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Arkansas Business License Basics

Arkansas Business License Basics

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Arkansas Business License Basics

Starting a small business in Arkansas often means registering with several federal, state, and local agencies. Let’s review common Arkansas business license registrations so your business starts off right.

Related: Guide to starting a business in Arkansas 

First Step – Set Up the Business

Sole proprietorship: In Arkansas, a sole proprietorship is a business owned by one person. It is the simplest form of business structure, with no legal distinction between the owner and the business. The owner has complete control over the business but is also personally liable for all debts and obligations.

General partnership: A general partnership in Arkansas is an agreement between two or more individuals to operate a business together. No formal setup is needed, but a partnership agreement, but it’s a great idea to draw up a partnership agreement to outline operations and responsibilities.

Corporation: An Arkansas corporation is a legal entity separate from its owners, known as shareholders. It offers limited liability protection, meaning shareholders are not generally personally responsible for the corporation’s debts and liabilities. The downside is that corporations are the most complex structure to start and operate. 

Limited Liability Company (LLC): An Arkansas LLC combines aspects of a sole proprietorship or partnership and a corporation. It provides limited liability protection to its owners, called members, shielding their personal assets from the company’s debts and liabilities, in addition to a flexible management and tax structure.

Related: Comparison of Business Structures

What Licenses Do Arkansas Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Arkansas may need. There isn’t a standard business license, as requirements vary depending on where the business is located and its activities. Here is a general overview of the different registrations your business may need.

Business Licenses

There is no general state of Arkansas business license, however, most cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.

  • Little Rock: Any business operating within the City of Little Rock will need to apply for a business license. The cost of a business license in Little Rock will vary depending on the type of business, the number of employees, and the amount of inventory.
  • Fort Smith: The City of Fort Smith requires most businesses operating in city limits to obtain a business license. The cost of a business license in Fort Smith is generally $100 annually.
  • Fayetteville: All businesses within the city limits of Fayetteville will need to obtain a business license within 60 days of starting.
  • Springdale: Businesses operating in the city limits require a Springdale Business License.
  • Jonesboro: The City of Jonesboro requires a privilege license for businesses operating within city limits. Home-based businesses, including internet-based businesses, are required to get written approval from the Planning/Zoning office to operate in a residence.
Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Fictitious Business Name Registration

While not a business license, Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) must register for a Doing Business As Name (also known as a DBA, Fictitious Name, Trade Name, or Assumed Name) with the County Clerk‘s Office in the county where the business is located. There is a one-time county filing fee associated with the name registration.

Building & Zoning Permits

Zoning: In Arkansas, most of the cities and counties in the state have zoning restrictions. Before starting a business, check with your local planning and zoning department to ensure compliance with zoning laws.

Building Permit: If you plan to construct, alter, or repair a building for your business in Arkansas, you’ll need a building permit from your local building department. In most cities and counties, the local building department is responsible for issuing building permits. For example, in Fayetteville, building permits are issued by the Building Safety Division.

Signage Permit: Before installing any business signage in Arkansas, you must obtain a sign permit from your local government. Each city and county has its own signage regulations and permit requirements. In Fort Smith, sign permits are issued by the Building Safety Department, while in Jonesboro, the Zoning Department handles sign permits. Check with your local government for specific signage requirements and permit application processes in your area.

Alarm Permit: Before installing a burglar or fire alarm, check with your city or county police or fire department.

Arkansas Sales Tax Permit

Most businesses selling a product or offering certain services will need to register for an Arkansas Sales Tax Permit with the Arkansas Department of Finance and Administration (DFA) under the Gross Receipts Tax Law.

Sales Tax Exemption Certificate

After obtaining the Sales Tax Permit, most businesses will want to obtain an Arkansas Sales Tax Exemption Certificate. This allows them to not pay sales tax on their inventory purchases meant to be resold to customers.

Occupational Permit / Professional License

A variety of occupations and professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Arkansas include; barbers, landscape contractors, tattoo artists, septic tank cleaners, home inspectors, and many more. Additional information, fees, and licensing requirements for professions are available from the Arkansas Division of Workforce Services.

Restaurant & Food Service Licensing

Any businesses working with food, such as food producers, restaurants, caterers, food trucks, convenience stores, and bed and breakfasts, must have their kitchen plans approved before opening. Learn more by contacting the Arkansas Department of Health or the county sanitarian.

Alcohol & Tobacco Permit

Any business selling liquor and/or tobacco must obtain both city and state permits. State permits are obtained through the Alcoholic Beverage Control (ABC) and Tobacco Control Board.

Employer Identification Number (EIN)

The Arkansas Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Arkansas. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.

Next Steps

While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.


  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Arkansas Business License Basics

Arkansas Business License Basics

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