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 New Venture GuideGuidelines To Licenses, Permits And Tax RequirementsBecause there is extensive cost in time, fees and red tape involved, obtaining licenses, permits, and tax requirements may be one of the last steps to take before opening a business. There are different requirements at the city, county, state and federal levels that apply to different aspects of businesses. This information is arranged by level of government. Local concerns pertain to the Little Rock/North Little Rock metro area. Inquire with local municipalities if the business is located outside of this area. An agency or board specific to a given discipline regulates many occupations and/or businesses. Make sure that the business or job function you perform is properly licensed by the appropriate regulatory agency. It is impossible to list all legal requirements for any business. This handout offers guidelines only. This is why it is so important to have experience in or knowledge of the particular business. Business research should be thorough and ongoing to keep up with regulatory changes as they occur. Ask a lot of questions. Getting Started - Local RequirementsZoning Approval & Building & Sign PermitsBefore applying for a business license, first verify that the type of business & its physical location complies with local zoning regulations. Although there is no fee associated with verifying zoning compliance, permit application fees to change zoning status vary.
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To learn more about signage for your business: Business License (also known as privilege license)After verifying zoning compliance, the next step is to apply for a business license. The application fee for obtaining a business license will vary between $50 to over $1,000 depending on the type of business and amount and kind of inventory.
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To learn more about "Starting
a Business in Arkansas": Registering a Business NameDoing Business As Certificate (DBA)Sole proprietors and general partnerships operating their business under a fictitious or assumed name must apply for a DBA certificate with the county in which the business is physically located. Contact the local county courthouse.
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Incorporating Your BusinessContact the AR Secretary of State's Office to incorporate or register a state trademark. A business is not required to incorporate. SOS employees will not give any legal advice regarding the pros and cons of incorporating.
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Determining the Legal Form of BusinessBe sure to research and discuss the specific advantages and disadvantages of each form of ownership with a qualified accountant or attorney before you finalize your decision. The ASBDC has a useful document called "Choosing the Business Legal Structure" that can be downloaded using the web site below. If incorporating, contact the Arkansas Secretary of State's office. Incorporating can be done using the Secretary of State's on-line services, as well as by searching their database of incorporated businesses to see if the business name is available. (Use the URL address referenced in the "Incorporating Your Business" section.) If a business files and never does business as a corporation, the business is still responsible for annual franchise taxes. The fee to dissolve a corporation is $50 plus the current year's franchise taxes. To learn more: http://asbdc.ualr.edu/bizfacts/1029.asp Business Property AssessmentA business owner must assess the property of the business (building, equipment and furnishings, but not land). The deadline for assessing is May 31. Be sure to assess immediately if purchasing an existing business (to avoid liability, make sure there are no back taxes before buying a business). Taxes can be paid the 1st working day of March through October 10th without a penalty. There is a 10 percent penalty for missing the assessment deadline. After having completed a worksheet listing the business property by category, the assessor will generate an invoice based on the business' amount, age, and type of equipment. Don't forget to itemize leased equipment, however the owner of the equipment is the one taxed. Please contact:
Federal RequirementsEmployer Identification (EIN) NumberEmployer Identification Numbers, also known as Federal Employer Identification Numbers, are used to report withholding taxes and should be applied for 6-8 weeks prior to hiring. Apply for an EIN application (SS-4) if hiring employees, incorporating or operating a partnership, administering a Keogh plan, filing excise, alcohol, tobacco & firearms tax returns, or opening a bank account in the name of the business. A web site below is a link to downloading the SS-4 application.
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Federal Labor LawsContact the U.S. Dept. of Labor if the business' sales are over $500,000 and there are greater than 4 employees. Ask questions about child labor laws, minimum wage, Occupational Safety & health Administration, the Americans with Disabilities Act and the Family Medical Leave Act. To learn more about OSHA requirements & workplace safety: To learn more about the ADA:
ImmigrationEmployees must complete Form I-9, "Employment Eligibility Verification Form." To learn more about immigration:
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Federal Unemployment Tax (FUTA)FUTA works with state unemployment systems (see page 4). Currently, the tax rate is 6.2% and is applied to the first $7,000 in wages paid to each employee during the year. Employers may take a credit against the FUTA tax for amounts paid into state unemployment funds. If entitled to the maximum credit, the FUTA tax rate is .8%. Employers utilizing independent contractors do not pay FUTA tax on these individuals. FUTA tax deposits occur quarterly, using Form 940 or 940-EZ. Please contact:
State RequirementsState Labor LawsState labor laws apply to those employing 4 or more people and gross sales under $500,000. If sales are over $500,000, the Federal labor laws apply. Phone the Department of Labor's Little Rock office with questions concerning minimum wage, overtime, and child labor laws. Also, use the web site listed below. Please contact:
State WithholdingIf the business has employees and has already received an Employer Identification Number, register with the state for a state withholding information packet. Use Form AR4ER, obtained from the office or web site below.
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Sales and Use TaxTo apply for a permit, submit an application along with a $50 non-refundable fee to the location referenced below. For more information on sales and use tax, or to download the booklet "Starting a New Business in Arkansas"(included in this Guide), log onto the web sites listed below.
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Local TaxesThere are more than 275 local taxes in Arkansas. Local municipalities (cities & counties) define their respective tax rates, so it's a good idea to become familiar with local taxing authorities. To learn more, log onto: http://www.accessarkansas.org/dfa/taxes/new_bus.html Depending on their location, restaurants and lodging facilities may be required to collect an additional sales tax (sometimes referred to as a "hamburger" tax) that is remitted to local advertising & promotion commissions. Please contact:
Insurance RequirementsState Unemployment InsuranceCall the Arkansas Employment Security Department to register the business' Employer Identification Number.
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Worker's Compensation InsuranceApplies to businesses with 3 or more employees, less depending on the type of business. Proprietors and partners do not count as employees; however, all members of corporations do count as employees. Contact a registered insurance agent.
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Arkansas Special Licenses, Permits and InspectionsOccupational LicensesTo research the regulations that apply to specific occupations in Arkansas, refer to the Directory of Licensed Occupations, available at the ASBDC Research Center. Search a database of Arkansas occupations using the web site listed below. Please contact:
Restaurant and Food ServicesContact the state or the county sanitarian, an on-site inspector of restaurants and food preparation facilities. Anyone in food services, such as food processing, restaurants, caterers, mobile food units, convenience stores and bed and breakfasts must have their kitchen plans approved before establishing these businesses. These rules also apply to home-based businesses. Please contact:
Permit to Serve AlcoholThe Alcoholic Beverages Control Division (ABC) conducts a 4-hour educational seminar twice monthly. Applicants are required to attend before a permit is issued. Plan to attend even if buying a business with an existing permit. Permit fees range from $40 to $1000, plus a federal occupational tax of approximately $250. Please contact:
Permit to Sell Cigarettes, Tobacco, Amusement, and Vending MachinesCall to apply for special permits to sell these types of goods or to operate amusement or vending machines. Please contact:
Adult or Senior Day CareCall to receive packet of regulations. Please contact:
Child CareCall to receive packet of regulations. Please contact:
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