A common choice for anyone wishing to launch a business in Arkansas is to create a corporation. A company can provide liability protection and tax advantages because it is a separate legal entity from its owners. An instruction manual for creating a corporation in Arkansas is provided below: First, decide on a name for your company. Your company’s name must contain the words “corporation,” “incorporated,” “company,” or “limited.” On the website for the Arkansas Secretary of State, you may see if the name you choose is available. 2. Submit Articles of Incorporation to the Secretary of State of Arkansas. The name, registered agent, and purpose of your corporation are all listed in this document. The $50 filing fee is payable either online or by mail. 3. Acquire all required business licenses and permissions. You might need to obtain state and municipal licenses and permits depending on your industry and region. The website of the Arkansas Department of Finance and Administration has more information. Hold a formal assembly when bylaws are adopted. You will choose your board of directors, elect your officers, and adopt your corporation’s bylaws during this meeting. 5. Request from the IRS an Employer Identification Number (EIN). For tax purposes, your corporation will have a special identification number that you will use. Online EIN applications are free to submit.
Can a Sole Proprietor pay themselves? You can pay yourself as a sole proprietor from your company’s profits, yes. You must declare all income and spending on your personal tax return because your personal and corporate accounts are not distinct, so keep that in mind.
It’s a good idea to open a different bank account for your single proprietorship even though it’s not legally needed to do so. This can make it simpler for you to prepare your taxes and keep track of your company’s finances.
You must send independent contractors a 1099-MISC form if you engage them and pay them more than $600 in a calendar year. As a sole owner, you are exempt from the requirement to send a 1099 to yourself.
Any evidence that demonstrates you are the sole proprietor of a business qualifies as proof of proprietorship. This could comprise contracts with customers or suppliers, tax returns, bank statements, and business licenses. Keep thorough records of all business activity so that you may prove your proprietorship if necessary.
In a sole proprietorship, the owner is held personally responsible for all of the company’s debts and liabilities. This means that the owner’s personal assets may be at danger if the company is sued or unable to pay its debts.