Creating a Rental Property LLC in Missouri

Discover how a Rental Property LLC in Missouri can enhance your real estate investments and asset protection strategies. Delve into our comprehensive guide for valuable insights and expert advice.

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Owning rental property in Missouri is a great way for you to make extra income or operate a full-time business. Regardless of how many properties you own, forming a limited liability company (LLC) provides important protections.

Not only are LLCs easy to create, but the liability protection, tax benefits, and flexibility in management style make them a great option for real estate investors. We can help you form a rental property with our Missouri LLC Formation Service. And after formation, our other products and services can help make running your rental property business as smooth as possible.

How to form an LLC for your Missouri rental property

Forming your LLC for rental property in Missouri doesn’t have to be a stressful experience. We can help. Here is what to know before creating a rental property LLC in Missouri. 

Step 1: Name Your Missouri LLC

Deciding on a business name is a fun way to personalize your company and give potential clients some insight into what you are about. Follow all Missouri LLC naming law statutes and ensure that no one else is using your name or one that is similar to it. 

Step 2: Appoint a Registered Agent

Registered agent appointment is a mandatory part of forming an LLC in Missouri. A registered agent receives all legal and business correspondence for the company and must have specific availability. Let us take this part off your plate and help you find a Missouri registered agent that fits your needs. 

Step 3: File Missouri Articles of Organization

To officially form your rental property LLC in Missouri you’ll need to file Articles of Organization with the Missouri Secretary of State. Acceptance of this document officially forms your LLC. At this point, you’ll already need to have your company name and registered agent. You’ll also provide the company purpose, events that may cause dissolution, contact information for the LLC organizers, and signatures of the organizers. 

Step 4: Create an Operating Agreement

Missouri doesn’t require that you file your Operating Agreement with the Secretary of State, but creating the document is mandatory. Your LLC Operating Agreement details how the business will be run including rules and regulations, member rights and responsibilities, voting structure, profit allocation, dispute resolution, and more. We offer a customizable Operating Agreement Template to get you started. 

Step 5. Apply for an Employment Identification Number (EIN)

Your Employer Identification Number (EIN) is issued by the IRS and allows you to open business accounts and collect taxes. 

Transfer property to LLC

If you have an existing property, you’ll transfer that property to the limited liability company by filing a notarized, updated deed with the county recorder of deeds. If there’s a mortgage or loan on the property, inform the lender about the transfer. They’ll need to update paperwork and may rework the terms of the agreement. It is best to consult with the lender prior to the transfer. 

Tenant agreements

Property leased prior to the LLC formation will need updated lease agreements. Inform tenants of the change and edit the current rental agreement to reflect the proper legal owner of the property. 

What to know before creating a rental property LLC in Missouri

There are several benefits to creating a Missouri real estate LLC including protection of your personal assets, tax benefits, and more. 

Benefits of creating LLCs for rental properties in Missouri

Liability Protection

Limited liability companies transfer liability to the company. The LLC owner is not personally liable for the business’s debts or legal liabilities. Your personal assets are generally not at risk. 

Pass-Through Taxation 

Rather than paying corporate taxes and income taxes, pass-through entities “pass-through” to the limited liability company members’ personal income tax returns. Therefore, all profits are only taxed once, avoiding double taxation. 

Separation of Business and Personal Finances

Forming a rental property LLC in Missouri allows you to open separate accounts for your business finances. It’s important to keep personal expenses and assets separate from business finances. Taxes are difficult enough as it is. Don’t make it harder by co-mingling these funds. 

Series LLC for Real Estate Investors in Missouri

A series LLC in Missouri is a special type of LLC that provides individual protections to separate segments or “series” of the company. This structure is commonly used for real estate businesses with multiple properties and parent companies with separate sub-brands. Each series has its own accounts, assets, and liabilities. The financial and legal liabilities of one series don’t carry over to another series in the company. The formation process is similar but requires you to file a separate form. 

Who should form a Missouri LLC for their rental property?

Any landlord — regardless of how many or what type of property they own — can benefit from forming a rental property LLC in Missouri. If you haven’t purchased rental properties yet, but intend to, this may be the best time to form your limited liability company. This allows you to put the property deed directly into the LLC’s name without having to go through the transfer of title process. 

How we can help with your rental property LLC in Missouri

Don’t risk opening yourself up to personal liability that can easily be avoided. Forming an LLC also gives you a great foundation to grow your Missouri rental property business. We can help simplify the process. Use our services to help you form your LLC, write your business plan, and keep you in compliance. We have excellent tools and services designed specifically to make it easier to own and run your business. 

Missouri LLC for Rental Property FAQs

  • Any landlord can benefit from creating a Missouri real estate LLC. Take advantage of protection for your personal assets, tax benefits, and more.

  • Follow all Missouri LLC naming laws. Conduct a Missouri LLC name search and ensure that no one else is using your name or one that is similar to it.

  • If you are only conducting business in Missouri, you don’t need to register in another state.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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