Start your business
Have you stayed up late pondering how to make your cool idea for a new business in Rhode Island into a workable reality? The legal paperwork alone has probably given you pause.
No one can fault a person for feeling overwhelmed when trying to start a small business. It can be hard to know where to start or who to ask for reliable advice. This is where ZenBusiness can truly help you navigate the fog. We are here to help you throughout every step of forming a limited liability company (LLC) in Rhode Island, and we do it affordably.
This comprehensive guide will lay out the big picture while helping you understand the details of starting an LLC in Rhode Island. We offer straightforward and state-specific approaches to LLC formation that will see your business dreams come to fruition with minimal headaches.
1Name Your Rhode Island LLC
Appoint a Registered Agent in Rhode Island
File Rhode Island Articles of Organization
Create an Operating Agreement
Apply for an EIN
As you prepare to register a Rhode Island LLC, give some serious thought to your business name. Your company will require a name that stands out and announces your services or goods in some way. Your LLC name should simultaneously promote curiosity and understanding.
The first step in picking a name involves determining which business names are already taken. Come up with a list of potential favorites and then use the Rhode Island business name search to make sure they aren’t taken.
A few basic rules apply to the naming process. You cannot form an LLC in Rhode Island that does not include the phrase “Limited Liability Company” or one of its abbreviations (“LLC” or “L.L.C.”) in the actual name. You also cannot use any terminology that may contribute to your LLC being confused with a government agency, such as “FBI” or “Treasury.” Review Rhode Island’s naming guidelines before planning potential names.
If you are not quite ready to file your Rhode Island Articles of Organization but want to make sure that your chosen business name does not get taken by someone else, you can file an Application for Reservation of Entity Name. This form reserves your chosen LLC name for 120 days for the cost of $50. You can fill the application online.
Perhaps you are planning to install your LLC with multiple services or want to receive payments and mail under a name other than the LLC’s official name. You will need to file a Fictitious Business Name Statement ($50) that lets the Secretary of State know what name you will be utilizing for those matters. This step, also called “Doing Business As” (DBA), is not mandatory but can be beneficial to certain companies.
Another aspect of naming your LLC is the availability of website domains. A website has become a requirement for many businesses, and the last thing a new business owner wants is to settle on a great name only to find that related web domains have been taken.
One last item to contemplate in the naming portion of your Rhode Island LLC is whether you want to trademark. It’s often easier and quicker to register a trademark at the state level. If you choose to trademark any part of your LLC, you will need to file the Application for the Registration of a Service Mark with Rhode Island, which costs $50 to file. If you’d like broader protections — for example, if you plan on doing business outside of Rhode Island — you could register your trademark with the United States Patent and Trademark Office. While you’re there, you can search their trademark database to make sure the name you want isn’t already federally trademarked.
The second step to forming an LLC in Rhode Island is designating an appropriate resident agent (referred to as a “registered agent” in most states). A resident agent is an entity or individual who is authorized to receive legal documentation on behalf of your business. Rhode Island mandates that all LLCs must nominate a resident agent, and this person or business entity must be a Rhode Island resident and/or qualified to conduct business within the state.
All resident agents in Rhode Island must have a valid street address within the state and certify that they are available during normal business hours to accept service of process. No P.O. boxes are acceptable. Check out Rhode Island’s guidelines on maintaining a registered agent to be sure that you make the most responsible choice for your business.
While there is no law against being your own resident agent, this option tends to be discouraged for several reasons. You don’t want to be served legal paperwork in front of employees or clients, and you may not always be available during regular business hours.
Hiring an outside resident agent ensures you never find out too late about legal developments surrounding your company. It also allows you to focus on your company’s growth rather than having to utilize your time in managing legal correspondence.
To officially form an LLC in Rhode Island, you must submit completed and accurate Articles of Organization to the Secretary of State. You can file online through the Rhode Island Secretary of State business portal or submit the paper application by mail:
Division of Business Services
148 W. River Street
Providence, Rhode Island 02904-2615
The fee is $150 for new entity formation. You will need the following information handy to complete the application:
The application will ask you to specify whether you wish your new Rhode Island LLC to be treated as a partnership, corporation, or “disregarded as an entity separate from its member(s)” for federal tax purposes. The “disregarded entity” category refers to being taxed as a sole proprietorship, meaning you’re the only owner of the LLC. If your corporation is going to be a nonprofit, a separate form is necessary, and the fee is only $35.
While launching an LLC in Rhode Island does not mandate an Operating Agreement, this step is arguably one of the most important. Operating Agreements are the written, agreed-upon rules and goals of your company.
An Operating Agreement outlines acceptable practices for admitting new LLC members, letting members go, and even the rules of engagement should your LLC need to dissolve.
Unless you are forming a Rhode Island LLC that will only have one member and no employees, you will probably need to obtain an Internal Revenue Service (IRS) Employer Identification Number (EIN). This number operates much like a Social Security number for your company and represents how federal and state governments can discern your business taxes from those of your personal finances.
Filling out the EIN application on the IRS website can be done quickly and is free. Rhode Island participates in a dual sales permit and business registration system wherein you can set up your company to pay the correct state taxes using the same form it takes to make retail sales.
You can visit the Rhode Island Division of Taxation page to learn more about which taxes might apply to your new business.
The total cost to form a Rhode Island LLC will vary depending on the type of business that you are launching. Some companies require additional professional and state licensing to operate legally. Every new business except nonprofits will pay the $150 filing fee, whether they file online or by mail. Nonprofits will pay $35.
Note that beginning one year from your initial filing date, a $50 annual report fee will be imposed on all LLCs to keep them in good standing with the Rhode Island Secretary of State. This annual report and the accompanying fee will remain a part of your yearly business expenses for as long as your LLC is active.
Starting a business in Rhode Island means you will enjoy all of the tax benefits granted by the LLC status. Because Rhode Island is home to a wealth of small businesses, it also has some innovative incentive programs, such as Innovation Network Matching Grants and the Small Business Loan Fund Program.
Learn more about the benefits of the LLC business structure and how you can best utilize it to your advantage when launching a new company in Rhode Island.
There is a wide variety of business taxes that your Rhode Island LLC will need to pay. These include taxes payable to the Rhode Island government, like Rhode Island sales taxes and Rhode Island state tax. You will also need to pay federal, self-employment, and possibly payroll tax to the IRS.
A great deal regarding the federal and state taxes you will owe will be determined by how you set it up in your Articles of Organization. All LLCs are required to pay a minimum of $400 in taxes annually to the Rhode Island Division of Taxation.
Businesses that have filed online are typically registered the same day that the application has been submitted to the Secretary of State’s business portal. Mailed applications may not be received and recorded for seven to 10 business days.
This is not a step required to complete your Rhode Island Articles of Organization, but it is heavily recommended for LLC launch success.
Your tax structure choice is a personal decision that depends on how you want to run your new business. Rhode Island allows you to choose to be taxed as a partnership, sole proprietorship (disregarded entity), or corporation. Regardless of profit or income, all LLCs will pay a minimum of $400 per year in taxes to the Rhode Island Division of Taxation.
At present, Rhode Island does not allow for the creation of a Series LLC.
You can visit the Rhode Island Department of Business Regulation or the Rhode Island Department of Labor and Training to find information about professional business licenses that may be required of your new LLC if you work in certain industries. Because there are licenses and permits on the federal, state, and local level, you’ll need to thoroughly research which ones your LLC needs.
All Rhode Island businesses that contain one or more employees must have workers’ compensation insurance coverage, and employers must display a poster naming their insurance carrier in a visible place within the company. Individual owners and partners are exempt from this requirement.
If you wish to transfer authority of your Rhode Island LLC to another party, you will have to fill out the Application for Transfer of Authority and submit it to the Secretary of State with all pertinent signatures.
We hope this guide has provided a clearer picture of what it takes to start a business in Rhode Island. But don’t fret — you don’t have to do all of these steps alone. From filing legal paperwork and acting as your registered agent to offering streamlined technology and automation for quick support, ZenBusiness is here to help you start and grow your business every step of the way. Contact us today!
Already a Rhode Island Business Owner? Learn how ZenBusiness can help you run or grow your Rhode Island small business today!
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