Arkansas Application to be a Small Business Corporation

Application to be a Small Business Corporation
AR1103.08indd.indd
AR1103

STATE OF ARKANSAS
Election By Small Business Corporation

Federal Employer Identification Number (FEIN)

Election is to be Effective for AR Tax Year
Beginning (MM/DD/YYYY)

CLICK HERE TO CLEAR FORM

Federal Business Activity Code

Name of Corporation (Please print or type)

Date of Incorporation

Date Began Business in AR

Address

Date of Federal S Election

State of Incorporation

City

State

Zip Code

Corporation’s Telephone Number

(
Name and Title of Officer or Legal Representative who the State may call for Additional Information

)

Telephone number of Officer or Legal Representative

(

)

Fax

(

)

Email

A corporation may elect Subchapter S treatment for Arkansas income tax purposes only if it has elected Subchapter S treatment for federal
income tax purposes for the same tax year. The Arkansas election, with each shareholder’s consent, shall be filed with the Director of the
Department of Finance and Administration on forms prescribed by the Director.

Signature

Social Security Number
of Shareholer or FEIN

State of
Residence

Do Not write in shaded areas

Date(s)
Acquired

Shareholder Information
Check if family
member

Shareholder’s signature. For this election to
be valid, all shareholders must signify

# of Shares or
% Owned

Name, Address, City, State and Zip
code of each Shareholder
(Please print or type)

Date

NOTE: For this election to be valid, the consent of each stockholder must be shown on this form. If additional space is needed attach an AR1103
supplemental consent form or an additional schedule. Attach a copy of the IRS “NOTICE OF ACCEPTANCE AS AN S-CORPORATION” to Form AR1103.
Under penalties of perjury, I declare this Election is duly authorized and that the statements made to the best of my knowledge and belief are true, correct and
complete statements.
Officer’s Signature

Officer’s Title

Date

See Instructions-Important Notes
Mail Completed Form to: Corporation Income Tax Section, P.O.Box 919, Little Rock, AR 72203-0919

STATE OF ARKANSAS

Election By Small Business Corporation
PURPOSE
The Purpose of this election is to permit the undistributed taxable income of a “Small Business Corporation” to be taxed to the shareholders rather than the
corporation. The term “undistributed taxable income” means taxable income (as computed under the Income Tax Act of 1929 as amended) minus the sum
of (1) the tax imposed on certain capital gains and (2) the amount of money distributed as dividends out of earnings and profits of the taxable year.

INSTRUCTIONS
Subchapter S of the Federal Internal Revenue code of 1986, as amended,
and in effect as of January 1, 2009 has been adopted for Arkansas income
tax purposes. A corporation may elect Subchapter S treatment for Arkansas
income tax purposes only if it has elected Subchapter S treatment for federal income tax purposes for the same tax year. A copy of the Corporation’s
“NOTICE OF ACCEPTANCE AS AN S-CORPORATION” received from the
Internal Revenue Service must be submitted to approve the Arkansas Election, Form AR1103. The Arkansas election will be held in suspense until the
IRS Notice is received.

The election must be filed during the first seventy-five (75) days of the taxable
year. It shall be effective for the taxable year for which it is made and for all
succeeding taxable years unless it is terminated under provision of the law.
This form must be signed either by the president, vice president, treasurer,
assistant treasurer, chief accounting officer, or other corporate officer (such
as tax officer) who is authorized to sign.
At the shareholder’s option on the date of the election, their signatures may
be entered on the consent shown in the lower portion of the election Form
AR1103 filed by the corporation in place of preparing and attaching the consents described below.

Qualifying corporations may elect to be treated as a “Small Business (S) Corporation” for Arkansas income tax purposes. The election may be made only
if the corporation meets all seven (7) of the following requirements:
(1)
(2)

(3)
(4)
(5)
(6)
(7)

IN GENERAL: The consent to the election of the corporation by all shareholders at the date of election (which may be incorporated in one statement)
shall be attached to this form unless otherwise shown on the face. In addition to an affirmative statement shall set forth the name and address of the
corporation and of the shareholder, the number of shares of stock owned
by the shareholder, and the date(s) on which such stock was acquired. The
consent must be signed by both the husband and wife if they have a community interest in the stock or the income therefrom, and by each tenant in
common, each joint tenant, and each tenant by the entirety. The consent of
a minor shall be made by the minor or by his legal guardian, or his natural
guardian if no legal guardian has been appointed (even if the case of stock
held by a custodian for a minor under a statute patterned after the Uniform
Gifts to Minors Act). The consent of an estate shall be made by the executor
or administrator thereof. If the election is made before the first day of the
corporation’s taxable year, the consent of persons who became shareholders after the date of the election and on or before such first day shall be filed
as soon as practicable after such first day but in no event later than the last
day prescribed for filing the election and a copy shall also be filed with the
corporation income tax return.

It is treated as a Small Business Corporation with the Federal Government.
It has no more than one hundred (100) shareholders. However, if stock
is held by a husband and wife as joint tenants by the entirety, or tenants
in common or is community property for the income from which is community income, it shall be treated as owned by one shareholder.
It has only individuals or estates as shareholders.
It has no shareholder who is a nonresident alien stockholder.
It has only one class of stock.
S Corporations are permitted to hold C & S Corporate Subsidiaries.
It is a corporation organized under the laws of the United States or a
state or territory or it is a similar association taxed as a corporation.

If the corporation is the parent of one or more Qualified Subchapter S Subsidiaries (QSSS), the election must be accompanied by Federal Form 8869
for each subsidiary that will be filing with the corporation.
TO BE RECOGNIZED AS AN ARKANSAS S-CORPORATION

The annual Income Tax Return of a small business corporation is to be
submitted on Arkansas Form AR1100S, and filed with The Department of
Finance and Administration, Corporation Income Tax Section, P.O. Box 919,
Little Rock AR 72203-0919.

The following must be met:
1.

The business must be registered with the Arkansas Secretary of State.
(501) 682-1010

2.

The business must file with the Internal Revenue Service an Election
for Small Business Form (2553) and apply for a Federal Identification
Number (SS-4). (1-800-829-3676)

3.

The business must file with the State of Arkansas an Election by Small
Business Form (AR1103). (501) 682-4775.

All non-resident shareholders of corporations receiving income in the form of
distributions pursuant to the provisions of Act 51 of 1983 must file a properly
executed Arkansas Income Tax return with the Director of the Department of
Finance and Administration and remit the applicable Arkansas Income Tax
upon the amount distributed.
Failure to so report and remit on the part of any shareholder is grounds upon
which the Director shall be authorized to revoke the Corporation’s Subchapter
S Election and collect the tax from the Corporation by any manner authorized
by the Arkansas Income Tax Act of 1929 as amended.

For an election to be valid, all persons who are shareholders of the corporation on the first day of the corporation’s taxable year or on the day of election,
whichever is later, must consent to such an election. The Arkansas election
form is AR1103, and is to be obtained from and submitted to Corporation
Income Tax Section, P.O. Box 919, Little Rock, AR 72203-0919.

IMPORTANT NOTES
1.

Complete this form in duplicate. Send both copies to the Department of Finance and Administration and upon approval one will be returned to you for
proof of acceptance of your election.

2.

You may use AR1103, Supplemental Shareholder’s Consent Form if an additional list of shareholders is necessary.

AR1103 back (R10/08)
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