Rhode Island may be the smallest state in the country, but it offers big opportunities for new business owners. For instance, Rhode Island provides small business capital investment tax incentives and viable small business loan programs. In 2023 alone, Rhode Island had 105,320 registered small businesses, making up 98.9 percent of the state's businesses.
Forming a limited liability company (LLC) in Rhode Island offers many advantages, such as providing your small business with limited liability protection and tax flexibility. Follow along to learn how to form your own professional LLC in Rhode Island.
How to form a Rhode Island LLC in 6 steps
It's not difficult to form an LLC in the Ocean State, but there are important steps to follow to ensure your business complies with local, state, and federal laws. Here’s how to establish your Rhode Island business in a few steps:
1. Choose your business name
The first step involves selecting a name for your Rhode Island LLC. However, you can't choose just any name; the name must comply with state rules and regulations. The following are some examples of Rhode Island naming guidelines:
- The name must be distinguishable from other business names on the record.
- The business name must end with "Limited Liability Company," "LLC," or "L.L.C."
- The name cannot be misleading or deceptive, suggesting that it's associated with a government agency.
- The LLC name cannot include restricted words without approval, such as "bank" or "insurance."
To ensure your LLC name is unique, conduct a Rhode Island LLC lookup on the Rhode Island Secretary of State's Corporate Database. If the name already exists, you won't be able to register it with the state.
Now, if you've selected a compliant business name but you're not quite ready to form your LLC yet, you can reserve your business name with the RI Department of State. Simply fill out the Application for Reservation of Entity Name and pay the $50 filing fee to reserve your business name for 120 days.
2. Appoint a registered agent
All limited liability companies in Rhode Island must have registered agents. This means they've appointed themselves, a qualified person, or a registered agent service to oversee official correspondence between their LLC and the government.
When selecting a registered agent for your LLC, they must meet the following requirements:
- The registered agent must have a physical address in Rhode Island.
- Their address cannot be a P.O. Box.
- They must be available during normal business hours.
LegalZoom offers a registered agent service to manage legal documents on your LLC's behalf, starting at $249/year.
3. File articles of organization
Your LLC must file articles of organization with the Rhode Island Department of State to establish your business entity. The filing fee is $150, and you can submit the form online, by mail, or in person.
The Rhode Island articles of organization form will ask you to provide some basic information about your LLC:
- Business name
- Business street address
- Registered agent name
- Registered agent address
- Federal tax designation
- Management structure
- Names and addresses of manager(s), if manager-managed
- LLC formation date
Once the state approves your articles of organization, you've officially formed a legal business entity and are free to conduct business in Rhode Island.
4. Create an operating agreement
Rhode Island doesn't require operating agreements, but creating one for your LLC is a good business practice, especially if you're overseeing a multi-member LLC.
An LLC operating agreement helps establish how your business will handle certain procedures. You can create one yourself or use a comprehensive operating agreement template to get started with the basics, but we recommend consulting an attorney for guidance.
When drafting your operating agreement, you should provide rules and guidelines regarding the following:
- Ownership
- Management
- Decision-making and voting
- Allocations for profits and losses
- Ownership transitions
- Dissolution of your LLC
If you need help drafting your operating agreement, LegalZoom services can get the job done. Simply answer a few questions, and we’ll take care of the rest.
After you've finalized your LLC operating agreement, sign it and distribute copies to the other LLC members. You should periodically refer to the document and update it as needed.
5. Obtain an EIN and open a business bank account
The next step in forming your LLC in Rhode Island involves obtaining an Employer Identification Number (EIN), also called a Federal Tax Identification Number or Federal Employer Identification Number, from the Internal Revenue Service (IRS) for tax purposes.
While an EIN is optional for single-member LLCs, it's a requirement for multi-member LLCs as it helps separate an LLC owner's personal assets from their business assets. You’ll also need one to hire employees.
To apply for an EIN, you must submit Form SS-4 online at the IRS website, by fax, or by mail. There is no filing fee. Or, you can let LegalZoom file your EIN application for you. We offer convenient EIN services that help streamline the process.
Once you acquire your EIN, you can open a business bank account to manage your business income. It’s a good business practice to maintain a separate personal bank account and business bank account for personal liability protection.
6. Register for state taxes and business licenses
Now, you're ready to address your tax requirements. If your LLC plans to hire employees, you'll need to register your business with the Rhode Island Division of Taxation (DOT). You can submit a form with the RI Division of Taxation Combined Online Registration Service to register your business for a sales permit, an income tax withholding account, and a Rhode Island Unemployment insurance account. You can also use this form to apply for certain licenses. No filing fee is associated with this form unless you're registering for a cigarette dealer's license.
As for business license requirements in this state, Rhode Island does not require a general business license. However, depending on your business operations, additional city, county, or federal licenses and permits may pertain to your LLC. Furthermore, certain industries require operational licenses. The filing fees will vary based on what licenses and permits your LLC needs.
To find out more about licensing requirements, contact the Rhode Island Department of State's Business Assistant portal.
What to do after forming your Rhode Island LLC
Now that you've formed your limited liability company, there are a few more steps you can take to finalize your Rhode Island business.
Register a domain name
When your customers are searching for your LLC online, you want them to easily find your business website. That's why it's important to register a domain name that matches the name of your LLC to help establish your online presence.
After you've registered your domain name, create social media accounts for your business on platforms like Facebook, LinkedIn, and Instagram.
Obtain a Certificate of Good Standing
You may want to consider filing for a Certificate of Good Standing, which, as its name suggests, proves your business entity is in good standing with the RI Department of State.
To request a Certificate of Good Standing, navigate to the Corporate Database, fill out the form, and pay the $22 filing fee.
Consider a foreign LLC
If you only plan to operate your LLC in Rhode Island, then your domestic LLC registration is fine. However, if you plan to expand your business outside of Rhode Island, then you must file for a foreign LLC with that state.
Alternatively, if you established your LLC in another state, your LLC is considered a foreign LLC, so to conduct business in Rhode Island, you must register with the RI Department of State and pay the $150 filing fee. To learn more, navigate to the Foreign Businesses section of the state's website.
Annual filing requirements for Rhode Island LLCs
All limited liability companies must file annual business reports with the Rhode Island Secretary of State that provides the state with basic information about their businesses. You can file Form 632 online, by mail, or in person, and pay the $50 filing fee. Or, you can hire LegalZoom to do it for you. Our specialists will write your report, file it, and then deliver it to your business once the state processes it. The filing period is between February 1 and May 1, and late fees do apply.
The cost of forming an LLC in Rhode Island
The cost of forming an LLC in this state will vary depending on your unique business activities. However, there are some basic fees that apply to all limited liability companies in Rhode Island.
The following are some examples of the fees you can expect to pay when forming your business:
- Articles of organization: $150
- Annual report: $50
- Name reservation: $50
- Certificate of Good Standing: $22
- Registered agent service: Anywhere from $100–$300 per year
- Business licenses and permits: The cost varies based on your specific operations and the kinds of licenses and permits your business requires
You can expect to pay at least $150 to form an LLC in Rhode Island. Additional services, permits, licenses, and documentation may increase your costs, but may be worth it to prevent errors or noncompliance.
How to start your Rhode Island LLC with LegalZoom
There are a lot of steps to remember when forming an LLC in Rhode Island, so allow LegalZoom to help. We offer LLC formation services that take care of everything for you, from conducting a Rhode Island LLC lookup for your business name to ensuring you've submitted all the appropriate documents. Simply select your desired business entity, provide us with some details about your business, and allow us to take care of the rest.
Start an LLC in Any State
FAQs
How long does it take to form an LLC in Rhode Island?
The length of time it takes to form an LLC in Rhode Island depends on the method by which you submit your articles of organization. If you file a submission online, it may take one to three days to process, but if you file by mail, it will take a few days plus the time it takes to go through the mail. As for in-person submissions, these are processed the same day.
How do I correct filing errors in RI?
Business owners must file a Certificate of Correction with the Rhode Island Department of State to make revisions to their articles of organization. There is a $50 filing fee to correct filing errors.
How do I dissolve a Rhode Island LLC?
When you're ready to dissolve your RI LLC, you must submit articles of dissolution to the Rhode Island Secretary of State and pay the $50 filing fee. Another option is to let LegalZoom file the paperwork for you. We provide dissolution services that make dismantling your LLC a breeze.
Once approved, your LLC will be considered dissolved, and your business name will become available in the database. At this point, you must stop your regular business operations.
How are LLCs taxed in Rhode Island?
In Rhode Island, LLCs are considered pass-through entities. This means the LLC members must pay taxes on their share of the LLC's income, including the minimum franchise tax, known as the Rhode Island Business Corporation Tax.
How much does it cost to form an LLC in Rhode Island?
The cost of forming a limited liability company in Rhode Island depends on a few factors. That said, the simple cost of filing articles of organization, which establishes your business in the state, costs $150.
Other fees to consider include those associated with reserving your business name, registering for business licenses and permits, hiring registered agent services, and submitting your annual report.
Rudri Bhatt Patel contributed to this article.
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