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Arkansas DBA
Agriculture is one of the primary industries in Arkansas, with a variety of business opportunities for potential entrepreneurs. If you’re thinking of starting a business in Arkansas, there are several steps that need to be taken before you can open your doors. One such step is registering as a Doing Business As (DBA) entity in the state.
This article will provide an overview of how to register for a DBA in Arkansas and cover all the requirements and benefits associated with DBA status.
Definition
What Is a DBA?
An Arkansas DBA is a business name that is registered with the county clerk in Arkansas. It’s used by sole proprietors, partnerships, corporations, and LLCs in Arkansas who want to do business under a different name than their legal entity. By registering your DBA in Arkansas, you can open bank accounts, enter into contracts and begin operating under the new name.
Additionally, registering a DBA in Arkansas will help protect your business name from being used by other businesses. However, you should note that registering a DBA does not provide your business with legal protection the same way that forming a corporation or LLC would.
Advantages
What are the Advantages of a DBA in Arkansas?
An Arkansas DBA offers these advantages:
Operate under an assumed name
Having an assumed name can help in setting your business apart from others. It can also be helpful in marketing and branding your business, as customers may not easily recognize the name of a sole proprietor or partnership. A DBA allows you to operate under an assumed name and still maintain the same tax ID number as your existing business.
Get increased privacy
When you register for a DBA, you can start your business without using your personal name. This provides some additional protection from the public and makes it more difficult for someone to find out who is running a business or what other businesses the owner may own.
Establish separate identities
Forming an Arkansas DBA is a great way to help your business stand out from the competition. A DBA allows you to create a distinct identity for each of your product or service lines while still operating under one legal entity name. This lets customers know that they are dealing with two different companies and makes it easier for them to remember which products and services are being offered by each company.
Offer services locally
If you’re an entrepreneur or small business owner in Arkansas, then registering a DBA name can be an effective way to offer services locally without having to create a separate legal entity. As such, it allows you to conduct business under your own name or any other fictitious name you choose.
This is also helpful for local SEO since it can make your business more visible to potential customers in the area. Local SEO is important for any business, especially brick-and-mortar stores since it can help you show up higher in local search engine results.
Streamline compliance requirements
Lastly, Arkansas’s DBA system makes it easier for businesses to comply with the state’s regulations. You just have to register their business name, pay a fee, and wait for approval.
Then, you can start operating under the new name. This is a great way to streamline compliance requirements so that businesses can focus more on their core operations instead of worrying about paperwork.
Moreover, unlike other states, you don’t need to publish your DBA in local newspapers. This can reduce a bit of the administrative burden on your end.
Disadvantages
What are the Disadvantages of a DBA in Arkansas?
Meanwhile, these are the disadvantages of an Arkansas DBA:
No personal liability protection
A DBA does not provide any personal liability protection. This means that if your business is sued or goes into debt, creditors may be able to take your personal assets, such as a home or savings account, to pay off the debt.
It also means that if anyone sues your company for damages or losses due to negligence on behalf of the business owner(s), they can sue them directly and not just the business.
Difficult to obtain financing
Additionally, it can be difficult for a business to apply for funding when operating under a DBA in Arkansas. That’s because lenders may see the business as too much of a risk since there is no separate legal entity, such as an LLC or corporation, protecting owners from personal liability.
As such, obtaining loans and other financing can be challenging, making it important that businesses have adequate capital reserves to sustain their operations until they are able to build up enough profits to become more attractive to investors and creditors.
Zero tax benefits
One of the major disadvantages of a DBA in Arkansas is that it does not offer any tax benefits. A business registered as a DBA simply means that the entity is conducting business under an assumed name and has nothing to do with how taxes are filed.
If you’re under a sole proprietorship, the business and personal tax returns are filed together. There is no separation of liability, so if your business incurs any debts or legal obligations, you’re responsible for paying them.
Geographic constraints
DBAs should be filed per county in Arkansas, meaning that if you are conducting business in multiple counties, you will need to file a DBA for each county. This can be time-consuming and costly if you plan on doing business throughout the state.
DBA Formation
How to Get a DBA in Arkansas?
Once you’ve decided to apply for an Arkansas DBA, here are the steps you need to do:
Search for your desired assumed name
Before you can register for a DBA, you must first search to ensure that your desired assumed name does not already exist. Searching the Secretary of State’s records will help identify if there are any other businesses using an identical or similar assumed name.
You also have to make sure that a potential assumed name doesn’t contain words that imply affiliation with the government or unlawful activities. Additionally, words with financial or legal implications, like bank, attorney, or University, are also restricted since these terms require additional licensing.
Apply for DBA with the county clerk
To apply for a Doing Business As, you must visit the local county clerk office where your business is located and complete an application form. The clerk will then review the form and make sure you meet all state requirements for operating your business in Arkansas.
In addition to applying in person with the local county clerk, you can now also apply for an Arkansas DBA online. This is a great option for those who are located outside of the state or don’t have time to visit their local county clerk.
The Arkansas online application process is easy and secure, allowing you to quickly complete your paperwork from the comfort of your own home. All you need is an internet connection and a valid credit card (or debit card) to pay the filing fee.
Wait for approval
You’ll have to wait for around one to four weeks for your DBA to be processed. Nonetheless, once your registration is approved, you can start doing business under the name you’ve chosen right away since you don’t have to make a public announcement of your DBA.
Costs
How Much Does a DBA Cost in Arkansas?
The cost of an Arkansas DBA depends largely on your business structure. Sole proprietorships, LLCs, and corporations all have different fees associated with filing for a DBA.
Sole proprietorships in Arkansas must pay $25 to file an Assumed Name Certificate. For LLCs and corporations, it’s $22 if filed online. On the other hand, if they file in person or by mail, the cost is $25.
Meanwhile, partnerships must pay $13.50 for online applications and $15 if they register in person or by mail. Take note that fees vary by county, but $25 is a good estimate to keep in mind.
FAQ
Frequently Asked Questions About A DBA
Here are the most commonly asked questions about forming a DBA:
No, unlike other states, a DBA in Arkansas doesn’t expire. However, you will still need to file for changes if you’ve updated relevant information for your business.
Yes, you can cancel your DBA in Arkansas if you no longer wish to operate under the registered name. To cancel your DBA, you must file a “Certificate of Cancellation of Fictitious Name” with the Arkansas Secretary of State’s office.
While Arkansas does not require you to have a separate bank account for your DBA, it is highly recommended for organizational and financial purposes. Opening a separate business bank account for your DBA helps keep your personal and business finances separate.
As such, it becomes easier to track income, expenses, and tax-related transactions. It also enhances professionalism and credibility when dealing with clients, vendors, and financial institutions.
No. DBAs are not separate entities and are non-taxable. Businesses applying for them will only need to pay the filing fee and eventual renewal fees. Colorado does not tax DBAs.
Colorado prohibits the use of the following for DBA names in the state:
- Words or phrases violating local state laws; these include references to illegal activities, unethical activities, and obscenities
- Words or terms that are normally used for governmental agencies such as “Treasury,” “Department of Justices,” “FBI,” and so on
Arkansas allows businesses to register multiple DBAs under the same legal entity. There is no specific limit to the number of DBAs you can have in Arkansas.
This flexibility allows entrepreneurs to operate different business lines or trade styles under distinct brand identities while maintaining the legal simplicity of a sole proprietorship or partnership. Nonetheless, each DBA must go through the registration process and comply with all relevant regulations.