How to Start a Property Management Company in Arkansas: Separate Broker License, No Unit Exemption, 2 Years or 7 Units

If you plan to manage rental houses, apartments, or commercial space for other owners in Arkansas, understand one thing before you form an LLC: property management is licensed on its own track. A real estate sales license does not cover it, and the Arkansas Real Estate Commission (AREC) has no small-portfolio exemption. A paid third-party manager of even one unit needs a license. This guide walks through the steps in the order most new owners should take them, with the state fees and deadlines we can verify and clear notes on what to confirm directly with the agency. Anyone searching for an arkansas property management license or a property management license Arkansas needs to sort out the license first, then the entity, then the local and tax registrations.

Disclaimer: This article is informational content, not legal or tax advice. Licensing rules, fees, and deadlines change. Confirm current requirements with the agencies named here, and consult a qualified Arkansas attorney or CPA before making decisions about entity structure, trust accounts, employment, or taxes.

What You Need Before You Start

Gather these items before you begin the filings:

• A business name you have checked in the Secretary of State business search
• A registered agent with a street address in Arkansas, since a P.O. Box is not acceptable
• Certificate of Organization for Limited Liability Company (Form LL-01) for your LLC
• A budget for $45 online ($50 on paper) for the LLC filing and $150 for the first annual franchise tax report
• Course transcripts or completion certificates for the education hours required for your license level
• Records of your prior management experience, including dates, unit counts, and the name of any supervising broker
• Funds for a background check, which is part of the license application (confirm the cost with AREC)
• A business bank account for the company, and a plan for a separate trust account for tenant and owner funds
• Login credentials for the Corporations Online Filing System and, if you have employees or sell taxable items, the Arkansas Taxpayer Access Point (ATAP)

Step 1: Work Out Who Needs a License

AREC, which sits within the Department of Labor and Licensing, licenses property managers separately from sales brokers under A.C.A. 17-42-103 and 17-42-303. There are two levels. A property management broker license lets you run the management business. A property management associate license covers someone who works under a broker.

The owner of a company that manages property for other people for pay usually needs the broker license. A.C.A. 17-42-104 lists the people who are exempt from licensing, including:

• Owners and policy-making officers or managers of an owning entity, when managing property that entity owns
• An uncompensated attorney in fact
• A resident manager who lives on the premises
• Salaried or hourly leasing employees of a licensed broker or owner

Two points matter for a new company. First, a company that manages only property owned by its own members may fall under the owner exemption. Once you manage property for an outside owner for pay, that exemption no longer covers the work, and you need a licensed broker. Second, the leasing employee exemption as written covers salaried or hourly staff. If you plan to pay leasing agents on commission, ask AREC how that arrangement is treated before you make an offer.

Step 2: Complete the Education Requirement

Broker applicants complete up to 60 hours of education. Thirty of those hours cover topics such as landlord-tenant law, fair housing, the Americans with Disabilities Act, trust accounts, and contracts. The other 30 cover commission property management supervision best practices. Associate applicants complete up to 30 hours.

Ask AREC for its list of approved providers before you pay for a course. Courses from providers the commission does not recognize will not count toward your application.

Step 3: Document Your Experience Carefully

A broker applicant must meet one of these three experience paths:

1. Two years working as a property management associate
2. Two years managing at least 7 residential or commercial units
3. A combination of the two that totals 2 years

The AREC experience form asks for each property's address, management dates, type, unit count and whether you had a personal interest in it. Keep a dated log for every property you managed, with the unit count, the owner, the role you played, and a contact who can confirm the work. Build the log now, even before you are ready to apply.

Step 4: Form the LLC

Most owners form a Limited Liability Company. Filing is handled by the Arkansas Secretary of State, Business and Commercial Services Division.

Name your company correctly. The name must contain Limited Liability Company or Limited Company, or one of the abbreviations L.L.C., L.C., LLC, or LC. You may abbreviate Limited as Ltd. and Company as Co. A name ending in Inc. will be rejected for an LLC. If the company performs a professional service, it must use Professional Limited Liability Company or the PLLC abbreviation instead, and the name cannot include a non-member's name except a deceased member. Check whether this rule applies to your planned name. The Secretary of State distinguishes names for filing purposes, but issuing a name does not give you an exclusive right to use it, so run a trademark search as well.

File Form LL-01. The Certificate of Organization for a Limited Liability Company (Form LL-01) carries a $45 filing fee online or $50 on paper. You can file through the Corporations Online Filing System, mail the form, or drop it off. The Secretary of State's Business Services FAQ says most filings are completed within two business days of receipt. The FAQ also says in-person drop-offs currently carry a 48 hour turnaround. The Secretary of State does not publish an expedited service or fee for entity filings.

Appoint a registered agent. Every registered entity must keep a registered agent who can accept legal papers. The agent needs a street address in Arkansas, and the agent must be located there. You can serve as your own agent if you have a qualifying Arkansas street address, or you can hire a commercial registered agent. Changing the agent later is filed with the Secretary of State at no fee.

Step 5: Register a Trade Name if You Need One

If your company will operate under a name other than its exact legal name, such as a brand for your management services, file a fictitious name. An LLC files this with the Secretary of State at $22.50 online or $25.00 on paper, using the form at the Secretary of State LLC forms page. Sole proprietors do not use the Secretary of State. They record the name with their county clerk, and county recording fees are set locally, so confirm the amount with that office.

Step 6: Apply for the AREC License

Submit the license application to AREC once your education and experience records are complete. State law sets fee ceilings of $80 for a broker license and $60 for an associate license, for both original and annual renewal applications, and a background check is part of the process. AREC publishes the amounts it actually charges on its fee schedule, so check that schedule for the current figure before you budget. If AREC's fee differs from the ceiling, follow the schedule.

Ask AREC for its current processing time when you submit. This guide does not state one because we could not verify a figure.

Step 7: Register for State Tax and Employer Accounts

Arkansas does not issue a general business license, so your state registrations depend on what the company does:

• Sales and use tax: Any business selling tangible personal property or taxable services needs a sales and use tax permit from the Department of Finance and Administration. The permit costs $50 and is applied for through ATAP at the Department of Finance and Administration sales tax registration page. Confirm with the department whether any of your fees or services are taxable before you assume you need the permit.
• Withholding: If you hire W-2 employees, including salaried leasing staff, register for withholding through ATAP.
• Unemployment insurance: If you have employees, register with the Division of Reemployment.
• Income tax: An LLC's tax treatment depends on how it is classified. Confirm the treatment with a CPA.

Step 8: Check Local Business Licenses

Arkansas has 75 counties and 500 municipalities, and counties issue no general business license. Cities do, and their rules differ. Little Rock and North Little Rock base their charge on a flat base plus the number of employees. Bentonville requires a registry, which it does not charge for. Conway does not impose one. Check with the city where your office sits and, if different, the city where you manage property. Confirm current amounts with each city's clerk or finance office.

Step 9: Set Up Trust Accounts and Records

Keep owner funds and tenant funds separate from your operating account. AREC's broker education covers trust accounts, and the requirements that apply to your account are set by the license law and commission rules. Ask AREC or a qualified attorney how to set up and reconcile the account before you collect your first deposit. Commingling funds is one of the fastest ways to lose a license.

Step 10: Calendar Your Recurring Obligations

• Annual LLC Franchise Tax Report: $150, due on or before May 1 each year for the year ending the previous December 31. A late filing adds a $25 penalty plus interest.
• AREC renewal: Each year, with continuing education of 6 to 7 classroom hours a year, including 1 hour on safety. Confirm the exact requirement for your license level with AREC.
• ATAP filings: Follow the filing schedule assigned to your sales tax or withholding account.

Fee Summary

Item	Amount	Agency	Notes
Certificate of Organization (Form LL-01)	$45 online or $50 paper	Secretary of State	Online, mail, or drop off
Annual LLC Franchise Tax Report	$150	Secretary of State	Due May 1; late filing adds $25 plus interest
Fictitious name (entity)	$22.50 online or $25.00 paper	Secretary of State	Trade name for an LLC
Property management broker license	Statutory ceiling of $80	AREC	Original and renewal; plus background check; check the AREC fee schedule
Property management associate license	Statutory ceiling of $60	AREC	Original and renewal; plus background check; check the AREC fee schedule
Sales and use tax permit	$50	Department of Finance and Administration (ATAP)	Only if your services are taxable
Sole proprietor assumed name	Set by county	County clerk	Confirm with the county

Common Mistakes to Avoid

• Assuming a sales license covers you. Property management has its own license track under AREC.
• Treating one managed unit as exempt. A paid third-party manager of a single unit needs a license.
• Using a P.O. Box for the registered agent. The filing will be returned for correction.
• Choosing an Inc. name for an LLC. Use an LLC designation.
• Building experience records late. Reconstructing unit counts and dates from memory delays applications.
• Paying commission leasing agents without checking the exemption. The exemption as written covers salaried or hourly staff.
• Mixing owner and tenant money with operating funds. Keep trust funds separate from day one.
• Missing May 1. Put the franchise tax report on your calendar as soon as the LLC is formed.

What Results to Expect

Your timeline depends mostly on your experience and education, not on the state filings. The LLC filing is typically the quickest step. The Secretary of State says most filings are completed within two business days of receipt. The license is usually the slowest part of the process because it can only be applied for once you have met the education and experience requirements. If you are starting with no property management history, plan for the two year experience path to take most of your early time, and consider working as an associate under a licensed broker while you build your record.

A company that follows these steps can generally open for management work once its owner holds the correct license and the entity is in good standing. Keep in mind that the franchise tax report and license renewals continue each year, so an unpaid filing can create problems even for a company that is operating well.

Next Steps

Start with the two items that hold up everything else: confirm your experience records and enroll in an AREC approved education course. Then form the LLC, choose a registered agent, and call AREC to confirm the current fee and processing time. If you have questions about your specific structure, employees, or trust accounts, an Arkansas attorney or CPA can review your plan before you commit to it.

Official resources: Arkansas Secretary of State, Business and Commercial Services Division, Arkansas Department of Finance and Administration, and SBA Arkansas District Office. For free business planning help, the Arkansas Small Business and Technology Development Center can review your plan.