Corporate law forms the foundation for how businesses are created, governed, and operated. It establishes the rights and responsibilities of business owners—who may be called shareholders, members, or partners depending on the entity type—as well as those directors, managers, officers, or other persons responsible for managing the business. Corporate law also ensures that companies comply with applicable state and federal legal standards.

In Arkansas, corporate law touches every stage of a company’s life cycle, from initial formation and ongoing governance, to contract management and other operational matters, to major transactions such as mergers, and ultimately to dissolution. Whether you’re launching a new venture or managing a growing company, understanding the key principles of corporate law can help protect your interests and keep your business in good legal standing.

Defining Corporate Law

Corporate law—sometimes called business law—governs how corporations, limited liability companies (LLCs), partnerships, and other business entities are formed and managed. It encompasses many areas of law, including contracts, taxation, compliance, employment, and fiduciary duties.

The purpose of corporate law is to:

• Establish the legal framework for creating and operating a business,
• Protect investors, shareholders, and employees,
• Ensure accountability of corporate officers and directors, and
• Promote fair competition and compliance with state and federal laws.

Corporate Law in Arkansas

In Arkansas, corporate law is primarily governed by specific statutes enacted for each entity type, such as:

• Arkansas Business Corporation Act of 1987 (Ark. Code Ann. § 4-27-101 et seq.)
• Arkansas Uniform Limited Liability Company Act (Ark. Code Ann. § 4-38-101 et seq.)
• Arkansas Uniform Partnership Act (Ark. Code Ann. § 4-46-101 et seq.)
• Arkansas Uniform Limited Partnership Act (Ark. Code Ann. § 4-47-101 et seq.)
• Arkansas Nonprofit Corporation Act of 1993 (Ark. Code Ann. § 4-33-101 et seq.)

The Arkansas Secretary of State Business & Commercial Services Division (BCS) oversees many of the filings required under these laws and maintains public records for Arkansas entities. Businesses must remain compliant with the Secretary of State’s ongoing requirements to maintain good standing. This includes filing annual franchise tax reports with the Arkansas Secretary of State before May 1 of each year, as required by the Arkansas Corporate Franchise Tax Act of 1979 (Ark. Code Ann. § 26-54-101 et seq.).

Core Areas of Corporate Law

1. Business Formation

Corporate law defines how a business is legally created. This includes:

• Selecting an appropriate structure (LLC, corporation, partnership, or nonprofit).
• Filing the appropriate formation documents, such as Articles of Incorporation or Certificate of Organization, with the Arkansas Secretary of State.
• Drafting and executing key internal documents, like corporate bylaws and operating agreements.

The choice of business entity affects key matters such as taxation, owner liability, and management authority, making early legal guidance essential.

2. Governance and Management

Once formed, every business must adhere to applicable governance requirements. These governance matters may be established by default under applicable law or may be set forth—and sometimes modified from the default statutory provisions—in the company’s governing documents.

These governance matters typically include:

• Duties and responsibilities of the persons responsible for managing the business, such as directors, managers, and officers.
• Voting rights of shareholders or members.
• Record-keeping requirements, obligations for annual meetings, and the ability to act by written resolutions.
• The scope of fiduciary duties such as loyalty, care, and good faith.

In Arkansas, adhering to governance requirements and observing applicable corporate formalities is critical to protect the integrity of business decisions and prevent piercing the corporate veil, which could expose business owners to personal liability. Additionally, business entities must generally maintain a registered agent with the state, who is responsible for accepting service of process, notices, or other official communications on behalf of the entity. Keeping this information current is essential not only for compliance with Arkansas law but also to ensure that the entity’s responsible parties receive important notices and can respond as needed in a timely manner.

3. Contracts and Transactions

Corporate law helps ensure key contracts essential to the business’s operations, such as vendor agreements, leases, licensing and supply agreements, and employment agreements, comply with applicable legal requirements and are otherwise enforceable. It also plays a role in contracts related to major transactions outside the entity’s ordinary course of business, including:

• Asset purchase agreements involving a significant portion or substantially all of the business’s assets.
• Stock or membership interest purchase agreements in connection with the sale of an ownership interest. 
• Other agreements and ancillary documents associated with mergers, acquisitions, and reorganizations.

For Arkansas businesses, these agreements may raise issues under both state contract law and federal trade regulations.

4. Employment and Compliance

Corporate law overlaps with employment law in many areas. Many Arkansas employers must comply with various employment laws, such as:

• Wage and hour laws under the Arkansas Minimum Wage Act and federal Fair Labor Standards Act (FLSA).
• Arkansas Workers’ Compensation Law
• Anti-discrimination laws, including Title VII of the federal Civil Rights Act and the Arkansas Civil Rights Act as well as Americans with Disabilities Act.
• Workplace safety standards under OSHA and state law.

Care must be taken to determine whether an employer is subject to a particular employment law and then whether the employer’s policies or conduct complies with applicable laws. Maintaining proper employee handbooks, contracts, and human resources (HR) policies helps reduce legal exposure.

5. Taxation and Reporting

Forming and operating a business involves numerous tax considerations at the federal, state and even local levels. 

Key requirements include:

• Filing annual franchise tax reports with the Arkansas Secretary of State and paying the associated franchise tax before May 1 each year.
• Determining and complying with applicable federal tax obligations, which may include employment taxes, separate income tax payments, or reporting requirements, even if the entity itself owes no tax.
• Determining and complying with applicable state and local tax obligations, which may include sales and use tax imposed by state, county and even city governments as well as state income tax obligations.

Failure to meet certain reporting requirements or pay applicable taxes can result in penalty and interest charges, loss of good standing with the Secretary of State, and, in some cases, eventual administrative dissolution.

6. Mergers, Acquisitions, and Dissolutions

Corporate law also governs how companies combine or close. 

• Mergers and acquisitions must comply with the applicable Arkansas statutes for the entity type, and required approvals must be properly obtained and documented.
• Dissolutions (voluntary or involuntary) require formal filings with the Secretary of State, payment of outstanding taxes, and proper notice to creditors.

These processes are highly technical, and careful attention is required to ensure compliance with all legal requirements. Proper documentation and authorization protect the owners and individuals managing the business and help ensure that the actions will be respected.

7. Corporate Law and Dispute Resolution

When disagreements arise between business owners and those responsible for managing the business, corporate law provides mechanisms for resolution.
Common corporate disputes in Arkansas involve:

• Claims of breaches of fiduciary duties.
• Allegations of shareholder oppression or disputes involving minority owners.
• Contract breaches or violations of non-compete agreements.
• Derivative lawsuits brought on behalf of the corporation.

Many disputes can be resolved more efficiently and cost-effectively through negotiation or mediation, but some may escalate to litigation. A key defense against future disputes is ensuring that expectations and relationships are clearly defined in the company’s governing documents from the outset.

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Why Corporate Counsel Matters

Corporate law is complex and interconnected with many other legal areas, from tax compliance to employment law. Engaging a knowledgeable corporate law attorney helps ensure your business remains compliant, minimizes exposure to potential liability, and protects its long-term interests.

• Attorneys can assist with:
• Representing the business in disputes.
• Drafting and reviewing contracts.
• Advising on governance and fiduciary duties.
• Filing annual reports and maintaining good standing.
• Structuring transactions and acquisitions.

Stay Compliant, Stay Protected.

Corporate law touches every stage of a business’s life cycle—from its formation and daily operations to its eventual sale or dissolution. For Arkansas business owners, compliance with state statutes, Secretary of State reporting requirements, and tax obligations is essential to maintaining good standing, preserving legal protections and ensuring business continuity.

Whether you’re forming a new company, expanding operations, or navigating a complex transaction, experienced corporate counsel can help you stay compliant and make informed decisions.

Contact RMP Law

RMP Law advises Arkansas businesses of all sizes on entity formation, compliance concerns, governance matters, contracts, and transactions. Our attorneys understand the nuances of Arkansas corporate law and work with business owners to protect their investments and achieve long-term success.
Contact RMP Law today to schedule a consultation and ensure your business is structured properly, compliant, and built for growth.

DISCLAIMER: The information provided on this website does not constitute legal advice. Instead, all information, content, and materials available on this site are for general informational purposes. Information on this website may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.