If you're thinking about owning a rental property in Oklahoma, creating a Limited Liability Company (LLC) for your real estate business is a smart move. LLCs are a popular type of business organization for individuals looking to protect their personal assets, limit personal liability, and enjoy tax benefits. In this article, we'll discuss how to create a rental property llc in oklahoma.
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Step 1: Choose a Name and Verify its Availability
Oklahoma requires all LLCs to have a unique name. Before you register, you'll want to verify the availability of your preferred company name. You can easily search the Secretary of State's website for existing LLCs or use an online search tool.
If the name is available, you can go ahead and reserve the name. You can do this by filing an Application for Reservation of Name with the Oklahoma Secretary of State. This is a non-refundable process that enables you to reserve the name for up to 60 days. This step isn't compulsory, but it's recommended if you don't want someone else taking your name while you're setting up your LLC.
Step 2: Register the LLC with the Secretary of State Oklahoma
Once you decide to form your rental property LLC in Oklahoma, you need to register it with the Oklahoma Secretary of State. You can do this by filing Articles of Organization. The current filing fee for Articles of Organization is $100, and you can file them either:
- By mail: You need to download the Articles of Organization form in PDF form, fill it out and mail it to the Oklahoma Secretary of State along with a $100 check.
- Online: You can use the Secretary of State Oklahoma’s online filing service to file the creation of an LLC. With the online process, you will need to create an account and create your forms.
The filing process typically takes around 2-4 weeks to process, but you can expedite it by paying an extra $25. During this process, you must appoint a registered agent, who will act as your LLC’s main point of contact. The registered agent must be an individual or business entity who is authorized to do business in Oklahoma.
Step 3: Get an EIN from the IRS
An EIN (Employer Identification Number) is a crucial requirement if you want to carry out business legally. This number is usually known as a Federal Tax ID and is used to report tax information to the IRS and to identify your LLC. If your LLC is a single-member LLC, you may be able to use your social security number instead of your EIN.
Obtaining an EIN is free, and you can apply for it online or by mail. The process can take 4-6 weeks by mail, but the turnaround can be virtually instant if done online.
Step 4: Create an LLC Operating Agreement
An Operating Agreement is a document describing how your LLC will handle important operational issues, including profit sharing, management responsibilities, decision-making processes, and more.
While Oklahoma law doesn’t require an Operating Agreement for LLCs, having one is a smart move. Lack of an operating agreement can worsen misunderstandings with business partners, confusion in abrupt changes, and makes the structure less solid.
Step 5: Obtain Necessary Licenses and Permits
As a landlord in Oklahoma, you may be subjected to different regulations depending on city jurisdictions. At the local level there might be additional permits that might apply to your situation.
For Oklahoma residential locations hired and uninhabited multi-family housing must be purified each year. Landowners or proprietors in general hold any expenses with flushing.
Conclusion
Creating an LLC as a rental property owner in Oklahoma is a valuable investment. Setup time can take anywhere from a few weeks up to a month, but the associated protections provided by reducing personal liability, ease of accounting, reduced audit, simplified solo-ownership transfer policies, asset protection, and more far outweigh the initial setup costs and time. Following these title-steps has created a clear outline for building your Oklahoma LLC, no matter how your individual needs align or approach company regulations. Starting A Rental Property LLC IN Oklahoma is an attainable goal.
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