What makes an LLC such an attractive business structure is its limited liability component that keeps the company owners free from financial liabilities of the business entity, thus protecting their personal assets. As a result, feeling safer and more protected, more and more entrepreneurs are eager to dip their toes into the business than ever before. If you are one of those and are reflecting on creating an LLC in Rhode Island, we are here to help. Though the company formation process is more or less similar throughout the country, LLC law is state-specific, and there are some minor yet important peculiarities pertinent to each state. We consider all those in our DIY guide below to help you launch your Rhode Island limited liability company on the right foot.
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Technically, to legalize your business, you just need to complete some simple steps in a certain sequence. It’s more about your due diligence, eagerness, and eye for detail than some sort of special knowledge. So, take a look at those basic steps.
There is no person without a name and, similarly, no company (which is a legal person in the eyes of the law) can exist without a name. Hence, before you get into any formalities, you need to name your company first. When creating a name for your future business entity, keep in mind certain rules outlined in the Rhode Island LLC Act § 7-16-9 that state as follows:
Once you’ve invented a business name, you can’t register it with the state straight away and need to do the LLC name search first to make sure it is unique. For this purpose, it’s desirable to have a few versions at hand. To know if the chosen LLC business name is available in Rhode Island, you can visit the Secretary of State’s entity search page. The name search is a free service and will cost you nothing but time if you need to make some distinguishable changes.
If you are lucky to pick a unique name, don’t put it off and start the filing process as soon as possible. In case you are not ready yet and need some more time for document preparation but want to make sure your chosen business name won’t be occupied by some other legal entity, you can get it via the name reservation service that will put the name on hold for 120 days. The service is payable and costs $50. But it’s worth the money if you have some really good LLC name and don’t want to clutch it. You can reserve that name either online using the Business Services Online Filing System or by sending or handling the printed application form to
Office of the Secretary of State
Corporations Division
148 W. River Street Providence
Rhode Island 02904-2615
To open an LLC in Rhode Island, you’ll also need a resident agent. It’s a regulatory requirement you can’t skip, and it’s meant to ensure smooth and consistent communications between your legal entity and the state. While you might not be constantly available for receiving any notices and important documents from state and government authorities, a resident agent will do it for you. This way, the LLC resident agent will keep you informed of any crucial issues and processes affecting your company’s good standing with the state. Despite its key role in the business structure, there are no strict rules for choosing a resident agent in Rhode Island.
Choosing an individual to be a resident agent for your LLC, your options are not limited only by some trained specialists like attorneys, lawyers, financial consultants, or accountants. Actually, any adult Rhode Island resident older than 18 years and having a physical address in the state can be your resident agent. You can even be the resident agent for yourself if you live in the state and can personally receive all communications.
Yet another option, and we think it’s the most convenient one, is to hire a resident agent service such as IncFile or Northwest Registered Agent. Such companies not only will take care of the state correspondence for you but can also handle the whole formation process and save you the hassle of doing that on your own.
An EIN or Employer Identification Number is not a must for opening an LLC in Rhode Island. It means you don’t have to mention it in your filings docs. However, at some point in your business activity, you’ll need it and it will happen pretty soon. Opening a business bank account? Hiring employees? Filing state and federal taxes? These are only a few situations where you need EIN. This digital number makes your company visible on the state and tax radar. So, it’s better to get ready in advance and obtain this number at the formation stage.
The good news is that EIN acquisition imposes no cost. The number is issued by the Internal Revenue Service (IRS) for free, and all you need to do is just send an application.
File for the EIN online via an official service page from 7 am to 10 pm on weekdays. This is the fastest method of registering an EIN for a Rhode Island LLC since you’ll get the number immediately after placing an application.
To send the application by fax, first, download and fill in the Form SS-4 and then fax it to
(855) 641-6935
Fax applications are processed within four business days.
If you rely on the tried and tested mailing service only, you can mail the application form to
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Yet, in this case, get ready to wait for a whole month before you get an EIN for your LLC.
Right off the bat, an Operating Agreement doesn’t make a part of the filing bundle to commence an LLC in Rhode Island. However, this document is a helpful bylaw that brings a lot of benefits to ongoing company operation by:
This document not only eases business management and control but also makes your company look more reliable and trustworthy in the eyes of potential partners or investors.
Besides, to make up a Rhode Island Operating Agreement, you don’t have to hire a pricey lawyer since there are no legal forms to stick to. It’s up to you and your business partners to decide on the document content, and you can safely use one of the multiple templates available online. Our best recommendation here will be to check one of the online LLC service websites such as ZenBusiness where you can find forms drafted and reviewed by professional legal advisors.
This is a formation stage itself. You need to draft and file the Articles of Organization (which is your main formation document) to the Secretary of State. Unlike an Operating Agreement, the Articles of Organization is a legal form that should contain basic info about your company including:
To finalize your Rhode Island LLC formation process, you need to submit the Articles of Organization to the state office using one of the following methods:
File your formation documents from wherever you are by using the Business Services Online Filing System.
Complete and print out the application form and send it to
Division of Business Services
148 W. River Street
Providence, Rhode Island 02904-2615
Whichever filing method you choose, you’ll have to pay a flat rate of $150 to get your documents processed and registered by the state. And the processing time in Rhode Island is about 5 to 7 business days, which is pretty fast as compared to other states.
Once you register your company with the state, you can legally start running your business in Rhode Island. However, to stay compliant with the state, you need to consider some other aspects as well.
Opening a bank account is a vital after-formation step that will help you split your personal and corporate assets when doing a business in Rhode Island. It’s better to do it from the start both for accounting purposes and for fortifying the so-called corporate veil provided by this type of business structure and keeping you protected from financial company liabilities. To open a business account in a local bank, you’ll need your LLC formation paperwork, a banking resolution, and Rhode Island Certificate of Good Standing.
Some types of activities, depending on the business you are engaged in, need a license or special permit to run an LLC in Rhode Island. To learn if you need an LLC license, you can check the list of Rhode Island licenses. If it turns out you do need some Rhode Island Business Permits and Licenses, you can apply for them via the Department of Business Registration page.
Subject to the chosen business structure, legal entities pay taxes on federal, state, and local levels. So, it’s advisable to get a tax consultation from an expert and check what taxes you need to register for after the formation process is complete.
LLCs are taxed as pass-through entities, which means they have no tax obligation on the federal level and corporate profits and losses pass on to personal tax returns of the company owners, unless you select your LLC to be taxed as a corporation.
The pass-through scheme is applicable to state taxes as well. However, Rhode Island LLC Tax Filing Requirements impose a business corporation tax payable at a flat rate of $450.
These payments are directly related to the type of your business activity. If you are engaged in the trade or commerce, your LLC will be liable for sales and use taxes. Companies with hired workers need to pay a Withholding Tax and Unemployment Insurance Tax. If any of those are valid for your business entity, you need to pass the registration by filing appropriate paper forms via Combined Online Registration Service.
To maintain your company in good standing with the state, many US states require LLC reporting on ongoing activities and incomes. Rhode Island is not an exception. You’ll need to file your Rhode Island Annual Report between September, the 1st and November, the 1st each year. The filing fee is $50 and in case you miss the filing deadlines, you’ll have to pay a penalty of $25. You can file your annual reports online and send a paper form to
Division of Business Services
148 W. River Street
Providence, RI 02904
If you get to the end of our LLC formation guide, you might feel intimidated by the whole process waiting for you ahead. Yet, we’ve tried to be as detailed as we can to give you every bit of advice you need. Though looking complicated, a DIY route is quite feasible. Yet, if you do want to get some help on the way, LLC formation companies have a lot to offer in this concern. They can launch an LLC in Rhode Island for you covering all the formation formalities, some compliance requirements, and even LLC tax filings. The best thing is that online LLC services are fairly affordable and won’t cost you a fortune.
