Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
Regulation 1997-4 - Comprehensive Individual Income Tax Regulations
Rule 26-51-102 - DEFINITIONS
Rule 6.26-51-102 - Limited Liability Company

Limited Liability Companies (LLC's) are owned and in some cases managed by members who are not personally liable for the LLC's debts or obligations. The IRS may classify an LLC as a partnership if it lacks a preponderance of "corporate characteristics" (see definition), resulting in the flow-through of tax attributes to the LLC's members under the partnership tax rules. In Arkansas, LLC's are created and governed pursuant to the Small Business Entity Tax Pass Through Act, ACA 4-32-101 et seq. An LLC can be created by one or more persons by filing Articles of Organization with the Arkansas Secretary of State. Property may be acquired, held and conveyed in the name of the LLC and such property would belong to the LLC, not its members. Pursuant to ACA 4-32-1313, every LLC having two (2) or more members must file an income tax return for each taxable year as required for every partnership by ACA 26-51-802. The income and expenses of every LLC having only one (1) member must be reported on the member's individual income tax return.