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If you’re an Ocean State entrepreneur wondering how you should form your newest venture, why not consider a Rhode Island LLC? Business is booming in Rhode Island, especially in high-tech industries like healthcare, biotech, and defense contracting. New business incentives launched by the state government make now a particularly attractive time to form a business in Rhode Island. And doing business through an LLC in Rhode Island can offer you and your company a variety of advantages that we discuss below.
Forming a RI LLC can be as straightforward as a drive down Millionaire’s Row. However, if you want to ensure that you and your business get the full tax and liability protection of the LLC laws, you’ll need to form your business correctly. Attempting to decipher those rules on your own can be like trying to get home from Block Island after you’ve missed the last ferry. Read on to find out how we can help you navigate dark water and register a business in Rhode Island quickly and correctly.
We also offer a comprehensive suite of business services that can be real lifesavers for your new business so you never feel like you’ve been left to sink or swim. We’ll tell you how to get started.
A lot of the work of forming an LLC in RI occurs before you even upload a single document. But once you file your paperwork with the Rhode Island Secretary of State, your new company becomes part of the public record. And after your filing is complete, you’ll still have work to do. You will likely want to draft an operating agreement and register your company with the IRS so you can get a bank account and pay bills. Read on, since there’s a lot to be done!
These guidelines are for starting a domestic LLC, which is one started within Rhode Island. If you started an LLC in Massachusetts, Connecticut, or New Hampshire, for example, and want to start doing business in Rhode Island, you would follow the process for foreign LLCs. That process has different rules and requires different paperwork.
Once you’ve decided on an LLC, Rhode Island has some basic filing rules you’ll need to follow to get your business up and running. But before you do anything, you’ll want to gather up the required information, so you’re not scrambling as you start a Rhode Island LLC. Because most businesses formed as LLCs will need to register with the Rhode Island Secretary of State, you’ll first want to familiarize yourself with the business formation steps required by the Rhode Island Department of State. We’ll discuss each one below.
The first step to register a business in Rhode Island is to decide what to call it. As you begin forming an LLC in RI, think seriously about your business name. This name announces your new business to the world. Selecting a name is also the first step required to register a business in RI.
Before you get your heart set on a name, check which names are already taken. In Rhode Island, when you start a Rhode Island LLC, your business has to have a name that is unique from all others. Our RI business search page can help guide you in your search. The Secretary of State has also set some basic parameters for what you can and can’t name your business. Those rules include:
You may want to review Rhode Island’s naming guidelines before falling in love with potential names. Being well-informed and well-prepared is the best way to start an LLC in Rhode Island.
Maybe you’re still working on some business logistics and aren’t ready to file your Articles of Organization yet, but want to know how to get a Rhode Island LLC name reserved. In that case, you can file an Application for Reservation of Entity Name. Filing this form online reserves your chosen LLC Rhode Island name for 120 days for a fee. We can take this burden off your plate with our business name reservation service, which can handle it for you. As part of this service, we also check to see if your desired name is available.
Virtually every business today needs to have an internet presence. Don’t let your LLC in RI get left behind without a web presence. When you’re coming up with a business name, be sure to check that a matching domain name is available. Our domain registration service can help you secure the online name that will best serve your company.
Some business operate under a name other than their official name, or they may even operate under more than one name. If you plan to offer multiple types of services or operate in multiple locations throughout RI, you might want to consider getting a fictitious name. While a fictitious name or a “doing business as” name is not mandatory for your LLC, Rhode Island makes it straightforward for business owners to obtain one if they need one. If you decide you’d like to have a DBA, you can quickly and easily use our RI DBA service to file.
Your LLC in Rhode Island’s intellectual property is one of your business’s most valuable assets — and you may not even realize it! Be sure to visit the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked. Trademark infringement can be a long and costly headache, and it can take away from your time to run the business and your brand. You can also check the Rhode Island Department of State Business Services Division website for trademarks that have been registered with the state to confirm whether your business’s name and marks have been registered only in Rhode Island
The second step to forming an LLC in RI is choosing a resident agent. You may have heard this called a “registered agent” in other states. This is an entity or individual who is authorized to receive legal notices on behalf of your business.
Rhode Island requires that all LLCs nominate a resident agent. You’ll need to identify them on the RI LLC form you file with the Secretary of State. Your registered agent needs to be a Rhode Island resident, and they must be qualified to conduct business within the state. They’ll need to be physically located in Rhode Island — a P.O. box won’t cut it. They will also need to certify that they’re able and willing to serve as your resident agent.
If you decide to serve as your own resident agent or have appointed a friend or family member instead of hiring a professional, you could encounter serious problems if the state can’t find your registered agent when it needs to reach you. Unfortunately, this happens more often than you think!
This can also happen if the agent goes on vacation, becomes ill, moves, or quits and you forget to update your paperwork with the state. That simple oversight can have serious consequences for your RI LLC. If you don’t have a resident agent, the state can dissolve your LLC and you’ll lose your limited liability protection. You could also miss critical information, like notification of a lawsuit.
While there’s no law against being your own resident agent, this can be a very inconvenient option. You don’t want to be served even routine legal paperwork in front of clients. Additionally, a resident agent needs to always be available during normal business hours, and running your own business may prevent you from doing that.
We can help keep your Rhode Island business registration compliant by connecting you with a resident agent. Our Registered Agent Service means that there will always be someone available to receive important legal, tax, and other notices from the state. Hiring an outside resident agent ensures you never find out too late about legal developments surrounding your company or correspondence from the Rhode Island Department of State Business Services Division.
The third step in the process to register a business in RI as an LLC is to file your Articles of Organization with the Secretary of State. We understand that when you go to register a business in RI, it can be intimidating, especially if it’s your first business venture. That’s why we offer business formation plans to help you get the paperwork done correctly. That said, we want to make sure you know how our service works and how each step of the process takes place.
Have the following information handy before you complete your Articles of Organization:
If you have that information handy, it can facilitate the process of getting your documents completed and filed. You can also purchase our Expedited Filing Service for a small fee. While this doesn’t impact how quickly the State of Rhode Island will process your documents, it helps us prioritize your Rhode Island LLC.
Many states ask whether your LLC will be run by the members/owners (member-managed) or by a manager (manager-managed). Most LLCs choose to be managed by the members because they have only a few owners. In those cases, it usually makes sense to opt for member management.
But some LLCs prefer to appoint or hire a professional manager instead. This type of management is helpful when some LLC members prefer to be passive investors only. Rhode Island permits both types of management.
Regardless of which management structure you choose, you need to file your Articles of Organization only once. If you end up making any changes down the road, you’ll need to file Rhode Island Articles of Amendment with the Rhode Island Department of State, along with a fee. If you do need to file an amendment, we have an amendment filing service that can handle it for you as well as our Worry-Free Compliance service, which includes two amendment filings every year.
If you have us file your Articles of Organization, once the state approves your LLC, your paperwork will be available from your ZenBusiness dashboard. There you can keep it and other important paperwork digitally organized.
If you’re starting your new company toward the end of the year, you may want to consider setting your LLC filing date on or after January 1 of the coming year. This can spare your business the hassle of filing taxes for only a short period of the current year, particularly if you don’t anticipate sales or other business activity.
Ordinarily, an LLC, if approved, becomes effective on the date of submission. This is true even if the Rhode Island Secretary of State doesn’t stamp it “approved” until two weeks later. However, you have the option to tell the state that you want your effective date to be at a later time. You can choose to have your LLC’s effective date be up to 90 days past the date you submit the filing.
The next step is to create a Rhode Island operating agreement. An operating agreement spells out how your LLC will be organized and operated. While this agreement isn’t required by law, nor do you need to file it with the state, an operating agreement is a terrific governance tool for your small business. The great thing about an operating agreement is that it allows you to set the rules and regulations for your LLC (within reason and in alignment with state laws).
The benefits of having an operating agreement in place include:
This isn’t an exhaustive list of all the benefits of having an operating agreement in place. As you prepare your LLC materials, you’ll undoubtedly find other items you want to include in your company’s governance materials. You’ll also find that there are issues you’ll need to clear up and codify. An operating agreement is a terrific place to do that.
You might think you don’t need an operating agreement for a single-member LLC. But potential investors, future business partners, and others may want to see your agreement. Some banks require a copy before they’ll let you open a bank account, and some insurance companies require one on file before they’ll issue a policy. Your operating agreement can also spell out what you want to happen to the business if you die or become incapacitated.
Here are some basic items you may want to include in your LLC’s operating agreement:
We offer a customizable template to help get you started with drafting your Operating Agreement.
Apply for an Employer Identification Number (EIN). Once your RI LLC is formed, you can apply for your EIN, also known as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number, from the Internal Revenue Service (IRS).
An IRS Employer Identification Number is like a Social Security number for your business, allowing your business to hire employees, apply for a business bank account, and pay taxes. Most LLCs are required to have an EIN, especially those with multiple members or employees.
You can get your LLC’s EIN through the IRS website, by mail, or by fax. But if you’re like everyone else and have no desire to deal with the IRS, we can get it for you. Our EIN Service eliminates the hassle of chasing down your tax ID numbers.
The LLC business structure is meant to be flexible, including in how it’s taxed. By default, an LLC is taxed as a sole proprietorship if it has only one member or a partnership if it has multiple members. This appeals to most owners of LLCs because it avoids “double taxation,” where a business’s profits are taxed at both the corporate level and the individual shareholder level.
Because LLCs enjoy maximum flexibility, they can choose how they want to be taxed. Some LLCs opt to be taxed as a C corporation or an S corporation. Being taxed as a C corporation comes with double taxation; however, C corporations have the widest range of tax deductions. For some businesses, this can be very attractive.
S corp is short for “Subchapter S Corporation.” It’s not a separate type of business entity; rather it’s a tax election, and is geared toward small businesses. Having your LLC taxed as an S corp has pass-through taxation like a standard LLC but allows you to designate yourself as an “employee-owner.” You can therefore split your income into your salary and your share of the company’s profits. You’ll pay self-employment taxes on your salary but not your profits.
The IRS scrutinizes S corps closely, and you’ll need to meet specific requirements to qualify. Be sure to speak to your qualified tax professional about which of these tax elections could be right for your business.
You’ll also need to register your business with the RI Division of Taxation. You can do so online.
Once you register your business in the system, you should be able to see which classifications and forms may apply to you. If you hire employees, you’ll need to register for payroll taxes, pay unemployment tax, and provide workers’ compensation insurance for your employees. For any Rhode Island State employment tax obligations, you will be able to register your business and pay through the RI Division of Taxation.
Once you’ve secured an EIN, you’ll be able to open a business bank account. Having separate accounts for your business and your personal banking is critical for sorting out your finances at tax time. It also helps preserve your LLC’s limited liability status by preventing you from mixing your business and personal funds.
We offer a discounted bank account for your new business. This allows for unlimited transactions, online banking, a debit card, and more. When you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process.
For further help managing your new business’s finances, try ZenBusiness Money. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
We can help
Our Rhode Island LLC formation service is best in class in getting entrepreneurs up and running quickly. Our other services provide long-term business support to not only help you get started but to help your business grow and thrive. Let us take care of formation, compliance, and more, so you can focus on running your business.
Disclaimer: The content on this page is for informational 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.
Rhode Island LLC FAQs
Depending on factors like your profession, industry, and location, you may require other federal, state, and local business licenses and permits to operate. There’s no central place to check to see every license or permit you might need, so you’ll have to do some research. Our Business License Report Service can do the work for you, saving you precious time and letting you focus on your company.
The fee for starting an LLC in Rhode Island is $150. Fees can change over time, so confirm with the Rhode Island Secretary of State. While our fees can add a bit to the formation costs depending on which services you select, we can save you time and be a huge help as you form your business. We provide practical support and expertise, holding your hand as you register your business.
LLCs are a popular business structure because they combine the liability protection of a corporation with the tax savings of a sole proprietorship, as well as provide some unique flexibility in tax elections and operations. Some key Rhode Island LLC benefits include:
While you have many different structures to choose from when starting your business, an LLC can provide you with the personal and professional flexibility you need to get started on the right foot.
LLCs provide the benefit of avoiding “double taxation.” The business pays no federal income tax, instead passing the income straight through to the LLC’s owners. Then, each business owner pays taxes on the earnings as regular income. This is unlike most corporations, in which profits are taxed twice — first at the business level and again at the individual shareholder level.
The IRS administers federal taxes based on each member’s share in the LLC. Members also might be required to pay self-employment tax to the IRS to make up for the fact that they don’t pay an employer withholding taxes like those related to Medicare or Social Security from their paychecks.
The LLC tax structure can save business owners a significant amount of money compared to a traditional C corporation. However, LLCs can still elect to be taxed as a C corporation if their particular business would benefit more from that tax status. Talk to your tax professional if you think this might be right for your business.
Some LLCs elect to be taxed as an S corporation. An S corp has more restrictions and greater scrutiny from the IRS, but it has the potenital save members of some LLCs a lot in self-employment taxes. It also avoids the double taxation you would have from being taxed as a C corporation. Our S corp service can help you set up an LLC with S corporation status. But before you decide how to have your LLC taxed, we highly recommend consulting a tax professional.
The State of Rhode Island also taxes businesses. Your LLC business taxes may include:
In addition to the above taxes, you might need to pay taxes based on your city. Check your municipal website for more information. To better understand your state tax burden, visit the RI Division of Taxation website for more information.
When filing online, it takes about 2-3 business days to confirm your filing and form your LLC. If you choose to file by mail, it can take more than two weeks.
No, you don’t need to file your LLC’s operating agreement with the state or any government agency.
Most entrepreneurs elect pass-through taxation at the state and federal levels — owners pay state and federal taxes on the income they earn from the business, but the LLC doesn’t pay income taxes as a business entity. A qualified accountant can explain the benefits and drawbacks of S corp and C corp elections and how they can impact your tax burden.
Rhode Island state law doesn’t permit the series LLC business structure. A series LLC is one in which several separate LLCs operate under one umbrella LLC entity, but each LLC is insulated from the liabilities of the other LLCs.
If you decide to dissolve your business, you’ll need to file the Articles of Dissolution with the Rhode Island Secretary of State. Before doing so, you’ll need to pay off any business debts, sell off assets, and distribute any remaining profits among the members. Your operating agreement can provide a clear roadmap and instructions in the case of dissolution. To learn more, see our page on Rhode Island business dissolution.
The process for transferring ownership of your Rhode Island LLC is typically in your operating agreement. Typically, you’ll need a purchase agreement where the previous owner sells their LLC interests to the buyer. Next, the Articles of Organization are amended to reflect the change in ownership. You’ll want to file these amended Articles of Organization with the state.
A “doing business as” name isn’t mandatory in Rhode Island. However, if you have several business locations or would like to use a DBA, filing a Fictitious Business Name Statement is a straightforward process. You can also use our RI DBA service to file.
Your operating agreement will typically detail your LLC’s procedures for removing members from the business, including any voting or cause-related requirements. Additionally, you’ll need to follow your agreement’s procedures outlining how the removed member’s share will be distributed.
Finally, you’ll need to file Rhode Island Articles of Amendment to update your LLC’s Articles of Organization with the state.
Yes, Rhode Island requires LLCs to file an annual report. You’ll need to file through the Secretary of State’s online system and pay a filing fee. These reports are due between February 1st and May 1st of each year, depending on the specifics of your business. There’s a penalty for late filings.
We can take care of this for you with our annual report service.
You don’t need a business plan to form your LLC, but having a business plan can put you ahead of the game. A good plan also contains information on the business’s founders, market research, and potential financing sources. Having a business plan can make your business more attractive to potential investors as you navigate the start-up period.
Rhode Island Business Resources
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