Arkansas Code of 1987 (2024)
Title 26 - TAXATION (§§ 26-1-101 — 26-82-119)
Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108)
Chapter 54 - CORPORATE FRANCHISE TAXES (§§ 26-54-101 — 26-54-116)
Section 26-54-114 - Nonpayment of franchise taxes - Definitions

• (a) A corporation or limited liability company owing past-due franchise taxes to the Secretary of State may not:
  • (1) File forms or documents related to that corporation or limited liability company;
  • (2) Create a new legal entity in this state; or
  • (3) Obtain authority to do business in this state.

• (b) A person or individual substantially connected to any corporation or limited liability company that owes past-due franchise taxes to the Secretary of State may not:
  • (1) File forms or documents related to that corporation or limited liability company;
  • (2) Create a new legal entity in this state; or
  • (3) Obtain authority to do business in this state.

• (c) As used in this section:
  • (1) "Past-due franchise taxes" means only those taxes owed three (3) years prior to the year in which the current filing is presented;
  • (2) "Past officer or director" means a person or individual who was associated with the corporation or limited liability company at any time during its charter that the corporation or limited liability company was responsible for nonpayment of franchise taxes; and
  • (3) "Substantially connected" means a present officer, director, member, or manager or a past officer, director, member, or manager of a corporation.

• (d) An individual who is an incorporator or organizer of a corporation or limited liability company shall not be considered to be substantially connected to a corporation or limited liability company that owes past-due franchise taxes to the Secretary of State.

• (e) Each corporation, subject to this chapter, shall file with its original articles of incorporation or certificate of organization the name of at least one (1) individual who is substantially connected to the corporation and is responsible for payment of franchise taxes.

• (f) Any current or past officer or director that has been added to a corporation without his or her permission shall be removed as an officer or director of the corporation by the Secretary of State and not held responsible for past-due franchise taxes, if the officer or director submits:
  • (1) A copy of a report filed with a local, state, or federal law enforcement entity that states the officer or director has been fraudulently added to the corporation; and
  • (2) A statement, prescribed by the Secretary of State, signed by the officer or director, that states the officer or director was added to the corporation without his or her permission, with the following declaration:

    "I declare, under the penalties of perjury, that the foregoing statements are true to the best of my knowledge and belief."

Amended by Act 2023, No. 459,§ 11, eff. 8/1/2023.

Amended by Act 2021, No. 523,§ 23, eff. 4/1/2021.

Amended by Act 2019, No. 819,§ 23, eff. 5/1/2021.

Acts 2001, No. 1549, § 1.