Are you looking to start a nonprofit corporation in Arkansas, but you’re not entirely familiar with how the formation process works?
Forming a nonprofit organization can have some tricky compliance requirements, and you don’t want to risk making any mistakes during this process. In this guide, we’ll discuss all the relevant details of forming a nonprofit corporation in Arkansas.
To get started, please reference our 11-step guide below or hire a professional online incorporation service to get started.
Rocket Tip: To see how some of the top online nonprofit incorporation services stack up, here are two of our most popular comparisons - Incfile vs LegalZoom & Northwest Registered Agent vs LegalZoom.
How to Form an Arkansas Nonprofit Corporation (in 11 Steps)
1) Name Your Nonprofit
The first step for forming a nonprofit organization in any state is to come up with a strong name for it. Remember that the name of your nonprofit is often your best opportunity to make a good first impression with people, and you should clearly describe your organization’s mission in your name.
Before you become too attached to one name idea, you should run a search of existing businesses on the Arkansas Secretary of State website. This will tell you if someone else is already using your desired name, or if it’s available for your nonprofit to use.
2) Designate an Incorporator and an Initial Board of Directors
The incorporator is the person who is responsible for preparing, signing, and filing your nonprofit’s Articles of Incorporation. This document is the form that officially creates your organization with the state of Arkansas.
At this time, you should also choose your initial board of directors.
In Arkansas, you are required to have at least three people on your initial board.
3) Designate a Registered Agent
Arkansas nonprofit corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation.
Who Can Be My Registered Agent? A registered agent must have a physical address within the state of Arkansas where mail and legal notices can be served during regular business hours. You can hire a service to act as your registered agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.
The Arkansas Secretary of State says that,
A registered agent filing must state the name of the represented entity’s commercial registered agent; or if the entity does not have a commercial registered agent, the name and address of the entity’s noncommercial registered agent…the name and address of the entity’s registered agent; or the title of an office or other position with the entity if service of process is to be sent to the person holding that office or position, and the address of the business office of that person.”
IncRocket Note: In Arkansas, you can appoint one of two kinds of registered agent: a noncommercial registered agent or a commercial registered agent. Commercial registered agents must complete their own registration process with the state.
Our Recommendation
We recommend hiring a professional registered agent service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or corporate or personal address off the public record.
Rocket Tip: You can get a free registered agent service when hiring an incorporation service to form a nonprofit corporation. See our review of Incfile and review of Northwest Registered Agent to learn more.
4) File the Articles of Incorporation
The official document required to form your nonprofit corporation with the state of Arkansas is the Articles of Incorporation--Domestic Nonprofit.
This two-page document includes all of the vital information describing the organizational structure of your nonprofit, including the following information:
- Name of your nonprofit corporation
- Purpose for which your nonprofit is organized
- Whether or not your corporation will have members
- Powers of your corporation
- How your assets would be distributed if you dissolved the nonprofit
- Name and address of your registered agent
- Name(s) and address(es) of incorporator(s)
- Signature(s) of incorporator(s)
Once you’ve finished filling out this form, you’ll need to write a check for $45 or $50 (more expensive if filing by mail) and mail it along with your Articles of Incorporation to the following address:
Arkansas Secretary of State
Business and Commercial Services
1401 West Capitol Avenue, Ste. 250
Victory Building
Little Rock, AR 72201
The Arkansas Secretary of State typically processes nonprofit corporation formations within one to two weeks of receiving your articles.
5) Acquire an EIN
According to the IRS, every nonprofit corporation should obtain a federal tax ID number, otherwise known as an employer identification number (EIN).
The EIN enables your nonprofit to hire employees, open business bank accounts, and file for 501(c)(3) tax exempt status. The process to acquire an EIN is quite simple, and includes the preparation and filing of one simple form. Obtaining an EIN is also free.
6) Establish Bylaws and a Conflict of Interest Policy
Think of the bylaws as a governing document for how your nonprofit corporation will be operated. Bylaws outline procedures for things like holding meetings, outlining your membership structure, defining your corporate purpose, describing the responsibilities of your board of directors, and other important details.
A conflict of interest arises when a contributor to your nonprofit has personal interests that compete with those of your corporation.
The conflict of interest policy protects your nonprofit in these situations. It includes a duty to disclose clause that says anyone involved with your nonprofit must disclose any financial interests and material facts to your directors. It also outlines procedures for addressing conflicts of interest if they ever arise.
7) Hold an Initial Meeting and Establish Your Corporate Record
At this point, you’re ready to hold an initial organizational meeting with your board of directors. At this important meeting, you need to elect directors and officers, approve the bylaws and conflict of interest policy, and adopt resolutions.
As with any meeting of your nonprofit corporation, you should take detailed notes of everything that takes place. This documentation can then become part of your corporate record, which is a permanent written record of all important organizational decisions.
8) File for Arkansas Tax Exemption
You can now apply for tax exemption from the state of Arkansas. If your nonprofit corporation is classified as exempt (such as a religious organization, school, nonprofit hospital, etc.) you can acquire an exemption from the state’s corporate income tax. For more information on this important step, the Exempt Organization Verification Sheet can help.
9) Register for Charitable Fundraising
The guidelines for this step are quite similar to the previous step. You will need to register with the state of Arkansas prior to soliciting any donations for your nonprofit corporation, which means filing a Charitable Organization Registration Form with the Secretary of State. This form grants you the privilege of raising funds through paid solicitors, conducting a sales promotion, and other similar activities.
10) Obtain Business Licenses and Permits
While Arkansas does not have a general business license that applies to all companies operating in the state, there are hundreds of industry-specific permits and licenses that you may need to acquire for your organization.
For one, Arkansas upholds the licensing requirements of any federally-regulated industries. Check here to determine if your business must be licensed by a federal agency.
You’ll also want to take a look at the state’s professional licensing boards to determine if any of them will apply to your nonprofit corporation.
Your city or county may also require general business licenses. Here some of the largest cities in Arkansas which require local licenses:
11) Acquire Insurance
Every business with employees located in the state of Arkansas is required by law to obtain two different kinds of insurance policies: workers’ compensation and unemployment insurance.
You can learn more about these insurance types and how they apply to Arkansas businesses by visiting the Division of Workforce Development and/or Arkansas Workers’ Compensation Commission websites. No matter what line of business your nonprofit is in, you need these policies.
In addition, you should also pursue general liability insurance and other more industry-specific types of insurance, but these are not legally required.
Where Can I Find Help for My Arkansas Nonprofit?
The process of forming and maintaining nonprofit corporations can be tricky, no matter which state you’re located. Fortunately, there are great resources in Arkansas to help you out in case you get stuck.
As for the state of Arkansas, if you require assistance, you can always turn to the Arkansas Nonprofit Alliance. In their own words, the Arkansas Nonprofit Alliance exists to foster a “strong, vibrant, united and effective nonprofit sector that is well positioned to meet the diverse needs of all Arkansans.” You can access some of the ANA’s resources for free, but you’ll get the most benefit by becoming a member.
In addition, if you would rather hire a service to incorporate your nonprofit for you, that’s an option as well. There are plenty of services that can handle much of the formation process, leaving you more time to focus on the actual operation of your nonprofit corporation.
These service providers (like Northwest Registered Agent) also offer valuable and convenient bonus features, like the inclusion of a full year of registered agent service with the purchase of a nonprofit formation package. They can save you a considerable amount of hassle, and all without costing an arm and a leg.
Conclusion
As you can see, there are quite a few crucial steps that you’ll need to take if you want to form a compliant nonprofit corporation in the state of Arkansas. However, it’s important to remember that if you need help at any time, it is available to you ― you don’t need to DIY the entire process.
We hope this guide helped you understand the details of the Arkansas nonprofit corporation process, and we wish you the best of luck with your new charitable organization!