LLC Cost in Rhode Island – How Much to Pay for an LLC

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Perhaps you are hoping to form a Rhode Island LLC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Rhode Island.

Rhode Island LLC Cost of Filing

Here are the costs involved in forming an LLC in Rhode Island.

Cost of Filing Formation Certificates

The Rhode Island Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Rhode Island Secretary of State

Rhode Island Domestic LLC

  • Online Filing costs $150.
  • Annual Report filing costs $50
  • Name Reservation fee costs $50
  • By Mail: Fill out the application form, and send it to Division of Business Services 148 W. River Street Providence, RI 02904. Costs $150.

Rhode Island Foreign LLC

  • Online Filing costs $150.
  • Annual Report filing costs $50
  • Name Reservation fee costs $50
  • By Mail: Fill out the application form, and send it to Division of Business Services 148 W. River Street Providence, RI 02904. Costs $150.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Rhode Island LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Rhode Island, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

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Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Rhode Island Department of Revenue for regulatory boards or agencies requiring licensing. 

Taxes payable to the Rhode Island Department of Revenue

This article is your ultimate guide to the several taxes that an LLC has to pay in Rhode Island. Read on to know the taxes levied by the state & federal governments in Rhode Island. The state and federal taxes to be paid to the Rhode Island Department of Revenue are :

State Income Tax

Every member of the LLC formed in Rhode Island is liable for the State Income Tax. This tax is charged on the amount a person earns himself through the LLC. Usually, this tax is calculated while filing personal income tax returns. Rhode Island’s standard income tax rate ranges from 3.75% to 5.99%, depending on a person’s income.

State Sales & Use Tax 

The current state sales & use tax rate on LLC in Rhode Island is 7%. However, the tax rate changes as per the region or city in which the LLC is formed. Every LLC that sells tangible items or is a service provider, has to collect this type of tax & then pay it to the Rhode Island Department of Revenue.

Federal Self-Employment Tax

Like the State tax, every person earning money from the LLC has to pay this type of tax. It is sometimes called Social Security or Medicare tax. The Federal self-employment tax rate in Rhode Island is 15.3 percent. 

Federal Income Tax

The Federal Income Tax is levied on the LLC, depending on the earnings of the LLC, the tax bracket applicable to such earnings, & the manner of filing. This Tax is levied on all the profits earned by the company.

Employee & Employer Taxes

An LLC with several employees drawing monthly salaries has to also pay Employee-Employer taxes, in addition to the taxes mentioned above. These tax implications vary, depending on various factors, e.g., the amount, number of employees, etc.

Cost Comparison between states

Rhode Island shares its borders with two states, namely, Massachusetts & Connecticut. Each of these states has a different rate of taxes levied on LLCs. Let us take a look at this comparative chart.

StatesFiling FeeAnnual/Biennial FeeSales Tax
Rhode Island$150$507%
Massachusetts$125$856.35%
Connecticut$520$5006.25%

Based on the kind of industry you LLC operated in, your LLC will be liable to some other taxes & duties. For Example, if your LLC is in the sector of import & export, you have to pay the import-export duty. You should consult with a professional to verify the tax rates or business costs of registering an LLC in Rhode Island.

Other Costs

How Much Does It Cost to Maintain an LLC in Rhode Island

There are some recurring costs when operating an LLC in Rhode Island. For example, the state requires every LLC to file an annual report with the Department of State. The cost of filing this report can be between $50 and $100. Fortunately, it’s not that expensive. Once it’s established, LLCs in the state do not have to worry about recurring fees. Most of them are covered by the LLC’s yearly fee.

Once your LLC has been formed in Rhode Island, you must register it with the Division of Taxation. As long as you have at least one member, you will need to pay a minimum of $400 in taxes each year. This amount will be calculated based on the number of members you have. You must pay the tax on the 15th day of the third month after the end of the fiscal year. This is especially important if you have employees. If your LLC has employees, you will also need to obtain a Federal tax identification number. Most banks will require this number to open a business bank account.

Once you’ve created your LLC, you’ll need to pay various taxes to run the business. Sales tax, for example, is charged at a 10% penalty for late filing or payment. Other taxes will also be charged if you don’t make them. Fortunately, these fees are all one-time and won’t surprise you with unexpected costs. For this reason, forming an LLC in Rhode Island is worth considering.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

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