Do-It-Yourself Arkansas S Corporation Kit

Forming an S corporation can save your Arkansas business hundreds or even thousands of dollars a year in income and payroll taxes, even if at first glance the process seems overwhelming.

Fortunately, the process is actually fairly easy. Basically, you fill out three forms with information like your name and address. These three forms make up the three parts of the process involved in forming an S corporation.

Form One: Articles of Organization/Articles of Incorporation

Before you fill out the first form you need to decide if you will use a limited liability company or a corporation to base your S corporation from. If you choose an LLC, fill out an "Articles of Organization" form. For a corporation, fill out an "Articles of Incorporation" form. Submit either of these forms to the Secretary of State in Little Rock.

Note: The Arkansas Secretary of State website provides an overview of the benefits associated with forming an LLC or a corporation. A more complete analysis of the benefits and drawbacks of forming either an LLC or corporation is located in the first part of either of my do-it-yourself kits, found on this page.

Either your LLC or your corporation will be the base where you build your S corporation. To emphasize, you don't need to be a corporation to be an S corporation. When you form an S corporation, you are simply electing to have your business treated using the section of tax law found in Subchapter S of the tax code. Any eligible entity will work as the base for an S corporation. Traditional corporations and LLCs are the most common eligible entities, but there are other options.

Form Two: SS-4

Once you create your eligible entity, you must apply for an Employer Identification Number, or EIN. An EIN is like a Social Security Number for a business. To get your EIN, you fill out and submit an SS-4 form to the IRS. An SS-4 form is available for download from the IRS website.

Form Three: 2553

After you receive your Employer Identification Number from the IRS (usually in a few weeks) you can make the election to be treated as an S corporation. To make this election, fill out a 2553 form and send it to the Internal Revenue Service Center in Ogden, Utah.

If you feel confident, don't hesitate to start forming your S corporation right away. If you would like some additional assistance, now or at any time during these steps, please consider purchasing one of my do-it-yourself S corporation kits. I created two kits: one for those who wish to use an LLC, and one for those who wish to use a traditional corporation. My kits are an easy, affordable alternative to hiring an accountant or attorney to set up your S corporation for you.

Arkansas Option 1: Using an LLC

Most businesses benefit more from using an LLC than a regular corporation. An LLC will provide limited liability protection, like a corporation, but it's not as tricky to maintain. My LLC kit discusses the pros and cons of forming an LLC in Arkansas and walks you through filling out all three forms. I also include completed examples of all three forms for reference. Additionally, my LLC kit provides two sets of sample operating agreements: one for single member LLCs and one for multiple member LLCs.

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Arkansas Option 2: Using a Corporation

In a few situations, a business may find incorporation more beneficial than forming an LLC. The corporation version of my do-it-yourself kit also discusses the benefits and drawbacks of incorporating in Arkansas, and like the LLC version it guides you through filling out all three forms. As an added bonus, I include sample corporate bylaws, which you or your accountant can use as a starting point for forming bylaws for your new corporation.

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Additional Information You May Find Useful

If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.

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