The Arkansas Nonprofit Corporation Act, codified in Title 4, Chapter 33 of the Arkansas Code, sets the requirements for forming and running a nonprofit corporation in the state. At a minimum, you must file Articles of Incorporation with the Secretary of State, appoint a board and required officers, adopt bylaws, keep a registered agent on file, and submit an annual disclosure statement by August 1 each year. Tax exemption, charitable solicitation registration, and federal reporting are separate obligations that most nonprofits also have to meet.
Forming the Corporation
Start with the name. It has to be distinguishable from any entity already on file, and a difference limited to a suffix, article, punctuation, or singular versus plural form does not count as distinguishable.1Justia Law. Arkansas Code 4-33-401 – Corporate Name You can search the Secretary of State’s online database for availability, and you can reserve a name for 120 days by filing an Application for Reservation of Entity Name with a $25 fee.2Arkansas Secretary of State. Application for Reservation of Entity Name
Then file the Articles of Incorporation. The articles must state the corporation’s name, its registered agent information, and whether it will have members.3Justia Law. Arkansas Code 4-33-202 – Articles of Incorporation Stating a specific purpose is optional; a general “any lawful activity” clause is permitted. If you intend to seek 501(c)(3) status, the articles need language restricting political activity, limiting purposes to exempt categories, and requiring assets to 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 needs a registered agent with a physical Arkansas address who is available during business hours to accept legal documents.6Justia Law. Arkansas Code 4-20-105 – Registered Agent Losing your agent without replacing them is a ground the Secretary of State can use to start administrative dissolution. Commercial registered agent services typically run $100 to $300 a year.
Get an Employer Identification Number from the IRS before opening a bank account or hiring anyone. The EIN application is free through the IRS website.7Internal Revenue Service. Get an Employer Identification Number Third-party sites that charge for this are unnecessary.
Required Officers and Directors
Arkansas law requires every nonprofit to have a board of directors, which holds all corporate powers and oversees the organization.8Justia Law. Arkansas Code 4-33-801 – Requirement for and Duties of Board The statutory floor is one director, but most nonprofits appoint at least three to spread oversight and meet IRS expectations for independent governance.
Unless the articles or bylaws provide otherwise, the corporation 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 the same time, which is common in smaller organizations. The president runs board policies and operations, the secretary keeps corporate records and meeting minutes, and the treasurer handles financial reporting. Additional officer roles can be added by the board.
Directors owe fiduciary duties of good faith, loyalty, and care. A director who signs off on financial decisions without reviewing them, or who approves insider transactions without proper disclosure, can face personal liability.
Bylaws and Governance Rules
Bylaws are the internal rulebook. They are adopted by the incorporators or the board and are not filed with the state, but they cannot conflict with Arkansas law or the articles.10Justia Law. Arkansas Code 4-33-206 – Bylaws They should cover how meetings are called, how directors and officers are elected or removed, and how the organization handles finances.
A few default rules under the Act are worth pinning down in your bylaws so they aren’t a surprise later. A majority of directors in office is a quorum for board action unless the bylaws set a different number. The board can act without a formal meeting only if every director signs a written consent describing the action taken.11Justia Law. Arkansas Code 4-33-821 – Action Without Meeting Boards often assume a majority written consent is enough; it isn’t.
If the nonprofit will have members, the bylaws must define who qualifies as a member, what members vote on, and how member meetings work.12Justia Law. Arkansas Code 4-33-701 – Members Some organizations give members the power to elect directors; others keep all authority in the board.
Arkansas law also lets nonprofits validate transactions between the corporation and an interested director, so long as the transaction was fair, or the material facts were disclosed and the board or members approved it.13Justia Law. Arkansas Code 4-33-831 – Director Conflict of Interest A written conflict of interest policy isn’t strictly required by Arkansas law, but the IRS asks about one on Form 1023 and strongly encourages adopting it.14Internal Revenue Service. Form 1023 – Purpose of Conflict of Interest Policy
The August 1 Annual Disclosure
Every Arkansas nonprofit must file an annual disclosure statement with the Secretary of State by August 1. It has to include the corporation’s name, jurisdiction of incorporation, registered agent information, principal office address, and the names and addresses of officers and directors.15Justia Law. Arkansas Code 4-33-131 – Annual Disclosure of Information There is no state filing fee.
Missing the deadline is the most common way Arkansas nonprofits lose good standing. Failure to file the disclosure, failure to maintain a registered agent, or failure to pay required fees are all grounds for administrative dissolution.16Justia Law. Arkansas Code 4-33-1420 – Grounds for Administrative Dissolution A dissolved nonprofit cannot legally operate, enter contracts, or keep its tax benefits. Reinstatement is available by filing the missing paperwork and paying outstanding fees, but the window is five years. After that, dissolution becomes permanent and the corporate name opens back up for other filers.
Signing a document submitted to the Secretary of State knowing it is materially false is a Class C misdemeanor.17Justia Law. Arkansas Code 4-33-129 – Penalty for Signing False Document
Charitable Solicitation Registration
If the nonprofit will solicit donations in Arkansas, it must register with the Secretary of State before any fundraising activity.18Justia Law. Arkansas Code 4-28-402 – Registration of Charitable Organizations Prior to Solicitation The registration is sworn under oath and must include a copy of the organization’s IRS tax-exempt status form. Registration renews annually. The Attorney General retains enforcement authority and can inspect registration records even though filings are made with the Secretary of State.19Arkansas Attorney General. Charitable Giving Soliciting without proper registration can lead to civil penalties and being barred from future fundraising in Arkansas.
Federal Tax Exemption Is Separate
Incorporating under Arkansas law does not make an organization tax-exempt. To receive federal 501(c)(3) status, you apply directly to the IRS. Form 1023-EZ is available to organizations that expect annual gross receipts of $50,000 or less and hold total assets under $250,000; the filing fee is $275.20Internal Revenue Service. Instructions for Form 1023-EZ Organizations above either threshold, or in excluded categories like schools and hospitals, must file the full Form 1023 with a $600 fee.21Internal Revenue Service. Form 1023 and 1023-EZ – Amount of User Fee
Once exempt, the organization must file an annual return with the IRS. The form depends on size:
- Form 990-N (e-Postcard) for gross receipts of $50,000 or less.
- Form 990-EZ for gross receipts under $200,000 and total assets under $500,000.
- Form 990 for gross receipts of $200,000 or more, or total assets of $500,000 or more.22Internal Revenue Service. Form 990 Series – Which Forms Do Exempt Organizations File
Late filings draw a penalty of $20 per day, capped at the lesser of $10,500 or 5% of gross receipts. For organizations with gross receipts over roughly $1 million, the daily penalty rises to $105 with a cap of $54,500.23Internal Revenue Service. Annual Exempt Organization Return – Penalties for Failure to File Three consecutive years of missed filings triggers automatic revocation of tax-exempt status, and getting it back means filing a new application and paying the full user fee again.24Internal Revenue Service. Automatic Revocation of Exemption for Non-Filing – Frequently Asked Questions
Nonprofits also have to issue Form 1099-NEC for payments of $600 or more to independent contractors during the year.25Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC Exempt status doesn’t excuse the reporting.
Federal law requires 501(c)(3) organizations to make their exemption application (Form 1023 or 1023-EZ), supporting documents, IRS determination letter, and three most recent annual returns available for public inspection.26Internal Revenue Service. Public Disclosure and Availability of Exempt Organizations Returns and Applications – Documents Subject to Public Disclosure
Voluntary Dissolution
When a nonprofit is ready to close, the board must approve a plan of dissolution that identifies how remaining assets will be distributed after debts are settled. If the organization has voting members, they must also approve the plan; for organizations without members, a majority of the board can authorize dissolution.27Justia Law. Arkansas Code 4-33-1401 – Dissolution by Incorporators or Directors and Third Persons For a 501(c)(3), leftover 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 $50.28Arkansas Secretary of State. Non-Profit Corporation Filing Fees Close any tax accounts with the Arkansas Department of Finance and Administration through the Arkansas Taxpayer Access Point.29Department of Finance and Administration. Close or Update Account File a final report on charitable solicitation registration if applicable. On the federal side, the final Form 990 (or 990-EZ) must include Schedule N describing the assets distributed, transaction fees, fair market values, distribution dates, and recipients.30Internal Revenue Service. Termination of an Exempt Organization An incomplete Schedule N is one of the more common dissolution mistakes.
Personal Liability Exposure for Directors
Two federal rules pull nonprofit board members into personal liability more often than they expect. The first is the excess benefit transaction penalty: if a director, officer, or other disqualified person receives compensation or benefits exceeding what is reasonable, the IRS can impose a 25% excise tax on the recipient and a separate 10% tax on managers who knowingly approved it. Failure to return the excess in time raises the recipient’s penalty to 200%.31Office of the Law Revision Counsel. 26 U.S. Code 4958 – Taxes on Excess Benefit Transactions
The second is the Trust Fund Recovery Penalty. If the nonprofit withholds income and employment taxes from employee paychecks and fails to remit them, the IRS can assess a penalty equal to the full amount of unpaid trust fund taxes against any responsible person who willfully failed to pay. Nonprofit board members are explicitly named as potential responsible persons.32Internal 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. A director with authority over finances can be liable even if daily payments were delegated to staff.
Arkansas law allows nonprofits to indemnify directors who acted in good faith and reasonably believed their conduct was in the corporation’s best interest, and to purchase directors and officers liability insurance. Building both into the bylaws is a normal part of setup.