Sole Proprietorship Registration in Arkansas

By Jeff Franco J.D./M.A./M.B.A.

If you plan on starting a business in Arkansas, choosing to operate as a sole proprietorship is the quickest way to get your business off the ground. This is because Arkansas doesn’t impose the same level of registration requirements on sole proprietorships that it does on other business entities, such as corporations and limited liability companies.

If you plan on starting a business in Arkansas, choosing to operate as a sole proprietorship is the quickest way to get your business off the ground. This is because Arkansas doesn’t impose the same level of registration requirements on sole proprietorships that it does on other business entities, such as corporations and limited liability companies.

Arkansas Sole Proprietorships

The great thing about starting a business as a sole proprietor in Arkansas is that you can start operations whenever you want without having to file documents or pay fees to the Arkansas Secretary of State. However, a significant disadvantage to this is that Arkansas doesn’t recognize a sole proprietorship as a separate entity, meaning that you’re personally liable for all debts and obligations of the business. In contrast, the owners of an Arkansas corporation must file articles of incorporation with the state, but after doing so, they aren’t personally liable for the debts of the corporation, as a corporation is an entity that is separate and distinct from its owners.

Ready to start your LLC? Start an LLC Online Now

Business Name Registration

When operating an Arkansas sole proprietorship, state law only allows you to conduct business in your own name. However, if you prefer to conduct business using an assumed name, commonly referred to as a DBA, you must file a “Doing Business Under an Assumed Name” certificate in the county clerk’s office of each county where you will transact business. The certificate is a simple one-page form that you must fill out and sign in the presence of a notary before filing it with the county clerk and paying the $25 fee. To illustrate, if John Smith starts an accounting business as a sole proprietor, he can only refer to his business as “John Smith.” However, if he prefers to name the business, “Smith Accounting Consultants,” he can only do so after filing a DBA certificate in each county where he intends to practice.

Arkansas Business Licenses

Despite the fact that sole proprietors don’t register their businesses, depending on the type of business you operate and the city or county where it operates, you may need to file applications for business licenses. The city of Fayetteville, for example, requires all sole proprietors that have a place of business within city limits to obtain a business license, which always requires the payment of a fee. There are a number of exemptions to this requirement, none of which apply to sole proprietors unless they are under the age of 18. Keep in mind, however, that not every city and county requires you to obtain a business license, so you will need to check with your local city or county government office.

Tax Filings

Although not technically a registration requirement, you will need to file tax returns that report your sole proprietorship income to the state and federal government. You can use the same net income you report on a Schedule C attachment to your federal return for Arkansas state income tax purposes.

Ready to start your LLC? Start an LLC Online Now
What Do You Need to File as a Sole Proprietor?

References

Related articles

How to File Your DBA in Dallas

An assumed business name, also known as a "doing business as," allows you to operate your business under a name that is not the company's legal name as recorded on your official business registration or license. State business laws require every business to use a name that distinguishes it from other companies to avoid confusion, and DBAs make that possible. In Dallas, a DBA must be registered with the appropriate office before you can use it to conduct business.

Rules and Regulations for a Sole Proprietorship

Starting your new business as a sole proprietorship is the easiest and least expensive legal business structure you can use, as opposed to forming a corporation or limited liability company. As a sole proprietor, you are the sole owner of your business and generally have the flexibility to operate your business as you see fit, subject to the rules and regulations that apply to similar businesses in your state and local area.

How to Get a Sole Proprietorship

For an independent entrepreneur, a sole proprietorship is a common business structure because it is relatively simple to set up and allows for a great deal of flexibility in management. As a sole proprietor, you are personally liable for the business, but you also retain all of the business's profits. Although there are some similarities for all sole proprietorships, business formation is determined by state law where the sole proprietorship is formed.

LLCs, Corporations, Patents, Attorney Help

Related articles

Sole Proprietorship in Kansas

When you’re the sole owner of a business in Kansas and don’t create a legal entity for it, state law ...

Forms and Fees for Registering a Sole Proprietorship in Mississippi

Starting a sole proprietorship in Mississippi is an easy way to get your business operations underway since it ...

How to Form a Simple Corporation in Florida With Forms

One of the first steps in starting your business is determining what type of business structure to use. In Florida, you ...

How to Create a Sole Proprietorship in South Carolina

If you are starting a business in South Carolina and want to operate it as a sole proprietorship, it isn’t ...

Browse by category