Choosing the right state for your LLC is crucial as it impacts everything from costs to taxes and regulations.
Here we’ll break down the cost breakdown between the two Arkansas and Missouri LLCs, highlight their similarities and differences.
Provide step-by-step guides on how to form LLC in each state, and compare key features such as taxes and flexibility
In rules and regulations, so you can make the best decision when starting or expanding your business.
Arkansas vs. Missouri LLC
Arkansas requires filing Articles of Organization, while Missouri requires filing Articles of Organization with different information.
Arkansas LLCs are subject to state income tax and franchise tax, while Missouri LLCs do not pay state income tax but have an annual report fee based on assets.
Arkansas does not legally require an operating agreement, but it is recommended. Missouri also doesn’t require one, but having it clarifies internal operations.
| Arkansas LLC | Missouri LLC |
|---|---|
| In Arkansas, LLCs are required to file Articles of Organization with a filing fee of $45. | Missouri, LLCs must file Articles of Organization with the same filing fee of $50. |
| It has a flat income tax rate of 6.5%. | It has a progressive income tax rate. The top marginal rate is 5.4%. |
| Arkansas LLCs are subject to a franchise tax based on net worth, ranging from $150 to $3,000. | Missouri LLCs are not subject to a franchise tax. |
| It does not have a state sales tax. | It has a state sales tax rate of 4.225%. |
| Property taxes in Arkansas are relatively low. The average effective property tax rate is 0.8%. | Property taxes in Missouri are relatively high. The average effective property tax rate is 1.2%. |
| Arkansas impose an annual report fee on LLCs, which is around $150. | In Missouri, LLCs are not required to pay an annual report fee. |
Cost Breakdown of The Two
You may use our free LLC cost calculator by state to find out filing fees, tax percentages, income taxes, and more.
Arkansas LLC
The filing fee for the Articles of Organization in Arkansas is $45.
An LLC in Arkansas is required to have a registered agent, which can be an individual or a registered business entity.
The cost of hiring a registered agent can range from $100 to $300 per year.
Arkansas imposes an annual franchise tax on LLCs based on their net worth. The tax rate starts at $150 for LLCs with a net worth of $1,000 or less and increases based on the LLC’s net worth.
Depending on the nature of the business, there may be additional costs for obtaining licenses or permits specific to the industry.
Missouri LLC
The filing fee for the Articles of Organization in Missouri is $50.
A registered agent is required for LLCs in Missouri. The cost of a registered agent in Missouri ranges from $100 to $300 per year.
Missouri LLCs are not subject to an annual report fee based on the LLC’s assets.
Similar to Arkansas, there may be additional costs associated with obtaining any necessary licenses or permits for the business.
Related Posts:
- Arkansas LLC: Cost Breakdown, Pros and Cons, Requirements
- Missouri LLC: Cost Breakdown, Pros and Cons, Requirements
Similarities Between Arkansas and Missouri LLC
Both Arkansas and Missouri provide limited liability protection to LLC owners. This means that the personal assets of the LLC members are generally protected from business debts and liabilities.
The liability of the members is limited to the amount they have invested in the company.
In both states, an LLC is recognized as a separate legal entity from its owners. This separation allows the LLC to enter into contracts, own property, and conduct business in its own name.
Both Arkansas and Missouri allow LLCs to choose their preferred management structure.
LLCs can be managed by the members themselves (member-managed) or they can appoint managers (manager-managed) to handle the day-to-day operations.
Both states follow the federal tax treatment for LLCs, known as pass-through taxation. This means that the LLC itself does not pay income tax at the entity level.
Instead, the profits and losses of the LLC “pass-through” to the individual members, who report them on their personal tax returns.
Both Arkansas and Missouri provide a level of confidentiality for LLC owners.
The names and addresses of the members and managers are not required to be publicly disclosed in the formation documents.
Additional Resources:
Steps to Form LLC in Arkansas
Choose a name for your LLC that complies with Arkansas naming requirements.
File Articles of Organization with the Arkansas Secretary of State, including essential information such as LLC name and registered agent details.
Pay the filing fee, which is $45.
Create an operating agreement to outline the internal workings and management structure of your LLC (not legally required but highly recommended).
Obtain any necessary licenses or permits for your specific business activities at the local, state, or federal level.
Obtain an Employer Identification Number (EIN) from the IRS if you plan to hire employees or have multiple members in your LLC.
Comply with any additional requirements specific to your industry or business activities.
Consider consulting with a business attorney or professional advisor to ensure compliance and proper formation.
Steps to Form LLC in Missouri
Choose a name for your LLC that complies with Missouri naming requirements.
File Articles of Organization with the Missouri Secretary of State, providing essential information such as LLC name, registered agent details, and principal place of business.
Pay the filing fee, which is $50.
Create an operating agreement to outline the internal workings and management structure of your LLC (not legally required but highly recommended).
Obtain any necessary licenses or permits for your specific business activities at the local, state, or federal level.
Consider obtaining an Employer Identification Number (EIN) from the IRS if you plan to hire employees or have multiple members in your LLC.
Comply with any additional requirements or regulations specific to your industry or business activities.
Feature Comparisons Between Arkansas LLC vs. Missouri LLC
Formation Requirements: The formation requirements for Arkansas and Missouri LLCs are relatively similar.
Both states require filing Articles of Organization with their respective Secretary of State offices, providing essential information such as the LLC name and registered agent details.
Limited Liability Protection: Both Arkansas and Missouri offer limited liability protection to LLC owners.
This means that the personal assets of the members are generally shielded from the debts and liabilities of the business.
Management Structure: Both states allow LLCs to choose between member-managed and manager-managed structures.
In a member-managed LLC, all members participate in the decision-making and management of the business.
In a manager-managed LLC, one or more designated managers handle the day-to-day operations.
Taxation: There is a significant difference in taxation between Arkansas and Missouri LLCs. Arkansas imposes a state income tax on LLCs, and they are also subject to a franchise tax based on their net worth.
Missouri does not impose a state income tax on LLCs but requires payment of an annual report fee based on the LLC’s assets.
Operating Agreement: Both states do not legally require LLCs to have an operating agreement, but it is highly recommended to have one in place.
An operating agreement outlines the internal workings, management structure, and member rights and responsibilities of the LLC.
Confidentiality: Arkansas and Missouri provide a level of confidentiality regarding LLC ownership.
The names and addresses of the LLC members and managers are generally not required to be publicly disclosed in the formation documents.
Business Environment
Arkansas LLC
Arkansas has a diverse economy, with major industries including agriculture, manufacturing, healthcare, retail, and tourism.
The state offers incentives and tax credits to attract businesses, particularly in targeted industries such as aerospace, information technology, and renewable energy.
Arkansas has taken steps to create a business-friendly environment.
The state offers streamlined processes for business registration and licensing, and it has implemented regulatory reforms to support entrepreneurship and small businesses.
Arkansas has organizations such as the Arkansas Small Business and Technology Development Center and the
Arkansas Economic Development Commission that provide resources, support, and assistance to entrepreneurs and businesses looking to start or expand in the state.
Missouri LLC
Missouri has a diverse and robust economy, with key industries including manufacturing, transportation and logistics, healthcare, financial services, and agriculture.
The state is strategically located, with access to major transportation infrastructure and a skilled workforce.
Missouri has implemented pro-business policies and initiatives to attract and retain companies.
The state offers various tax incentives, grants, and loan programs to support business growth, investment, and job creation.
Missouri has a network of organizations such as the Missouri Small Business Development Centers, the
Missouri Department of Economic Development, and the Missouri Chamber of Commerce that provide resources, mentoring, and assistance to entrepreneurs and businesses at various stages.
Read Also:
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- 27 Best Business Ideas in Missouri
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Arkansas vs. Missouri Taxes
Arkansas Taxes
It imposes a state income tax on individuals and businesses, including LLCs. The income tax rate is 6.5%, with higher rates applying to higher income brackets.
Arkansas has a state sales tax rate of 6.5%. However, local sales taxes may also apply, bringing the total sales tax rate in certain areas to higher levels.
Arkansas levies property taxes on real and personal property. Property tax rates vary by county and are based on the assessed value of the property.
Arkansas imposes a franchise tax on LLCs based on their net worth. The tax rate ranges from $150 to $3,000, depending on the LLC’s net worth.
Missouri Taxes
It has a progressive income tax rate. The top marginal rate is 5.4%.
Missouri has a state sales tax rate of 4.225%. Additionally, local sales taxes may apply, which can vary by jurisdiction.
Missouri assesses property taxes on real and personal property. The property tax rates vary by county and are based on the assessed value of the property.
Flexibility in Rules and Regulations
Operating Agreement: Both Arkansas and Missouri allow LLCs to have flexibility in creating their operating agreements.
While an operating agreement is not legally required in either state, it provides the opportunity for
LLC members to establish their own rules and procedures governing the operation and management of the company.
This allows for customization and flexibility in areas such as decision-making, profit sharing, ownership structure, and member rights and responsibilities.
Management Structure: Both states offer flexibility in choosing the management structure of an LLC.
LLCs can be member-managed, where all members participate in decision-making and day-to-day operations, or manager-managed, where designated managers handle the business affairs.
This flexibility allows LLCs to select the management structure that best suits their needs and preferences.
Business Activities: Arkansas and Missouri generally provide flexibility in conducting various business activities.
However, it’s important to be aware of any specific industry regulations or licensing requirements that may apply to certain types of businesses or professions.
Compliance with specific rules and regulations related to the industry or activity in which the LLC operates is essential.
Key Differences Between Arkansas and Missouri- An Overview
