Sole Proprietorship in MO

12 Replies

Hello all,

I'm currently trying to find out if I need to register a sole proprietorship in MO and what kinds of costs that entails. I'm currently looking to purchase my first property. Everything is going under my name on this one and I will be getting a 1M umbrella policy. Once I buy more homes I will move into an LLC. I've been looking online and it seems a little unclear on if I need to register myself anywhere when I'm renting property. Can anyone shed some light on this?

Thanks,

Carlos O.

It's not required by the state, but the city or county where you invest may have such regulations. Where are you looking?

Originally posted by @Sylvia B. :

It's not required by the state, but the city or county where you invest may have such regulations. Where are you looking?

Hi Sylvia,

I'm looking at Kansas City, MO.

I'm not aware of such a requirement in Kansas City. However, there is a rental registry requirement. It's a simple online process and is free but there's a fine for failure to register. 

Sorry to disagree, maybe, if you use your personal name, there is no registration requirement at the state, but that isn't a self proprietorship, that is a business formed that is not incorporated, but held individually. You do have registration requirements if you use any name other than your given name. If you are not registered you'll have issues with your bank account and legal proceedings.  

KC is also KC, Mo. proper, there are several municipalities in that mix and some say "KC" meaning the KC area, so make sure you are in KC proper too. There is the Kansas side, but you said MO.

For a few properties, I wouldn't bother with an LLC, especially if it is a foreign corporate filing (being the Republic of Cali), you insurance is sufficient, select a good manager, they will be insured as well and Mo. is pretty landlord friendly, IMO, so there really isn't a real shield for liability from an LLC as those promoting entities lead you to believe. Especially if you have a convoluted LLC arrangement there and here, the management of the LLC(s) may complicate your life and offer more avenues for an attorney to blaze right through to you personally anyway.

That's to SFDs, now if you are holding some 24 unit complex or such, mire structure may be warranted.

Here, you will need an attorney to represent you in court, like evictions if you are incorporated, generally, a judge may allow you to speak to matters and bring suit, but strictly speaking, you'll need representation. If you hold it as a proprietorship or in your name, you may represent yourself. :) 

Originally posted by @Bill Gulley :

Sorry to disagree, maybe, if you use your personal name, there is no registration requirement at the state, but that isn't a self proprietorship, that is a business formed that is not incorporated, but held individually. You do have registration requirements if you use any name other than your given name. If you are not registered you'll have issues with your bank account and legal proceedings.  

KC is also KC, Mo. proper, there are several municipalities in that mix and some say "KC" meaning the KC area, so make sure you are in KC proper too. There is the Kansas side, but you said MO.

For a few properties, I wouldn't bother with an LLC, especially if it is a foreign corporate filing (being the Republic of Cali), you insurance is sufficient, select a good manager, they will be insured as well and Mo. is pretty landlord friendly, IMO, so there really isn't a real shield for liability from an LLC as those promoting entities lead you to believe. Especially if you have a convoluted LLC arrangement there and here, the management of the LLC(s) may complicate your life and offer more avenues for an attorney to blaze right through to you personally anyway.

That's to SFDs, now if you are holding some 24 unit complex or such, mire structure may be warranted.

Here, you will need an attorney to represent you in court, like evictions if you are incorporated, generally, a judge may allow you to speak to matters and bring suit, but strictly speaking, you'll need representation. If you hold it as a proprietorship or in your name, you may represent yourself. :) 

 Bill, you brought up some questions for me since I am meeting a lawyer today to form an llc for my rental and fix and flip business which is just getting started. I have only one rental in kc mo right now but will expand that side of the business slowly with one unit per year or so. If I understand you correctly I will have to register with a rental registry now that I am starting this llc is that right? And you say that an llc does not really provide a shield from personal liability anyway?! What then is the benefit of forming an llc??? It almost sounds as though holding the business personally is better so long a as i have appropriate insurance coverage. Anyone have any thoughts?

Best defense as to liability is first, good management, then insurance!

I don't know about the city registry but many have them, here you need a business license, might check that and they may want personal property taxes on business property, fridge, free standing stove, other amenities not attached.

The LLC can offer some protection, IMO, not so great for just a few properties considering the commercial loans, insurance can be different, but most of all, the company must be properly managed, no comingling of accounts, registrations, filings and it needs to be capitalized to be seen as a true independent entity.

Advantages are, a tad more walls for liability if done right, business expenses you may not have without the entity, but it's still money spent, name may hide you initially, you have a company name to brand and advertise. Business reasons more than liability protection. Attorneys get paid to form entities and represent them, might keep that in mind.

SFDs really carry a low risk if they are well maintained, I've owned them in my name without issue. I've also had LLC, Sub-S, C-corps and C-corp 501 C 3s, the non-profit offers the greatest liability protection of all, the nature of doing something for the public benefit without profit (but you get paid a salary). Each has it's tax and business advantages. It's up to you, but you must maintain the company too. :)

Originally posted by @Bill Gulley :

Sorry to disagree, maybe, if you use your personal name, there is no registration requirement at the state, but that isn't a self proprietorship, that is a business formed that is not incorporated, but held individually. You do have registration requirements if you use any name other than your given name. If you are not registered you'll have issues with your bank account and legal proceedings.  


The OP said he was going to start out operating under his own name. He seemed to want to know if he had to register as a landlord in MO. 

Interesting how a post is understood differently by those who read it.

This FAQ page may be helpful to those wishing to do business in MO.

Yes, it was the formation of the proprietary aspect, I could use my name as a business name, it's rather foggy, thought we'd cover the bases. Good to always check with the Sec. of State and local business license folks. :) 

Originally posted by @Sylvia B. :
Originally posted by @Bill G.:

Sorry to disagree, maybe, if you use your personal name, there is no registration requirement at the state, but that isn't a self proprietorship, that is a business formed that is not incorporated, but held individually. You do have registration requirements if you use any name other than your given name. If you are not registered you'll have issues with your bank account and legal proceedings.  

The OP said he was going to start out operating under his own name. He seemed to want to know if he had to register as a landlord in MO. 

Interesting how a post is understood differently by those who read it.

This FAQ page may be helpful to those wishing to do business in MO.

Yeah, I'm just looking to operate under my full name. Thanks a lot for sharing that page it really helps. It seems I don't have to register anything at the state level unless I use a fictitious name. Yeah, I'm just looking to operate under my full name. Thanks a lot for sharing that page it really helps. It seems I don't have to register anything at the state level unless I use a fictitious name. Like @Bill and @Vicki mentioned, there may be some county or city requirements where I have to register. I'll certainly take a look into that next.

@Carlos O.  @Thomas Hallensleben  

@Bill Gulley  made a good point that there are many jurisdictions in the KC metro area. The rental registry I mentioned is for the city of Kansas City, Missouri only. 

The issue of doing business in your own name vs an entity is something entirely different. 

In KCMO, you have to register rental property whether you own it in your own name or as an entity. I only mentioned the rental registry because I think many are unaware of it and I've never seen in discussed in the forums. Here's a link to the registry: http://kcmo.gov/neighborhoods/neighborhood-preservation/rental-property-registration/

I'm not sure about the other municipalities because my property is in KCMO. 

I hope I didn't muddy it up for you too much!

Originally posted by @Vicki Stewart :

@Carlos O. @Thomas Hallensleben  

@Bill Gulley  made a good point that there are many jurisdictions in the KC metro area. The rental registry I mentioned is for the city of Kansas City, Missouri only. 

The issue of doing business in your own name vs an entity is something entirely different. 

In KCMO, you have to register rental property whether you own it in your own name or as an entity. I only mentioned the rental registry because I think many are unaware of it and I've never seen in discussed in the forums. Here's a link to the registry: http://kcmo.gov/neighborhoods/neighborhood-preservation/rental-property-registration/

I'm not sure about the other municipalities because my property is in KCMO. 

I hope I didn't muddy it up for you too much!

 Not at all. I'm so glad I asked about this because otherwise I would have never thought about checking out city or county regs about registering rentals. Thanks!

And there ya go, anyone dealing in far away places should be checking local requirements. Remember, all RE is local!  :)

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