Rhode Island LLC – How to Form an LLC in RI (2022)

How to Start an LLC in Rhode Island: If you’re interested in setting up a Rhode Island LLC, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Rhode Island laws make it easy to establish your LLC in Rhode Island. On this page, You’ll find all the steps that must be taken to ensure that your Rhode Island LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂

How to Start an LLC in Rhode Island

An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.

If you wish to start an LLC in Rhode Island, mainly you have to file your Certificate of Formation with the State and pay a filing fee of $150. There are some more steps to follow to get your LLC established in Rhode Island. The following steps explain everything you need to create your LLC in Rhode Island in 2022. Let’s get started!

Step 1: Decide a Name for Your Rhode Island LLC

The very first step while forming an LLC in Rhode Island is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.

Rhode Island LLC Naming Guidelines

There are a few specific requirements all the LLCs in Rhode Island have to follow while naming their Company. Some of the most important requirements are as follows:

• Your business name should be available and no other existing business in Rhode Island can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
• “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
• You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
• Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Rhode Island State Government are fulfilled.
• (Optional) It’s better to name your business something for which your desired domain is available.

Important Links –	Submit Offline Form to –
Rhode Island Business Entity Search – Online Name Search Name Reservation Form – PDF Name Availability Standards – Guidelines Rhode Island LLC Name Search – Instructions	Office of the Secretary of State Corporations Division 148 W. River Street Providence, Rhode Island 02904-2615

Reserve Business Name for Future

If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 120 days. To keep the name, you have to file a name reservation application and pay $50 to reserve your name with the Rhode Island Secretary of State. An additional $2.50 fee should be paid for online filing.

Doing Business As (DBA) or Trade Name

Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Rhode Island Secretary of State by submitting an Application to Register a Trade Name in Rhode Island along with the filing fee of $10.

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Step 2: Assign a Registered Agent in Rhode Island

The second step to forming a Rhode Island LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Rhode Island. Hence, hiring a competent Rhode Island Registered Agent for your LLC is necessary. 

Make sure your registered agent is a resident of Rhode Island or has a physical street address. Their business address or the principal address should be in Rhode Island. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.

These LLC formation services are recommended registered agent services as they are authorized to conduct business in Rhode Island. Some LLC formation services offer standalone Rhode Island registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.

Registered Agent Consent Application

In Rhode Island, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $10 should be paid for it. For more information on the same, read our guide on Rhode Island Registered Agent.

Step 3: File Articles of Organization in Rhode Island

The third and most important step in forming a Rhode Island LLC is to file the Articles of Organization. This Rhode Island Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $150 (by mail and $208 online) to file your formation certificate in Rhode Island. (Read more on LLC cost in Rhode Island).

The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Rhode Island LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Rhode Island then you need to register as a Rhode Island Foreign LLC.

Processing Time: It takes 5 to 7 business days to get a Rhode Island LLC if you file it online or by mail. By paying an additional fee, it can be expedited.

Step 4: Create Your Rhode Island LLC Operating Agreement

Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

When it comes to filing a Rhode Island LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Rhode Island, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Rhode Island LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.

Step 5: Filing a Rhode Island LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter. 

EIN is needed when the LLC hires employees. Hiring employees in Rhode Island LLC requires following specific rules and regulations. On the other side, EIN for Rhode Island foreign LLC should be obtained if your LLC is based in other states.

To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.

Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999

Fax: (855) 641-6935 | Fee: Free

Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

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Congratulation, you are now done with all the necessary steps to form your Rhode Island LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.

However, if you use TailorBrands it should take fewer hours and you always have live chat with expert support for any help you need.

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After Starting Your Rhode Island LLC

After forming your LLC, there are still some things that you will need. Take note of the following:

• Get a company business bank account
• File Rhode Island business permits & licenses
• Get general liability insurance and professional liability insurance with coverage for employees
• File a Rhode Island LLC annual report or biennial report

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.

Cost of Rhode Island LLC

Forming an LLC in Rhode Island is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Rhode Island LLC. LLCs have pass-through taxation. Hence, your Rhode Island LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Rhode Island,

Fees/Tax	Amount to be Paid
Name Reservation Fee (online)	$50
Name Reservation Fee (By mail)	$52.50
Certificate of Formation Fee	$150 (by mail and online)
LLC Annual Fee	$50
Sales Tax	7%

In Rhode Island, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 120 days without registering your LLC. It can be done by paying $50.

In Rhode Island, an Annual Report has to be produced every year. It costs $50. Also, the State of Rhode Island requires LLCs to pay a Sales Tax of 7% every year. Read our guide on LLC costs in Rhode Island for more information.

Rhode Island Foreign LLC

If you are interested in forming a Foreign LLC in Rhode Island then you need to file the Certificate of Foreign LLC to the Rhode Island Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Rhode Island SOS to form your foreign LLC in Rhode Island. To know more in detail, check out our guide on Rhode Island Foreign LLC.

Reasons to Start an LLC in Rhode Island

If you look at Rhode Island’s insights, it is one of the smallest states in the USA but has large opportunities for businesses. Industries are established in the state and are thriving well due to the business environment and incentives offered. So, if you are also willing to start a Rhode Island LLC, here are some of the benefits the state government offers to their LLC start-ups.

Incentives for Small Businesses

Any new Rhode Island LLC that is starting up as a small business will be eligible for plenty of incentives and tax benefits provided by various government entities. A glimpse of some of them is shown below.

• Any capital gained by the small business will be excluded from the taxation list for some time to invest more in strengthening their foundation. Also, many modifications are to be made in the company’s structuring, for which some amount is to be paid to the government. A business is also exempted from these taxes. Read more on Rhode Island’s classification of LLC tax.
• Some specific activities are listed by the Rhode Island state government and clarify that if the LLCs follow these activities, they will enjoy some tax credit.

Small Business Loan program 

In Rhode Island, small businesses are liable for 98.9% of the state’s income. That is why the government started a special loan program named Small Business Loan Fund Program. It ensures that any small business looking to level up should not miss an opportunity due to a money crisis. The maximum capital one can derive from the loan is $500,000, which is more than sufficient for carrying forward any expansion-related activity.

Innovation Network Matching Grant 

The INMG program is designed for LLCs in Rhode Island that is medium to small in size. The key industries to whom these grants are provided the healthcare, food and agriculture, life sciences, etc. These businesses are considered essential for running human life, and that is why the incentives are provided to such businesses on the tax they file with the state government.

Best Businesses in Rhode Island

To form an LLC in Rhode Island, you need to gain complete knowledge of the smallest state’s businesses. Several businesses are well flourishing in the state, but only a few have contributed hugely to its GDP. Here is the list of those top 3 businesses

Tourism Industry

One of Rhode Island’s most prominent players, tourism, provides jobs to 50,000 people of such a small state. The state’s total contribution to the country is around $5.75 billion, and the reason behind this is the top-class tourism spots in the state. There are many historical monuments in the state with a long 400 miles of seashore.

There is a place named Benefit Street, which is most popular in the state, and people love to stay around that place due to its artistic and intellectual centers.

Manufacturing sector

The textile mills and jewelry businesses of the state are very famous around the country. For a very extended period of time, the jewelry businesses of the state are also known as the world’s jewelry capital. The jewelry is focused on the inexpensive yet beautiful stones that are procured from the seashore easily.

Other than jewelry, there are some production houses for electrical appliances also in the state. All of these businesses have combined contributed an amount of $4.65 billion to the state’s GDP.

Fishing and Agriculture

Due to the long seashore present in the state, the businesses related to fishing activities are thriving well. A vast mackerel market, cod, striped bass, etc., fishes due to its commercial demand. The state is also dependent on its agriculture sector for milk, sweet corn, and potato.  The overall contribution of both these sectors is around $.12 billion.

Some small businesses that are working goof in the state are:-

• Special cultural food businesses
• Custom jewelry shop
• Fabricated metal products business

Rhode Island LLC Formation Review

How Fast Can I Form an LLC in Rhode Island

Business filings like LLC in Rhode Island may take up to 5 to 7 business days, depending on the number of applications. Expedited fees may apply to speed up the process.

The first step in forming an LLC in Rhode Island is choosing a unique name for your business. Make sure the name is not already used by another company. Use online tools to help you come up with a unique name for your business. Remember that there are rules for naming businesses in Rhode Island, so follow these guidelines to avoid any legal pitfalls. How Fast Can I Form an LLC in Rhode Island?

There are several requirements for operating an LLC in Rhode Island. You must file annual reports with the state and pay a filing fee of $50. This fee covers administrative costs. However, you can file online, by mail, or in person. To make sure that your name is available, you can use a free business name search tool. It is advisable to consult a tax expert before choosing a business name.

When you file your LLC’s Articles of Organization in Rhode Island, you must choose a registered agent. You can hire a person to act as a registered agent or use a service to do the job. If you hire a registered agent service, you’ll save time, as the process of filing your business’ Articles of Organization can be time consuming. Once you’ve chosen a registered agent, it’s time to prepare your business’ paperwork and submit them.

Once you have all the documents, the next step in forming an LLC in Rhode Island is filing the Certificate of Name Reservation. This process takes two to three business days online and up to five to ten days by mail. You can file this form online or mail the documents to the Secretary of State’s office. Then, you must file your annual report. Once you’ve completed the paperwork, you can start the next steps: setting up your operating agreement, which governs the framework of your business. The operating agreement outlines ownership rights, member responsibilities, and how profits and losses will be distributed.

The processing time for an LLC in Rhode Island depends on its size and type. Smaller companies can be created in a week or less by filing an LLC online, while large firms can take as little as three days. You can also file an LLC in Rhode Island by mail if you prefer. However, remember to include the name and address of your registered agent. Your documents will be returned to you in a couple of business days.

Operating agreements are optional in Rhode Island, but highly recommended. They set out the basic information of your business and must be filed with the Secretary of State. A Rhode Island LLC can be taxed as a corporation, partnership, or entity separate from its members. The operating agreement can be written as a general statement or as an operating agreement. Depending on the nature of the business, it could be taxed as either.

F.A.Qs

In Conclusion

LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in Rhode Island at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.