I set up an Arkansas LLC last year for a side project that never got off the ground. Literally zero revenue, zero expenses, no bank account even. Do I still have to file annual reports or anything with the state if there's been no activity? I don't want to get hit with fines or have the LLC dissolved, but I also don't want to pay for filings or tax prep for a business that does nothing. Thanks.
LLC Filing
Does an Arkansas LLC need to file anything when it has no income?
Arkansas annual franchise tax is due regardless of income. Even if you made $0, the LLC still owes the minimmu franchise tax and must file the annual report. Skip it and the state will eventually dissolve the LLC and you'll get late fees.
Yep, the minimum franchise tax is $150/year for Arkansas LLCs, if I remember right. It's not based on income. So no income doesn't mean no filing.
This is exactly why I dissolved my dead LLC. Filing fees + registered agent + tax prep for a business that made nothing? No thanks. OP, unless you're planning to actually use it soon, consider just closing it down properly.
Also worth noting: even with no income, the IRS may still want an annual filing depending on how the LLC is taxed. Single-member LLC is disregarded, so it just goes on your personal return. But if you elected S-corp or have partners, there's a partnership/S-corp return even at zero. Did you make any elections?
lol @ "no income" LLCs. The state doesn't care that it's a hobby that never launched. They want their $150.
grumpy_heron makes a good point though. If it's truly dormant and you don't see it becoming active, dissolving might be cheaper than years of franchise tax. But dissolving also haas a filing fee in AR, so weigh that.
I'm in a similar boat but in a different state. Are you sure Arkansas requires the annual report even with zero revenue? Some states waive it if there's no activity. Might be worth calling the Secretary of State directly to confirm.
cornbread_kid, yes, Arkansas is pretty clear on this. The annual franchise tax report is required for all LLCs, no income test. It's Not like some states where you can file a "no activity" exemption. I'd double-check the SOS site but don't expect a waiver.
Also, don't forget the registered agent requirement. If you're using a service, that's another recurring cost. For a shell LLC with no plans, it adds up fast. Not trying to spend your money, just saying.
Honestly, the cheapest option might be to just let it dissolve and move on. The state will do it for you if you ignore the filings long enough. Not the "proper" way, but if it's truly dead weight... *shrug*
Letting it disusolve can have consequences though. It might affect your ability to form another LLC or get business credit later. Probably better to dissolve voluntarily than get administratively dissolved.