Arkansas Nonprofit Corporation Act Requirements

The Arkansas Nonprofit Corporation Act requirements, set out in Title 4, Chapter 33 of the Arkansas Code, cover how you form a nonprofit, who must run it, what documents you keep, and what you file each year. In practical terms: pick a distinguishable name, file Articles of Incorporation with the Secretary of State for $45 online or $50 by mail, keep a registered agent in Arkansas, adopt bylaws, appoint at least one director plus a president, secretary, and treasurer, and submit an annual disclosure every year by August 1. Federal tax-exempt status is a separate application handled by the IRS.

Forming the Corporation

Your name has to be distinguishable from every other entity already on file. It can’t differ from an existing name only by a suffix, article, punctuation, or by being singular versus plural.1Justia Law. Arkansas Code 4-33-401 – Corporate Name The Secretary of State’s online database lets you check availability, and a $25 Application for Reservation of Entity Name holds a name for 120 days while you prepare the rest of your paperwork.2Arkansas Secretary of State. Application for Reservation of Entity Name

Articles of Incorporation are the founding document. They must identify the corporation’s name, its registered agent and that agent’s address, and whether the corporation will have members.3Justia Law. Arkansas Code 4-33-202 – Articles of Incorporation You can state a specific purpose or use a general “any lawful activity” clause. If you plan to seek federal 501(c)(3) recognition, the articles need language restricting political activity, limiting purposes to exempt categories, and requiring that assets pass to another exempt organization on dissolution.4Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations Filing costs $45 online or $50 by mail.5Arkansas Secretary of State. Forms, Fees, and Records Requests – Corporations

Every Arkansas nonprofit must keep a registered agent with a physical address in the state who is available during business hours to receive legal documents.6Justia Law. Arkansas Code 4-20-105 – Registered Agent If you lose your agent and don’t replace them, the Secretary of State can start proceedings to dissolve the corporation administratively. Commercial registered agent services generally charge $100 to $300 per year.

You’ll also need an Employer Identification Number before opening a bank account or hiring anyone. The IRS issues EINs online for free; any third-party site charging a fee for this is unnecessary.7Internal Revenue Service. Get an Employer Identification Number

Required Directors and Officers

Every Arkansas nonprofit must have a board of directors, and the board holds all corporate powers.8Justia Law. Arkansas Code 4-33-801 – Requirement for and Duties of Board The statute requires at least one director, but most nonprofits appoint three or more both to spread oversight and to meet IRS expectations for independent governance.

Unless the articles or bylaws say otherwise, the nonprofit must also have a president, a secretary, and a treasurer.9Justia Law. Arkansas Code 4-33-840 – Required Officers One person can hold more than one office at a time, which is common in smaller organizations. The president directs operations, the secretary maintains records and minutes, and the treasurer handles financial reporting. The board can create additional officer roles as needed.

Directors owe the corporation duties of good faith, loyalty, and the care a reasonably prudent person would exercise. These duties have teeth. A director who approves transactions benefiting insiders without proper disclosure, or who signs off on financials without reviewing them, can face personal liability. Federal law layers on an excise tax regime for “excess benefit transactions,” where disqualified persons who receive unreasonable compensation and the managers who knowingly approve it both face penalties, and uncorrected benefits escalate sharply.10Office of the Law Revision Counsel. 26 U.S. Code 4958 – Taxes on Excess Benefit Transactions

Bylaws and Internal Rules

Bylaws aren’t filed with the state, but they’re required internally. The incorporators or the board adopt them, and they can’t conflict with the Articles of Incorporation or Arkansas law.11Justia Law. Arkansas Code 4-33-206 – Bylaws They should cover how meetings are called, how directors and officers are chosen and removed, and how the organization manages its money.

Quorum rules matter. A majority of directors in office is a quorum unless the bylaws set another threshold, and getting this wrong leaves board decisions open to challenge later. Spell out notice requirements and whether directors can participate by phone or video. The board can act without a meeting, but only if every director signs a written consent describing the action.12Justia Law. Arkansas Code 4-33-821 – Action Without Meeting That unanimity requirement surprises organizations that assume a majority written consent is enough.

If the nonprofit has members, the bylaws need to define who qualifies, what members can vote on, and how member meetings run.13Justia Law. Arkansas Code 4-33-701 – Members Many Arkansas nonprofits skip members entirely and vest everything in the board.

Conflict of Interest

A written conflict of interest policy isn’t a legal requirement for 501(c)(3) status, but the IRS asks about it on Form 1023 and strongly encourages one.14Internal Revenue Service. Form 1023 – Purpose of Conflict of Interest Policy The policy should require disclosure of personal financial interests in any transaction the organization is considering and require conflicted individuals to step out of the vote.

Arkansas law separately addresses these transactions. A deal between the nonprofit and a conflicted director isn’t automatically voidable if the transaction was fair, or if the material facts were disclosed and the board or members approved it on that disclosure.15Justia Law. Arkansas Code 4-33-831 – Director Conflict of Interest Avoiding these transactions is safer; when they’re unavoidable, documented disclosure and independent approval create a legal safe harbor.

The August 1 Annual Disclosure

This is the deadline that trips up more Arkansas nonprofits than any other. By August 1 every year, you must file an annual disclosure with the Secretary of State listing the corporation’s name, jurisdiction of incorporation, registered agent information, principal office address, and the names and addresses of officers and directors.16Justia Law. Arkansas Code 4-33-131 – Annual Disclosure of Information There’s no state fee, but miss it and administrative dissolution can follow. After five years in dissolved status, the dissolution is permanent and your name becomes available for anyone else to claim.

Charitable Solicitation Registration

If the nonprofit will ask the public for donations in Arkansas, it must register with the Secretary of State before fundraising begins.17Justia Law. Arkansas Code 4-28-402 – Registration of Charitable Organizations Prior to Solicitation The sworn form asks for information about the organization and its solicitation activities and must include a copy of the IRS tax-exempt status document. The Attorney General’s office enforces this law and has the right to inspect all registration records.18Arkansas Attorney General. Charitable Giving Renewal is annual. Solicitation without proper registration can lead to penalties and being barred from fundraising in the state.

Federal Tax-Exempt Status and Annual IRS Returns

Incorporating under the Arkansas Nonprofit Corporation Act doesn’t make the organization tax-exempt. Federal 501(c)(3) status is a separate application to the IRS using Form 1023 ($600) or, for smaller organizations expecting annual gross receipts of $50,000 or less and holding assets under $250,000, the streamlined Form 1023-EZ ($275).19Internal Revenue Service. Instructions for Form 1023-EZ20Internal Revenue Service. Form 1023 and 1023-EZ – Amount of User Fee The IRS issues most 1023-EZ determinations within about 22 days; the full Form 1023 usually takes around 191 days.21Internal Revenue Service. Where’s My Application for Tax-Exempt Status

Once recognized, the organization owes the IRS an annual return. The form depends on size:

The penalty for a late return is $20 per day, capped at the lesser of $10,500 or 5% of gross receipts; larger organizations pay $105 per day with a $54,500 cap.23Internal Revenue Service. Annual Exempt Organization Return – Penalties for Failure to File Miss three years in a row and the IRS automatically revokes tax-exempt status, and getting it back means a new application and another user fee.24Internal Revenue Service. Automatic Revocation of Exemption for Non-Filing – Frequently Asked Questions

Federal law also requires 501(c)(3) organizations to make the tax-exempt application, supporting documents, the determination letter, and the three most recent Form 990 returns available for public inspection.25Internal Revenue Service. Public Disclosure and Availability of Exempt Organizations Returns and Applications – Documents Subject to Public Disclosure

What Happens If You Fall Out of Compliance

The most common consequence is administrative dissolution. The Secretary of State can begin dissolution proceedings when a nonprofit fails to file its annual disclosure, maintain a registered agent, or pay required fees.26Justia Law. Arkansas Code 4-33-1420 – Grounds for Administrative Dissolution A dissolved nonprofit loses legal authority to operate, enter contracts, or keep its tax-exempt benefits. You can reinstate within five years by filing the overdue paperwork and paying outstanding fees; after that, dissolution is permanent.16Justia Law. Arkansas Code 4-33-131 – Annual Disclosure of Information

Signing a document submitted to the Secretary of State that you know is materially false is a Class C misdemeanor.27Justia Law. Arkansas Code 4-33-129 – Penalty for Signing False Document

Personal Liability for Payroll Taxes

The Trust Fund Recovery Penalty catches many nonprofit leaders by surprise. When an organization withholds income and employment taxes from paychecks but fails to remit them, the IRS can assess a penalty equal to the full amount of the unpaid trust fund taxes against any “responsible person” who willfully failed to pay. Board members are explicitly listed as potential responsible persons.28Internal Revenue Service. Employment Taxes and the Trust Fund Recovery Penalty (TFRP) Willfulness here doesn’t require bad intent. Using available funds to pay other bills while knowing payroll taxes are outstanding is enough, and a board member with authority over finances can be held personally liable even after delegating actual payments to staff.

Closing the Nonprofit

Winding down follows a defined path. The board approves a plan of dissolution that identifies how remaining assets will be distributed after debts are settled. If the nonprofit has voting members, they must also approve; otherwise a board majority can authorize dissolution.29Justia Law. Arkansas Code 4-33-1401 – Dissolution by Incorporators or Directors and Third Persons For a 501(c)(3), the remaining assets must go to another tax-exempt entity, not back to founders or board members.4Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations

File Articles of Dissolution with the Secretary of State for $50.30Arkansas Secretary of State. Non-Profit Corporation Filing Fees Close any tax accounts with the Arkansas Department of Finance and Administration through the ATAP portal.31Department of Finance and Administration. Close or Update Account If the nonprofit was registered for charitable solicitation, file a final report. The final Form 990 or 990-EZ must include Schedule N describing the liquidation: assets distributed, fair market values, dates, and recipients, along with whether any officer, director, or key employee is involved with a successor entity.32Internal Revenue Service. Termination of an Exempt Organization An incomplete Schedule N is one of the most common dissolution mistakes and tends to invite IRS follow-up.