delaware vs your home state
Delaware is the default for startups on a venture track. Institutional investors expect it, term sheets assume it, and the Court of Chancery resolves corporate disputes faster than any general trial court. If you are raising a priced round or structuring for QSBS eligibility, incorporate in Delaware.
If you are not raising outside capital, Arkansas is usually the better choice. A Delaware corporation operating in Arkansas still has to register as a foreign corporation there, pay Arkansas fees, and file a Delaware franchise tax return each March 1. That is duplicate overhead with no benefit for a business that will not seek institutional investment.
What's Unique About Corporations in Arkansas?
What sets Arkansas apart for corporations is where the money goes and how the tax is calculated. The corporate franchise tax is filed with the Secretary of State (not the Department of Finance, which handles the LLC version), and it is assessed at 0.3% of outstanding capital stock rather than as a flat fee, with a $150 floor. The board-size rule is equally distinctive: Arkansas presumes three directors but expressly scales that down to match a smaller shareholder count, so the structure flexes from a one-person corporation up to a full board without amending the statute's default.
Key Arkansas-specific requirements:
- Articles of Incorporation (not "Articles of Organization" — that is the LLC filing document)
- Three-director default that scales down to match shareholder count (Ark. Code Ann. § 4-27-803) — a single-shareholder corporation may have just one director
- Franchise tax: 0.3% of outstanding capital stock, $150 minimum (flat $300 if no authorized stock), filed with the Secretary of State by May 1 — not with the Department of Finance
- Corporate franchise tax is filed with the Secretary of State at sos-franchise.ark.org — the opposite of the LLC version, which goes to the Department of Finance
- Franchise tax assessed at 0.3% of outstanding capital stock — capital structure, not a flat fee, drives the bill above the $150 minimum
Selecting a Name for Your Arkansas Corporation
Your corporation's name must comply with Arkansas naming requirements:
- Must include "Corporation," "Incorporated," "Inc.," "Corp.," or another Arkansas-approved designator (Ark. Code Ann. § 4-27-401)
- Must be distinguishable from all existing Arkansas entities in the Arkansas business entity search
- the name must contain Corporation, Incorporated, Company, or Limited, or one of the abbreviations Corp., Inc., Co., or Ltd. (or a like-import word in another language)
- Names implying government affiliation or banking activity are restricted
Search the Arkansas business entity search at sos.arkansas.gov before filing. Your name search is not a reservation — the name can be registered by another filer while you prepare your Articles of Incorporation.
Name reservation: file a name reservation with the Arkansas Secretary of State Business and Commercial Services, $22.50 fee, holding the name for 120 days. Recommended if your paperwork takes more than a few days to prepare.
Directors, Officers, and Shareholders in a Arkansas Corporation
A Arkansas corporation has three distinct roles:
Shareholders own the corporation. They hold stock and vote on major decisions — electing directors, approving mergers, authorizing major asset sales. Shareholders do not manage day-to-day operations.
Directors govern the corporation through a Board of Directors. They set strategic direction, authorize major transactions, and oversee management. Arkansas's director requirements: Arkansas sets the default board at no fewer than three directors, but lets the number drop when there are fewer shareholders of record — a corporation with one shareholder may have a single director, and a two-shareholder corporation may have two (Ark. Code Ann. § 4-27-803). Directors do not have to be Arkansas residents or shareholders, and the board size is fixed in the articles or bylaws.
Officers (CEO, CFO, Secretary, etc.) manage day-to-day operations. Officers are appointed by the Board of Directors. Arkansas requires the officers described in its bylaws, with the same person permitted to hold multiple offices including president and secretary. Because Arkansas drops the three-director floor to match a smaller shareholder count, a single owner can be the only shareholder, the only director, and hold every officer position at once.
Designating a Registered Agent
Every Arkansas corporation must designate a Registered Agent — a person or entity with a physical Arkansas street address who receives legal notices, lawsuits, and official state correspondence on behalf of your corporation.
Every Arkansas corporation must continuously maintain a registered agent with a physical street address in Arkansas (Ark. Code Ann. § 4-27-501); a P.O. box or mail drop will not satisfy the requirement. The agent must be available during normal business hours to accept service of process and official correspondence from the Secretary of State. An individual agent must reside in Arkansas, or you may appoint a commercial registered-agent company authorized to do business in the state.
If the Arkansas Secretary of State Business and Commercial Services cannot deliver legal notices to your Registered Agent, Arkansas can administratively revoke the charter of your corporation. LLC Attorney's Arkansas Registered Agent service is $125/year.
Arkansas Corporation Costs and Compliance
How to Form a Corporation in Arkansas
If You Do It Yourself
Step 1 — Choose a corporate name that complies with Arkansas's requirements.
Your corporate name must be distinguishable from all existing Arkansas entities and include an approved corporate designator ("Inc.," "Corp.," "Corporation," "Incorporated," or as specified in Ark. Code Ann. § 4-27-401). Search the Arkansas business entity search at sos.arkansas.gov before preparing any documents. Searching the Arkansas entity database at sos.arkansas.gov confirms a name is available to register, but it does not clear trademark rights — run the name against the USPTO database separately before you build a brand on it.
Step 2 — Reserve your corporate name (recommended).
File a name reservation with the Arkansas Secretary of State Business and Commercial Services, $22.50 fee, good for 120 days. If you are not filing immediately, this prevents another entity from taking your name while you prepare documents.
Step 3 — Decide your director structure before opening the formation form.
Arkansas requires 3 directors at formation. Count your actual shareholders first, then set your board to match. If you are a solo founder, the statute lets you serve as the lone director; the three-director default only binds you once you have three or more shareholders of record. Set the number in the bylaws so the board size tracks your cap table rather than the statutory floor. Write down your director names and Arkansas addresses before you open the form — most state portals cannot save a partially completed filing.
Step 4 — Designate your Registered Agent.
Every Arkansas corporation must have a Registered Agent with a physical Arkansas street address. P.O. boxes are not accepted. If you have no staffed Arkansas office, a commercial registered agent keeps your home address off the public record. LLC Attorney can serve as your Arkansas Registered Agent and route every state and legal notice to your client portal.
Step 5 — Complete the Articles of Incorporation (DN-01).
Go to sos.arkansas.gov and use the current version of the Articles of Incorporation. Always file directly through the Arkansas Secretary of State Business and Commercial Services — outdated forms are rejected without refund. Complete it with:
- Your exact corporate name including designator
- Your Registered Agent — full legal name and physical Arkansas street address
- Your authorized share structure — keep the authorized share count modest because Arkansas calculates the corporate franchise tax at 0.3% of your outstanding capital stock, so a lean cap table holds you to the $150 minimum
- Director names and addresses
- Incorporator signature (the person submitting the form; need not be a director or shareholder)
- The number of authorized shares and the par value or statement that shares have no par value (Arkansas requires the share structure on the Articles)
Step 6 — File the Articles of Incorporation and pay the $50 fee.
File online at sos.arkansas.gov or by mail to the Arkansas Secretary of State Business and Commercial Services in Little Rock. Online processing is 1 to 3 business days for online filings under normal volume.
Step 7 — Wait for your approved Articles of Incorporation.
Your corporation does not legally exist during the review period. You cannot open bank accounts, sign contracts as the corporation, or issue stock until the Arkansas Secretary of State Business and Commercial Services approves your filing. Standard processing is 1 to 3 business days for online filings; 2 to 4 weeks for mail filings, and longer during high-volume periods during peak filing season. Keep your approved Articles of Incorporation — every bank, licensing board, and counterparty will request it.
Step 8 — Hold your organizational meeting and adopt bylaws.
After approval, your Board of Directors must hold an organizational meeting (or sign a written consent in lieu of meeting) to adopt bylaws, elect officers, authorize the bank account, authorize stock issuance, and set the fiscal year. Arkansas does not require bylaws to be filed with the Secretary of State — keep them with your corporate records. Under the Arkansas Business Corporation Act, the initial board or incorporators adopt the bylaws after filing. Arkansas defaults to a three-director board unless your shareholder count is lower, so spell out your actual board size, quorum, and officer roles in the bylaws rather than leaving the statutory minimum to govern by accident. A generic template may omit Arkansas-specific provisions and may not align with your share structure.
Step 9 — Issue stock to founders.
Authorize and issue shares to founders immediately after your organizational meeting. Document the issuance in your stock ledger and issue stock certificates (or maintain uncertificated share records). Each founder's share count and issuance price must be documented. Unlike Delaware, Arkansas ties the franchise tax to outstanding capital stock rather than authorized shares, so over-authorizing alone does not inflate the bill. What drives the tax up is issuing and paying in large amounts of stock. A common structure is a single common class with a low stated par value, leaving headroom to issue founder and option shares without crossing the threshold where the 0.3% calculation exceeds the $150 floor.
Step 10 — File your initial Annual Franchise Tax Report (Corporation Franchise Tax Report (online at sos-franchise.ark.org)) within by May 1 of the year after incorporation.
After your Articles of Incorporation is approved, you have by May 1 of the year after incorporation to file Corporation Franchise Tax Report (online at sos-franchise.ark.org) with the Arkansas Secretary of State Business and Commercial Services. This filing confirms your Registered Agent address, principal office address, and director and officer contact information. Filing fee: $150 minimum franchise tax. Missing the deadline triggers a $25 penalty plus 10% annual interest, and eventual revocation of the charter penalty.
Step 11 — Apply for your federal EIN.
Your corporation needs an EIN to open a bank account, hire employees, and handle tax filings. Apply at irs.gov/ein. Free, no government filing fee. Available Monday through Friday, 7 a.m. to 10 p.m. Eastern. 15-minute inactivity timeout — have all information ready before starting. International incorporators without a U.S. SSN or ITIN must apply by phone (IRS Form SS-4, 267-941-1099).
Step 12 — Open a corporate bank account.
Required documents: your approved Articles of Incorporation, your EIN confirmation letter (IRS Form CP 575 or SS-4 approval), your adopted bylaws, a board resolution authorizing the account, and personal ID of authorized signers. Call ahead — bank requirements for corporations are more involved than for LLCs.
Step 13 — Register for Arkansas state taxes.
Your federal EIN does not automatically register you with Arkansas state agencies. Depending on your business type:
- Arkansas sales and use tax (Arkansas Department of Finance and Administration, if you sell taxable goods or services) — dfa.arkansas.gov
- Arkansas employer payroll taxes (Arkansas Division of Workforce Services, if hiring Arkansas employees) — dws.arkansas.gov
- Arkansas Sales and Use Tax registration with the Department of Finance (atap.arkansas.gov) if you sell taxable goods or services in Arkansas
Step 14 — Pay your Arkansas annual tax.
Arkansas's corporate franchise tax is governed by the Arkansas Corporate Franchise Tax Act (Ark. Code Ann. § 26-54-101 et seq.) and is due by May 1 each year. For a stock corporation the tax is 0.3% of the corporation's outstanding capital stock, never less than $150; a corporation without authorized capital stock instead pays a flat $300. File and pay online through the Secretary of State at sos-franchise.ark.org. This is the one place Arkansas corporations and LLCs diverge sharply: LLC franchise tax runs through the Department of Finance, but corporate franchise tax stays with the Secretary of State, so make sure you are filing in the right system.
Step 15 — Decide whether to elect S-Corp tax treatment.
C-Corporation income is taxed twice: once at the corporate level (federal rate currently 21%), and again when distributed to shareholders as dividends. An S-Corp election converts the corporation to pass-through taxation. S-Corp election is available for Arkansas corporations that meet IRS eligibility: 100 or fewer shareholders, all U.S. citizens or residents, only one class of stock, and no institutional or foreign shareholders. File IRS Form 2553 within 75 days of formation. The election is made with the IRS — it does not require any Arkansas filing. Arkansas recognizes the federal S-Corp election, but it requires a separate state-level step: after filing federal Form 2553, the corporation files Arkansas Form AR1103 with the Department of Finance and Administration to elect Subchapter S treatment for state income tax, and the S-Corp then files Form AR1100S. Arkansas honors the election only if the corporation has elected S status federally for the same tax year. Note that the S-Corp election affects income tax treatment only — the corporation still owes the same $150 minimum franchise tax to the Secretary of State.
Step 16 — Set annual compliance reminders.
Arkansas corporations must file and pay on a recurring basis:
- Annual Franchise Tax Report (Corporation Franchise Tax Report (online at sos-franchise.ark.org)): Annually by May 1, $150 minimum franchise tax fee — $25 penalty plus 10% annual interest, and eventual revocation of the charter if missed
- Franchise tax: due May 1 each year; 0.3% of outstanding capital stock with a $150 minimum, filed and paid online with the Secretary of State at sos-franchise.ark.org
Missing these filings puts your corporation in bad standing with the Arkansas Secretary of State Business and Commercial Services and Arkansas Department of Finance and Administration. Suspension means you cannot file documents, defend lawsuits, or do business in Arkansas. If you would rather not manage this process, the service handles Arkansas corporation formation starting at $49.
If LLC Attorney Does It for You
- Submit your information at llcattorney.com — corporate name, director structure, authorized shares, Registered Agent preference, fiscal year, and target formation date. No forms to find or download.
- LLC Attorney files your Articles of Incorporation with the Arkansas Secretary of State Business and Commercial Services, drafts your bylaws, handles your organizational meeting consent, issues your stock ledger documentation, applies for your EIN, and covers same-day filing if needed. Your Registered Agent designation and initial Annual Franchise Tax Report are included.
- Receive your approved Articles of Incorporation, bylaws, organizational consent, stock documentation, and EIN confirmation through your LLC Attorney client portal. Annual compliance reminders are included so you never miss a Corporation Franchise Tax Report (online at sos-franchise.ark.org) deadline or annual tax payment.
S-Corp Election for Arkansas Corporations — What You Need to Know
An S-Corp election is not a separate entity — it is a federal tax election made by an existing corporation. Your Arkansas corporation remains a Arkansas corporation; you are only changing how the IRS taxes it.
The S-Corp tax advantage: a C-Corp pays 21% federal corporate income tax on net income, and shareholders pay income tax again on dividends. An S-Corp passes income directly to shareholders' personal returns, skipping the corporate-level tax. For owner-operated businesses with consistent profitability above roughly $40,000/year, the S-Corp election typically produces material tax savings.
S-Corp payroll requirement: if you elect S-Corp status and work in the business, you must pay yourself a "reasonable salary" subject to payroll taxes. The savings come from income above that salary, which passes through without payroll tax. Skip the salary and the IRS can reclassify your distributions as wages and assess back payroll taxes plus penalties.
Eligibility requirements:
- 100 or fewer shareholders
- All shareholders must be U.S. citizens or permanent residents
- Only one class of stock (identical distribution and liquidation rights)
- No institutional shareholders, partnerships, or non-resident alien shareholders
Arkansas treatment of S-Corps: Arkansas recognizes the federal S-Corp election, but it requires a separate state-level step: after filing federal Form 2553, the corporation files Arkansas Form AR1103 with the Department of Finance and Administration to elect Subchapter S treatment for state income tax, and the S-Corp then files Form AR1100S. Arkansas honors the election only if the corporation has elected S status federally for the same tax year. Note that the S-Corp election affects income tax treatment only — the corporation still owes the same $150 minimum franchise tax to the Secretary of State.
Filing deadline: IRS Form 2553 must be filed within 75 days of formation, or by March 15 of the tax year for which you want the election effective. Late elections are sometimes accepted with a written explanation of reasonable cause.
When Should You Consult an Attorney for Your Arkansas Corporation?
LLC Attorney provides on-demand attorney consultations for a flat rate per 30-minute session — no retainer required. Corporation formation benefits from attorney guidance more than most entity types because of share structure, bylaw complexity, and S-Corp election timing. Common scenarios:
- Multiple founders or investors: share structure decisions made at formation (authorized shares, classes, par value) affect every future financing round and exit. A misstructured cap table is expensive to unwind.
- S-Corp election analysis: whether to elect depends on projected net income, payroll requirements, and state-level S-Corp recognition. The payroll requirement catches founders off guard.
- High-liability industry: regulated industries may have specific corporate structure requirements from licensing boards or insurance carriers.
- Raising capital: if you plan to raise institutional capital, your share structure, option pool, and Delaware vs. home-state decision should be reviewed before you file.
- Arkansas-specific wrinkles: Arkansas may have corporate law provisions a generic national template does not cover correctly.
What You Actually Get When You Incorporate in Arkansas with LLC Attorney
An Arkansas corporation that has only been filed with the state is not a working corporation yet. The Secretary of State filing creates the legal entity, but it does not produce the bylaws, organizational consents, or stock records that actually let the corporation function and that keep its liability shield standing. A "$0 filing" that skips those is not free — it is half-built, and in Arkansas a half-built corporation is the one that cannot prove who its directors are or that its stock was ever validly issued.
Included with LLC Attorney corporation formation, starting at $50:
- Same-day or 24-hour Arkansas filing at no markup on the state fee. Most services charge extra to expedite.
- Attorney-drafted bylaws, initial board consent, and organizational minutes — customized, not auto-generated templates.
- Initial stock issuance and cap-table setup, so your ownership is documented correctly from day one.
- Federal EIN, obtained for you.
- Arkansas Registered Agent service at $125/year, included to keep you in good standing.
- S-Corp election guidance when pass-through tax treatment is the right call for your situation.
- Access to attorney-trained Business Success Advisors at no charge, plus optional flat-fee attorney consultations (no retainer).
Because Arkansas's franchise tax is driven by your capital structure and its board size flexes with your shareholder count, getting the share count, bylaws, and director set-up right at formation is exactly what keeps the annual cost at the $150 minimum — and that is what is included here.
Starting Your Arkansas Corporation with LLC Attorney
Arkansas's corporate formation requirements are inexpensive but have a few traps — the share-based franchise-tax calculation, the three-director rule that scales with shareholder count, and the separate state S-Corp election on Form AR1103. Getting your directors, share structure, bylaws, and initial compliance filings right at formation prevents expensive corrections later.
The service handles Arkansas corporation formation starting at $49. Same-day filing is available at no markup on state fees. On-demand attorney consultations in 30-minute increments — no retainer — cover bylaws drafting, S-Corp election analysis, Arkansas capital-structure planning and the state S-Corp election, and annual tax planning. See our full pricing for all service tiers.
Frequently Asked Questions
Online Articles of Incorporation filed at sos.arkansas.gov are typically processed in 1 to 3 business days, while mailed filings take 2 to 4 weeks and longer during peak periods. Arkansas does not offer a formal paid expedited tier, so online filing is the fastest route. LLC Attorney files your Arkansas corporation online to capture the quickest available turnaround.
A C-Corp and an S-Corp are the same Arkansas corporation — the difference is federal tax treatment only. A C-Corp pays corporate income tax at the entity level (21% federal rate), and shareholders pay personal income tax again on dividends. An S-Corp elects pass-through taxation — income flows to shareholders' personal returns without corporate-level tax. The election is made with the IRS via Form 2553 and has no impact on your Arkansas formation documents. Arkansas requires its own S-Corp election on Form AR1103 in addition to the federal Form 2553, so confirm both are filed if you want pass-through treatment at the state level.
Yes. Arkansas's three-director default applies only when a corporation has three or more shareholders of record; with a single shareholder the board may consist of just one director (Ark. Code Ann. § 4-27-803). That lets one person own all the stock, serve as sole director, and hold the president, secretary, and treasurer roles simultaneously. You still need to observe corporate formalities — adopt bylaws, hold an organizational meeting, issue stock, and keep corporate and personal funds separate — to keep the liability shield intact.
An Arkansas C-Corp faces two distinct state obligations. First, an annual franchise tax of 0.3% of outstanding capital stock (minimum $150, or a flat $300 if the corporation has no authorized stock), paid to the Secretary of State by May 1. Second, Arkansas corporate income tax on net income under a graduated schedule that tops out at 4.3% after the 2024 rate cuts. At the federal level a C-Corp pays the 21% corporate income tax unless it elects S-Corp treatment, in which case income passes through to shareholders.
Arkansas corporations file a combined Annual Franchise Tax Report each year by May 1, and for corporations this is filed with the Secretary of State rather than the Department of Finance. Stock corporations pay 0.3% of their outstanding capital stock with a $150 minimum; corporations with no authorized capital stock pay a flat $300. You file and pay online at sos-franchise.ark.org. Missing the May 1 deadline adds a penalty plus interest and, if left unpaid, leads the Secretary of State to revoke the corporation's charter.
Arkansas does not require corporations to file bylaws with the Secretary of State. However, bylaws are a legal requirement for corporate governance — they define how your board operates, how shareholder meetings work, how officers are appointed, and how major decisions are made. A corporation without bylaws is technically non-compliant and lacks the foundational document that governs all major corporate decisions. Every bank, investor, and serious counterparty will request your bylaws.
If you miss the May 1 franchise-tax deadline, Arkansas assesses a late penalty plus interest on the unpaid franchise tax. Continued non-payment causes the corporation to fall out of good standing, and the Secretary of State can ultimately revoke the corporation's charter. A revoked corporation loses the legal authority to transact business and must pay all back franchise taxes, penalties, and interest to be reinstated.
Yes. An Arkansas corporation can convert to an LLC by filing a statutory conversion with the Secretary of State at sos.arkansas.gov. The conversion is a taxable event for federal purposes and can trigger gain recognition, so model the consequences with a CPA before converting — depending on your assets and basis it is sometimes cleaner to dissolve and re-form. Make sure your franchise tax account is current with the Secretary of State before you file.
If Arkansas is unable to deliver legal notices to your Registered Agent, the state can administratively revoke the charter of your corporation. This can happen without direct notice to you. A professional Registered Agent service ensures a qualified person is available during business hours at a physical Arkansas address to receive any legal documents on your behalf.