Building a business takes more than filing paperwork.

The decisions made when a business begins—and as it grows—can affect ownership, control, liability, relationships between owners, and what happens when circumstances change.

The Law Office of Tasha Terry, PLLC helps Arkansas entrepreneurs and small-business owners build a stronger legal foundation. Tasha provides practical guidance on business formation, ownership agreements, contracts, governance, and planning for future transitions.

Whether you're turning an idea into a business or realizing the business you've already built needs better legal structure, the goal is the same: understand the risks, put the right agreements in place, and plan before a problem becomes a crisis.

Built on Trust. Focused on What Matters.

With offices in Conway and Lonoke, the firm serves small-business owners throughout Central Arkansas.

How Do You Form a Business in Arkansas?

When forming a business, one of the first and most important decisions to make is the structure you will use. A business structure is the legal classification of a business that determines taxes, liability, and other legal rights and responsibilities. 

A range of business structures is available, including:

  • Sole proprietorship

  • General partnership

  • Limited partnership

  • Limited liability company (LLC)

  • Corporation 

  • Cooperative 

The best business structure for your business depends on a range of different factors. 

What Factors Influence Business Formation in Arkansas

Here are some factors to consider when choosing the best structure for your business. 

Control

A major deciding factor when structuring your business is often the degree of control you want to retain over your business. This is especially true where multiple owners are involved.

A sole proprietorship allows for the fullest control. As the only owner and operator, a sole proprietor can run their business how they want to. In comparison, corporations are answerable to shareholders who elect a board of directors to maintain general oversight of the organization's officers who handle the organization's day-to-day business. 

Liability

Your business structure also determines the extent of your personal liability for the liabilities, debts, and obligations of the business. Some structures offer better protection against personal liability. 

In a sole proprietorship, for example, the owner is personally responsible for the business's liabilities and debts. Their personal assets may be used to satisfy the business's debts. They can also be sued in relation to the business's activities. 

An LLC is generally treated as a legal entity separate from its members. Subject to exceptions, proper operation, and applicable law, this structure may help limit members' personal liability for certain business obligations.

Taxes

The structure of a business determines the applicable tax regime. Many business structures – sole proprietorships, partnerships, limited liability companies, and S corporations – are pass-through entities. This means the business doesn't separately pay tax. Instead, the tax liability is passed to the owners who pay taxes on the business profits via their personal tax returns. 

Other forms of incorporation, like C corporations, are treated as separate entities from their owners and taxed according to the relevant corporate rate. 

Administration

The degree of administration of a business typically becomes more onerous as the complexity of the business structure increases. 

Sole proprietorships and partnerships typically have the least complex paperwork, while corporations have strict reporting obligations and complex paperwork to file when forming and running the business. 

Five Important Ways a Lawyer Helps Your Business in Arkansas

A business lawyer can advise you on a range of issues when forming a business. 

1. Choosing the Right Structure for Your Business

Choosing the right structure is the key to building a strong foundation for your business and its future growth. A business lawyer can advise you on the pros and cons of each structure available to you, relevant to your circumstances. 

This will help protect both your interests and your business's interests in the future.

2. Industry-Specific Advice

A business lawyer can give you advice specific to the industry in which you operate, as well as the product or service you're offering. This includes assisting you with understanding the applicable regulations and any necessary licenses or permits. 

3. Drafting and Negotiating Legal Documents

Business formation typically involves the preparation of a range of documents, such as business registration papers, intellectual property registrations, and other commercial documents. A lawyer can assist you in accurately drafting these documents. 

Importantly, a business lawyer can draft legally binding contracts or negotiate the terms of a contract to benefit you and your business. These are essential to many aspects of running a business, for example, partnership agreements. 

4. Understanding Your Tax Obligations

Entity choice can have significant tax consequences. When appropriate, we work with or encourage clients to consult their CPA or tax professional regarding the tax treatment of available business structures. 

5. Employment Law

If you hire employees, you must comply with a suite of employment laws and regulations. A business lawyer can help you navigate these and draft effective employment contracts that protect both you and your employees. 

Termination especially can be a legal minefield, so reliable legal advice on this is essential. 

Contact a Business Lawyer in Arkansas Today 

If you are considering starting a new business in Arkansas, our business lawyer can help you make strategic decisions. Contact Law Office of Tasha Terry, PLLC today to schedule a consultation. You can either fill out our online form or call us at (501) 438-8123. We look forward to helping make your new business a successful one.