If you’ve decided to end your Rhode Island business, this guide will walk you through the easy steps to officially dissolve your business with the state. Whatever reason you have for dissolving, the State of Rhode Island requires you to file certain documents to officially and legally shut down your business. If you don’t complete the proper steps, you could have financial and legal issues years into the future.
Our step-by-step guide below can help you through the dissolution process. If you’re looking to form a business in Rhode Island, our fast and easy LLC Formation Service or our Corporation Formation Service can make it easy for you.
Your company’s governing document will tell you what you need to do internally to close down the company. This will either be an operating agreement (LLC), bylaws (corporation), or a partnership agreement. Depending on what the documents say, you will have to have meetings, take a vote to dissolve, and write up meeting minutes to make it all official. Hopefully, you can easily find your company’s managing documents to accomplish these steps.
The first step to dissolving is to establish the valuation of your Rhode Island business. This entails placing a value on the various assets your company owns. Company assets are anything of value, such as real estate, inventory, property, and cash reserves. The true value of an asset is its worth minus any liabilities attached to the asset. For example, if real estate has a mortgage on the property, its value is what it appraises for minus the amount owed on the mortgage. Make note of any open and ongoing contracts with customers, suppliers, and even employees.
Using our Worry-Free Compliance Service and the dashboard, you can keep your important documents in one place and easily accessible 24/7.
Next, determine what outstanding debts still need to be resolved. If you don’t resolve any outstanding loans or debts, it could come back to haunt you later. You could be held personally responsible for your company’s debts, which could negatively affect your credit score. It could also require litigation or even bankruptcy.
In Rhode Island, you have to file Articles of Dissolution to dissolve an LLC or a corporation. You can file these documents with the Rhode Island Secretary of State’s Department of State Business Services Division. You can file your dissolution documents online or by mail, along with a filing fee.
If you don’t file dissolution documents, the state may eventually dissolve your business administratively. Businesses that fail to file an annual report, maintain a registered agent and/or registered office, pay applicable business taxes, or pay a required filing fee lose their good standing status. However, allowing this to happen can cause extra hardship and work down the road.
Before you file documents with the state, there are internal steps that need to take place. These steps are outlined in your company’s operating documents. You will need to have meetings of the owners, take votes, and draft minutes of the meetings. After accomplishing these tasks, you can then file the dissolution documents with the state.
Our Operating Agreement Template can help you create a governing document for your LLC with the necessary wording, framework, and proper dissolution instructions.
You need to cancel or terminate any permits, licenses, or registrations you obtained for your company while it was in business. These aren’t automatically terminated when you dissolve your company with the state. If you don’t cancel them, some may renew without your knowledge, causing you to spend extra money. Make sure to do research on which licenses, permits, and registrations you need to specifically cancel and which can merely lapse.
The next step is to wrap up your company’s legal and financial obligations. If you don’t do this in a timely manner, it could cause you extra work and trouble in the future. You might cause the need for future lawsuits if your business doesn’t honor open contracts or neglects to pay its debts.
You will also want to be sure to comply with employment and labor laws. State law requires employers to issue final paychecks to employees within 24 hours of their last day of work. Wages also include holiday pay, vacation pay, and insurance benefits, if the employee has worked for your company for more than a year.
You also want to make sure to file any final tax returns with the state or IRS and cancel your employee identification number (EIN).
The last step is to file Articles of Dissolution with the Rhode Island Secretary of State. Keep and maintain all the official documents associated with your business, including the dissolution documents, for at least seven years.
Let us help you with your Rhode Island business’s needs. We can support you as you prepare for your company’s voluntary dissolution, as well as help you open and run your business. Let us save you time, so you can focus on other things.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
First, you need to wrap up all your business’s outstanding debts, obligations, and open contracts. Second, pay all your employees their final pay and file your final tax returns. Then, you need to file the appropriate dissolution document with the Rhode Island Secretary of State.
To file dissolution documents, you need to file a specific form and a small filing fee. You can file online with payment via a credit or debit card or by mail with a check or money order.
The Rhode Island Secretary of State’s office usually takes 5 to 10 business days to process your Articles of Dissolution.
Dissolving a nonprofit corporation in Rhode Island requires the filing of Form 111 Articles of Dissolution. Rhode Island requires that your nonprofit be in good standing with the Division of Taxation. You will need to file a request for a letter of good standing with the DOT.
Rhode Island Business Resources
Business Dissolution by State