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Rental property LLCs in Arkansas

Yes, you can hold an Arkansas rental in an LLC. The Certificate of Organization costs $45 online ($50 on paper), and every LLC owes a $150 franchise tax report by May 1 each year. Little Rock requires rental registration; Fayetteville doesn't have a general registry but does have a landlord-representative rule. Forming the LLC doesn't move your deed or stop your lender from calling the loan.

Last checked 2026-10-21. General information, not legal or tax advice.

Local rental rules come first

Little Rock: yes, registration is required. All rental properties in the city must be registered and renewed every year. Owners or managers of three or fewer units pay $35 a year; four or more units pay $200 plus $7 per unit for the first 100 units and $3.50 per unit after that. Registrations run through December 31, and failing to register can bring penalties or a municipal fine (City of Little Rock Rental Housing Registration Program). Owners of three or fewer units apply through the city's Rental Registration Business License Application, which asks about each unit, including whether it's a short-term rental (29 days or less) (littlerock.gov).

Fayetteville: no general rental registry, but two rules apply.

  • Anyone, including an LLC, that owns or controls more than two residential rental properties in Fayetteville, and every short-term-rental owner, must designate a Landlord's Representative who lives or works in Washington, Benton, Crawford or Madison County, and list them on the city's free online registry. Changes must be entered within seven days, and the representative's contact information is public (Fayetteville Code § 120.02; fayetteville-ar.gov).
  • A landlord renting three or more residential dwelling units needs a city business license (Fayetteville FAQ).

Statewide: minimum quality standards. For residential leases entered into or renewed after November 1, 2021, Arkansas implies a requirement of hot and cold running water, electricity, potable water, code-compliant sewer and plumbing, a functioning roof and building envelope, and working heat and air if the unit had them at signing. If rent is current and the landlord doesn't fix a problem within 30 days of the tenant's written notice, the tenant's sole remedy is to end the lease without penalty and recover the deposit (Ark. Code § 18-17-502, enacted by Act 1052 of 2021).

What the LLC protects, and what it doesn't

Arkansas's LLC law says: "A debt, obligation, or other liability of a limited liability company is solely the debt, obligation, or other liability of the company. A member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the company solely by reason of being or acting as a member or manager. This subsection applies regardless of the dissolution of the company." (Ark. Code Ann. § 4-38-304(a)). The protection is for liability that comes solely from being a member or manager.

  • Guarantees still bind you. A personal guarantee you sign for a lender is your own promise.
  • Your own acts are yours. A repair you make yourself, or your own negligence, isn't shielded by the LLC; ask an Arkansas attorney.
  • It isn't insurance. The LLC still needs coverage that pays claims and defense costs.

One LLC, or one per property?

One LLC holding three houses puts all three in reach of one judgment; separate LLCs keep them apart, at $45 to form and $150 a year in franchise tax each. Arkansas does offer series LLCs — the Secretary of State keeps series LLC forms on its Miscellaneous Forms page (sos.arkansas.gov). Ask an Arkansas attorney whether a series fits your setup. The tradeoffs: Should you have a separate LLC for each rental property?. Other states: Mississippi · Alabama · Indiana · Louisiana · Tennessee.

Form it where the property is, or register there

A foreign LLC may not do business in Arkansas until it registers with the Secretary of State, and until then it can't bring a lawsuit in Arkansas (Ark. Code § 4-38-902). Form FL-01 costs $270 online or $300 on paper, and a registered foreign LLC also owes the $150 annual franchise tax (SOS foreign LLC fees; franchise tax report).

What doesn't count as doing business includes "owning, without more, property" and an isolated transaction (Ark. Code § 4-38-905). Renting a property out is more than owning it, so plan on registering and confirm with an Arkansas attorney. That means two states' filings and fees, which is why a local LLC is usually simpler.

What it costs the state

  • Certificate of Organization (LL-01): $45 online / $50 paper (SOS LLC fees)
  • Annual franchise tax report: $150, due May 1; no extensions; late filing adds penalty plus interest (SOS 2026 LLC franchise tax form; A.C.A. § 26-54-101 et seq.). Online filing adds a $5 processing fee (SOS franchise tax page).
  • Name reservation: $22.50 online / $25 paper; registered agent change: no fee (SOS LLC fees)
  • Foreign LLC registration (FL-01): $270 online / $300 paper
  • EIN: free from the IRS.

The state won't accept other business filings from an entity that hasn't paid its franchise tax, and the tax keeps accruing even after revocation until the LLC is dissolved (SOS franchise tax page). Compare what services charge on top: LLC services compared.

Forming the LLC, in order

  1. Pick a name containing "limited liability company," "limited company," or an abbreviation like LLC or L.L.C. (Ark. Code § 4-38-112(a), enacted by Act 1041 of 2021).
  2. Name an Arkansas registered agent.
  3. File the Certificate of Organization (LL-01), with the no-fee Franchise Tax Registration form (SOS LLC fees).
  4. Write an operating agreement.
  5. Get an EIN; open the LLC's bank account.
  6. Register with the city (above).

Forming the LLC doesn't move your deed

Putting a rental you own into the LLC takes a deed from you to the company. Record the signed deed with the county recorder of deeds where the property sits; that's also where the transfer-tax stamps or exemption affidavit go (DFA report on the Real Estate Transfer Tax).

Transfer tax. Arkansas taxes deeds at $3.30 per $1,000 of consideration over $100 (DFA; Ark. Code § 26-60-101 et seq.). But a conveyance between an LLC and its member "incident to the organization … [or] capitalization" of the LLC is exempt (Ark. Code § 26-60-102(11), listed in DFA's report on the tax). Have an Arkansas attorney or title company prepare the deed and confirm the exemption fits your transfer.

Check the mortgage before you transfer

Federal law lets a lender enforce a due-on-sale clause; the exceptions for 1–4 unit homes don't include a transfer to an LLC (12 U.S.C. § 1701j-3(d)). Fannie Mae allows a transfer to an LLC the borrower controls for loans it acquired on or after June 1, 2016 (Fannie Mae Servicing Guide D1-4.1-02). Ask your servicer in writing before you sign.

Insurance and taxes

Tell your insurer before title moves. A single-member LLC is disregarded for federal income tax unless it elects corporate treatment (IRS). The $150 franchise tax applies regardless of income.

Keeping each LLC in good standing

File the franchise tax report and pay $150 by May 1, every year, for every LLC. Unpaid franchise tax can lead to revocation (SOS franchise tax page). In Little Rock, renew the rental registration by December 31.

Before you file or transfer a property

  • Attorney or title company: the deed and the transfer-tax exemption
  • Servicer: is the transfer allowed?
  • Insurance agent: named insured, coverage
  • CPA: federal and state reporting
  • City: Little Rock registration or Fayetteville representative/license
  • Calendar: May 1 franchise tax; Dec 31 Little Rock renewal

Form it with Corpus

Corpus prepares and files your Certificate of Organization and includes the first year of registered-agent service. The Arkansas page shows the current price. Corpus isn't a law firm: the deed, the loan and city registration are separate steps.

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Sources

Last checked 2026-10-21. Corpus is not a law firm and does not provide legal or tax advice.