Arkansas vs Michigan LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026Arkansas charges $50 to form an LLC; Michigan charges $50. Day-one sticker price is only part of the story, since most of the real cost comes from the annual obligations that stack up each year you keep the LLC open.
Over a rolling three-year window, Michigan runs about $825 less in total state fees than Arkansas. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
Arkansas imposes an entity-level annual tax on every LLC ($150 minimum). Michigan does not. For pass-through LLCs that would otherwise owe nothing at the state level, that minimum is the deciding line.
On speed, Arkansas typically clears standard online filings faster than Michigan. Both states offer expedited tiers at an additional cost for filers on tight timelines.
For most small operators the choice is not really between these two states at all. It is between forming where the business actually operates and trying to route through a non-resident filing. The data below shows what each option actually costs.
Key differences at a glance
- Michigan is $275 per year cheaper to maintain ($125 vs $400).
- Arkansas imposes an entity-level franchise or LLC tax that applies to pass-through LLCs. Michigan does not.
Where each state fits
For most filers, forming in the state you actually operate from is the right call. The side-by-side below shows where the two states meaningfully diverge.
What each state offers that the other does not
Only Michigan
- Paid expedited tier
- No entity-level franchise or LLC tax
Both states
- Online filing
- No publication requirement
- Operating agreement not statutorily required
Three-year cost, side by side
Rough estimate of the state-facing cost to form and keep an LLC through three years. Both totals include a $100 per year registered-agent estimate.
Running total includes the one-time filing fee and annual ongoing costs (report fee or franchise tax plus a $100/year registered agent estimate).
What it costs under your specific situation
The table below runs the same LLC through four common scenarios. "Non-resident" rows assume a typical home-state foreign LLC registration adds about $200 per year of stacked cost; the real number depends on which state you live in and ranges from $50 to over $800 depending on jurisdiction.
| Scenario | Year 1 | Each year after | 3-year total |
|---|---|---|---|
| You live in Arkansas, business operates there No foreign LLC registration needed. You pay Arkansas fees only. | $450 | $400 | $1,250 |
| You live in Michigan, business operates there No foreign LLC registration needed. You pay Michigan fees only. | $175 | $125 | $425 |
| Non-resident forming in Arkansas with operations elsewhere You pay Arkansas's fees plus a typical home-state foreign LLC registration of about $200 per year. | $650 | $600 | $1,850 |
| Non-resident forming in Michigan with operations elsewhere You pay Michigan's fees plus a typical home-state foreign LLC registration of about $200 per year. | $375 | $325 | $1,025 |
Arkansas vs Michigan: full comparison
| Dimension | Arkansas | Michigan |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 2 business days | 7 business days |
| Expedited option Paid fast-track filing | Not offered | $50 |
| Annual report Required in addition to tax | Required, $150 | Required, $25 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | $150 minimum | None |
| State income tax On pass-through LLC income at member level | Yes | Yes |
| Publication requirement Newspaper publication after formation | No | No |
| Operating agreement Required by state statute | Recommended, not required | Recommended, not required |
| Foreign LLC fee Cost to register as a foreign LLC in this state | $300 | $50 |
| State sales tax General statewide rate | 6.5% | 6.0% |
Taxes in Arkansas and Michigan
How each state handles entity-level tax on LLCs. Pass-through classification means member-level income tax also applies at each member's residence state.
Arkansas tax
$150 minimum annual tax (flat basis). State income tax applies to member-level pass-through income. Corporate rate 4.3%.
Michigan tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 6.0%.
Ongoing compliance
The recurring filings each state requires after formation.
Arkansas
Annual report $150, due 05/01 each year. Registered agent required in Arkansas.
Michigan
Annual report $25, due 02/15 each year. Registered agent required in Michigan.
Formation process, side by side
What actually happens from the moment you start filing to the moment you're in good standing. Use this as a checklist.
Arkansas
- Check business-name availability on the Arkansas entity search.
- Appoint a registered agent with a physical Arkansas street address.
- File Certificate of Organization for Limited Liability Company (Form LL-01) for $50.
- Wait for approval. Online typically 2 business days. No paid expedite offered.
- Adopt an operating agreement (recommended, not required by Arkansas statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- File your first annual report and pay $150 when it comes due.
Michigan
- Check business-name availability on the Michigan entity search.
- Appoint a registered agent with a physical Michigan street address.
- File Articles of Organization, Domestic Limited Liability Company (Form CSCL/CD-700) for $50.
- Wait for approval. Online typically 7 business days. Paid expedite from $50.
- Adopt an operating agreement (recommended, not required by Michigan statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- File your first annual report and pay $25 when it comes due.
Before you pick either state
A few things that apply no matter which state you choose. These trip up enough first-time filers that they're worth stating explicitly.
Registered agent is non-negotiable. Both Arkansas and Michigan (and every other US state) require every LLC to designate a registered agent with a physical street address in the state of formation. You can serve as your own agent if you live in the state; otherwise a commercial agent runs $50 to $125 per year. Using your own home address makes it part of the public record.
Forming elsewhere does not escape your home state's tax. If you live and operate a business from your home state, forming the LLC in Arkansas or Michigan does not avoid your home state's income tax. The moment you transact business at home, your home state requires a foreign LLC registration, and state tax liability follows your residence regardless of where the entity sits on paper.
EIN applications are free. The IRS issues Employer Identification Numbers directly at no cost. Any service charging you to "get your EIN" is reselling a free form submission. Single-member LLCs with no employees technically don't need one for federal tax, but nearly every bank requires an EIN to open a business account.
Operating agreement matters more than the state you pick. A well-drafted operating agreement governs member ownership, management, profit splits, buy-sell terms, and dissolution. Without one, your LLC runs on the state's default rules, which are rarely what you want. California, Maine, Missouri, and New York require a written one by statute; every other state treats it as strongly recommended.
Agency contacts
Arkansas Secretary of State, Business and Commercial Services Division
- Website
- www.sos.arkansas.gov/business-commercial-services-bcs
- Phone
- (501) 682-3409
- corprequest@sos.arkansas.gov
- Victory Building, 1401 W. Capitol Avenue, Suite 250, Little Rock, AR 72201
- Hours
- 8:00 AM to 4:00 PM Central, Monday to Friday
Michigan Department of Licensing and Regulatory Affairs (LARA), Corporations Division
- Website
- www.michigan.gov/lara/bureau-list/cscl/corps
- Phone
- (517) 241-6470
- CorpsMail@michigan.gov
- Corporations, Securities and Commercial Licensing Bureau, Corporations Division, P.O. Box 30054, Lansing, MI 48909
- Office
- 2501 Woodlake Circle, Okemos, MI 48864
- Hours
- 8:00 AM to 5:00 PM Eastern, Monday to Friday
Arkansas Department of Finance and Administration, Revenue Division
- Website
- www.dfa.arkansas.gov
- Phone
- (501) 682-7089
- Ragland Building, 1900 W. 7th Street, Room 2062, Little Rock, AR 72201
- Hours
- 8:00 AM to 4:30 PM Central, Monday to Friday
Michigan Department of Treasury
- Website
- www.michigan.gov/treasury
- Phone
- (517) 636-4486
- Michigan Department of Treasury, Lansing, MI 48922
- Office
- 430 West Allegan Street, Lansing, MI 48933
- Hours
- 8:00 AM to 4:00 PM Eastern, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in Arkansas or Michigan?
Formation fees are identical: $50 in both states. The year-over-year cost is where they differ. Arkansas runs $400 per year after formation, Michigan runs $125.
-
Can I form an LLC in Arkansas if I live in Michigan?
Yes, but your Michigan business will almost certainly need to register as a foreign LLC in Michigan too, which means paying Michigan's foreign registration fee and any ongoing Michigan obligations on top of the Arkansas ones. The "form elsewhere to save" math usually doesn't work for operating businesses; it only works when you have no physical operations tied to any specific state.
-
How long does it take to form an LLC in Arkansas vs Michigan?
Arkansas online: 2 business days; Michigan online: 7 business days. Arkansas does not offer paid expedite. Michigan offers paid expedite from $50.
-
Which state has lower taxes for an LLC, Arkansas or Michigan?
Arkansas: state income tax applies to member-level pass-through income, plus a $150 minimum entity-level tax. Michigan: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax.
-
Do both states require a registered agent?
Yes. Every US state (and DC) requires every LLC to maintain a registered agent with a physical street address in the state. Arkansas and Michigan both have this requirement. You can serve as your own agent if you live in the state; most out-of-state filers use a commercial agent for $50 to $125 per year.
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Which state should I pick if I run an online business from home?
Form in the state you actually live in. Your home state's Department of Revenue treats your residence as nexus regardless of where the LLC is filed, which means you owe state income tax there anyway. Forming in Arkansas or Michigan to escape your home state's tax doesn't work; it adds paperwork. The non-resident filings make sense when you genuinely operate nowhere in particular: international founders, purely passive holding entities, or real-estate LLCs owning property in other states.
Full state guides
More Arkansas and Michigan comparisons
More Arkansas vs ...
Sources
- Filing fee: www.sos.arkansas.gov/uploads/bcs/LLC_Fees1_1.pdf · verified April 21, 2026
Arkansas SoS BCS Limited Liability Company Filing Fees (Rev. 1/25) under Act 1041 of 2021: Certificate of Organization $50.00 flat. No separate online price shown on the official fee schedule. Online filings via ARK.org add a $5 portal processing fee on top of the $50 state fee. - Filing fee: www.sos.arkansas.gov/uploads/LL-01.pdf · verified April 21, 2026
Arkansas Form LL-01 Certificate of Organization (Rev. 10/21) footer states: Filing Fee $50.00 payable to Arkansas Secretary of State. - Expedited filing: www.sos.arkansas.gov/uploads/bcs/LLC_Fees1_1.pdf · verified April 21, 2026
No paid expedited tier is published on the Arkansas LLC fee schedule. The Doing Business in Arkansas 2025 handbook says online filings are normally updated within 48 hours and mailed filings within 72 hours of receipt, which functions as fast default processing. Recorded as offered: false. - Annual report fee: www.sos.arkansas.gov/business-commercial-services-bcs/franchise-tax-re… · verified April 21, 2026
Arkansas SoS Franchise Tax / Annual Report Forms page: Limited Liability Company (LLC or PLLC) online fee $150, paper fee $150. Online payment adds a $5.00 processing fee per ARK.org. - Franchise tax: www.sos.arkansas.gov/business-commercial-services-bcs/franchise-tax-re… · verified April 21, 2026
Under A.C.A. Section 26-54-101 et seq. (Arkansas Corporate Franchise Tax Act of 1979), LLCs pay a flat $150 annual franchise tax to the Secretary of State. Act 819 of 2021 moved administration of the tax from DFA to the SoS effective May 1, 2021. Due May 1 each year. - Sales tax rate: www.salestaxhandbook.com/arkansas · verified April 21, 2026
Arkansas statewide sales and use tax rate is 6.5 percent under A.C.A. Section 26-52-301. Rate has been unchanged since 2013. DFA Excise Tax pages confirm the rate but are Cloudflare-WAF blocked for scripted access; Sales Tax Handbook used as a public mirror pointing back to DFA. - Corporate income tax rate: taxfoundation.org/data/all/state/state-corporate-income-tax-rates-brac… · verified April 21, 2026
Arkansas top corporate income tax rate is 4.3 percent on taxable income over $11,000 (Tax Foundation 2025 State Corporate Income Tax Rates & Brackets), after Act 2 of the 2nd Extraordinary Session of 2023 cut the top rate from 5.1 percent. DFA corporate page is Cloudflare-blocked for scripted access. - Foreign LLC registration fee: www.sos.arkansas.gov/uploads/bcs/LLC_Fees1_1.pdf · verified April 21, 2026
Arkansas SoS BCS LLC Fees (Rev. 1/25): Application for Statement of Authority by foreign limited liability company $300.00 (item 13). This is the foreign LLC registration fee under the 2021 Uniform Limited Liability Company Act. - Business name search: www.sos.arkansas.gov/corps/search_all.php · verified April 21, 2026
Arkansas SoS business entity search. Confirm name availability before filing the Certificate of Organization. - Operating agreement requirement: law.justia.com/codes/arkansas/title-4/subtitle-3/chapter-38/ · verified April 21, 2026
Arkansas Uniform Limited Liability Company Act (A.C.A. Title 4, Chapter 38, Subchapter 1, Section 4-38-102(13)) defines operating agreement to include oral, implied, in a record, or any combination thereof. No statutory mandate that the agreement be in writing, filed, or adopted at all, so recorded as not required. - Filing fee: www.michigan.gov/lara/-/media/Project/Websites/lara/cscl/NonImages_new… · verified April 21, 2026
LARA Form CSCL/CD-700 (Rev. 07/25) Articles of Organization for a Domestic LLC lists the statutory filing fee of $50. Authority: MCL 450.4202 and LARA Corporations Division fee schedule. - Expedited filing: www.michigan.gov/lara/bureau-list/cscl/corps/expedited-service · verified April 21, 2026
LARA expedited service tiers (Form CSCL/CD-272): 24 hours $50 (formation documents); Same day $100; 2 hour $500; 1 hour $1,000. 24-hour tier recorded as the default expedited option. Fees are in addition to the document filing fee. - Online filing portal: www.michigan.gov/lara/news-releases/2025/06/30/michigan-launches-new-m… · verified April 21, 2026
LARA launched the MiBusiness Registry Portal on June 23, 2025 replacing the legacy COFS system. All formations and annual statements are now filed through mibusinessregistry.lara.state.mi.us using a MiLogin for Business account. Standard online processing is typically 7 to 10 business days. - Naming rules: www.legislature.mi.gov/Laws/MCL?objectName=mcl-450-4204 · verified April 21, 2026
MCL 450.4204: LLC name must contain 'limited liability company' or the abbreviation 'L.L.C.' or 'L.C.' (with or without periods). Cannot contain 'corporation,' 'incorporated,' 'corp.,' or 'inc.' The name must be distinguishable from other entities on record. - Operating agreement requirement: www.legislature.mi.gov/documents/mcl/pdf/mcl-Act-23-of-1993.pdf · verified April 21, 2026
Michigan Limited Liability Company Act (Act 23 of 1993), MCL 450.4102 defines the operating agreement but does not require LLCs to adopt one. Default statutory rules under the Act apply if no operating agreement exists. - Foreign LLC registration fee: www.michigan.gov/lara/-/media/Project/Websites/lara/cscl/NonImages_new… · verified April 21, 2026
LARA Form CSCL/CD-760 (Rev. 07/25) Application for Certificate of Authority to Transact Business, Foreign LLC. Filing fee $50. Authority: MCL 450.5007. - Annual report fee: www.michigan.gov/lara/bureau-list/cscl/corps/limited-liability-co/fill… · verified April 21, 2026
Michigan LARA Annual Filings page: Annual Statement Form CSCL/CD-2700 due February 15 each year. Filing fee $25 per MCL 450.4207 and LARA fee schedule. Late filings accepted but entity loses good standing; two years of non-filing triggers administrative dissolution under MCL 450.4909. - Corporate income tax rate: www.michigan.gov/taxes/business-taxes/cit · verified April 21, 2026
Michigan Corporate Income Tax (CIT) is a flat 6% on the corporate tax base after allocation and apportionment under MCL 206.623. Applies to C corps and entities electing C-corp treatment. - Sales tax rate: www.michigan.gov/taxes/business-taxes/sales-use-tax · verified April 21, 2026
Michigan statewide sales and use tax is 6%. Michigan does not permit local-option sales taxes; the statewide rate applies in all 83 counties. - Business name search: mibusinessregistry.lara.state.mi.us/ · verified April 21, 2026
MiBusiness Registry Portal replaces the legacy cofs.lara.state.mi.us search. Used to confirm name availability before filing Articles of Organization.