How to Form a Rhode Island LLC

By Catherine Hodder, Esq. | Legally reviewed by Ally Marshall, Esq. | Last reviewed November 20, 2022

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Limited liability companies (LLCs) are a unique type of business structure. Many small business owners choose an LLC entity because of its personal liability protection and pass-through taxation. You can create a Rhode Island LLC for your existing or new business by following the step-by-step guide below.

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Table of Contents

Steps to Form an LLC in Rhode Island

1

Name Your LLC

Create a Unique Business Name. Your LLC needs a unique name that follows Rhode Island's LLC naming rules. According to the Rhode Island Limited-Liability Company Act, your LLC name must end with the words "Limited Liability Company" or the abbreviations "LLC" or "L.L.C." The only exception is if you are starting a low-profit limited liability company. In that case, your limited liability designator is L3C or l3c.

Determine Business Name Availability. Your LLC's name must differ from all other registered Rhode Island business names. To find out if your desired name is available, you should check the Rhode Island Department of State's business name database. There, you can search by business entity name. You will need to choose a new name if there are any matches.

If there are no results, you should continue by performing an internet screening search. To do this, simply type your name into your favorite search engine.

It's a good idea to make sure your domain name is available, even if you don't start your website immediately. With a reserved domain name, you will have a memorable web address at hand when you're ready to create your website.

If you still have no matches, you should complete your search by checking the U.S. Patent and Trademark Office (USPTO) database. This search will help you avoid infringing on another company's trademark.

Reserve Your Business Name. If you want to reserve your LLC name before registering, you can file an online name reservation. You submit a $50 filing fee along with the reservation. This fee secures your Rhode Island LLC name for 120 days.

Protect Your Business Name. Once you decide on your name, you want to keep others from using it. There are two ways you can secure your business name:

  • You can register your business name as a domain name. Use a domain name registrar to secure your domain name.
  • You can register your business name as a trademark. To get a federal trademark, apply at the USPTO. Or file a trademark application with the Rhode Island Secretary of State. The cost for the trademark registration is $50.

2

Get a Registered Agent

Your Rhode Island LLC must have a resident agent. People may refer to this as a "registered agent," too. A resident agent is a person or business to accept legal documents on behalf of your LLC. This includes service of process if someone sues your business.

According to Rhode Island statutes, your resident agent must either be a Rhode Island resident or a business authorized to operate in the state. You should choose a company or person that is available at their physical address during regular business hours. You will list this authorized person or entity's physical street address in your articles of organization.

Consider using a professional service if you and your other LLC members cannot act as the LLC's resident agent. With a registered agent service, you pay a yearly fee to a company that agrees to accept your legal papers on your behalf.

3

File Your Articles of Organization

To formally start an LLC in Rhode Island, you file articles of organization with the Secretary of State.

Articles of organization establish basic identifying information about your LLC. You can think of your articles of organization as your LLC's charter. It's not a complex document but contains essential information about your business.

You will need to provide the following information for your Rhode Island articles of organization:

  • The name of your limited liability company
  • The name and address of your resident agent and registered office (a physical address, not a P.O. Box)
  • How to treat the LLC for federal tax purposes
  • The name and street address of your LLC's principal office (a physical address, not a P.O. Box)
  • Whether the LLC is member-managed or manager-managed
  • If manager-managed, provide the managers' names and addresses
  • The effective date of the LLC (upon filing or specify an effective date no later than 90 days from the date of filing)
  • The name and address of the person authorized to sign the articles of organization document

You can complete your articles of organization online at the Rhode Island Secretary of State website. The filing fee is $150 plus a $6 enhanced fee if you file online. Or you can fill out the articles of organization and mail it in with the $150 fee to the:

Division of Business Services
148 W. River Street
Providence, RI, 02904-2615

Make checks payable to the RI Department of State.

4

Draft an Operating Agreement

Although Rhode Island doesn't require it by law, creating an LLC operating agreement is a good idea.

An LLC operating agreement is different than the articles of organization. The operating agreement forms a consensus among members on key business issues. It is an internal company document you do not need to file with the state. However, other professionals may insist on seeing this document before doing business with your company.

In your Rhode Island LLC operating agreement, you should cover issues such as:

  • Management structure
  • Voting Rights
  • Buyout procedures
  • Percentage ownerships
  • Member rights and responsibilities
  • A plan for dissolving the LLC
  • Any other matters that are important to your LLC

5

Get an EIN

Unless you have a single-member LLC with no employees, you must apply for an Employer Identification Number (EIN). An EIN is a unique number the IRS uses to identify your company for tax purposes. You can think of it as a Social Security number for businesses. You may need an EIN for employee payroll, to open a business bank account, or to get a business credit card. You can apply for an EIN by fax, mail, or online at the IRS website.

6

Set Up Business and Tax Accounts

The Rhode Island Department of Revenue Division of Taxation has an online new business application and registration (BAR) form where you can set up a retail sales account, income tax withholding account, and unemployment insurance account for your LLC.

You can learn more about your federal tax requirements by visiting the Internal Revenue Service (IRS) website. Find out about your state obligations by contacting your local officials and using the state resources discussed below.

Business and Tax Requirements in Rhode Island

Every Rhode Island LLC must register for state taxes with the Rhode Island Division of Taxation. New businesses file a new business application and registration (BAR) online form to set up the LLC's taxpayer accounts. You can also download the form and mail it to the Rhode Island Division of Taxation, One Capitol Hill, Providence, RI, 02908.

You must follow licensing and tax rules carefully to maintain your business. Your requirements will vary depending on the location and your type of business operation.

State Business Tax

If you set up your LLC for pass-through taxation, the LLC does not pay corporate income tax. Instead, the profits go on the members' individual tax returns. The individuals pay a state income tax on their income. If you set up the LLC for corporate tax treatment, the LLC pays a corporate tax to the state. Currently, the corporate income tax in Rhode Island is 7%.

State Employer Tax

If your LLC has employees, even if the employees are also members of the LLC, you must comply with tax and reporting obligations. Employers in Rhode Island are subject to Employment Security Tax (unemployment insurance), Temporary Disability Insurance, and a Job Development Fund Tax. The Rhode Island Department of Labor and Training has information about the taxes and when they apply.

Additionally, employers must:

Sales and Use Taxes

If you sell, rent, or lease tangible personal property at retail, you are a "seller" in Rhode Island. When you register your LLC with the Rhode Island Division of Taxation as a new business, you can create a seller's permit. If your LLC is a seller, it charges sales tax to the purchaser, and you remit it to the state.

Business Licenses and Permits

Depending on your type of business, you may need to apply for a professional business license with the state. You should also check your local city and county governments for their business license and permit requirements.

Registration in Other States

If you want to do business in another state, you will likely have to apply to do business as a foreign LLC. You may need to show a certificate of good standing as part of the application process. You should request a certificate of good standing from the Rhode Island Secretary of State to prove your LLC exists and complies with state laws. The fee for the long-form certificate is $30.

Annual Filing Requirements in Rhode Island

You must file annual reports with the Rhode Island Division of Business Services to keep your LLC in good standing. An annual report is a simple form, essentially basic information about your company. You can download and complete the limited liability company annual report or file it online. There is a $50 state fee for the annual report.

The filing period is from February 1 to May 1 each year. There is a $25 penalty if filed after May 31.

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Rhode Island LLC Formation FAQs

    • To set up an LLC in Rhode Island, there is an initial $150 filing fee for the articles of organization. Each year after that, you complete an annual report and pay a $50 filing fee.

    • You will need to pay a filing fee of $150 to file your articles of organization with the Rhode Island Secretary of State. If filed online, there is an extra $6 "enhanced fee." If you want to reserve your name prior to filing, there will be an additional $50 charge.

    • To keep your LLC compliant with Rhode Island law, you file an annual report for your limited liability company. You can file the annual report online or by mail. The filing fee is $50, with a $2.50 surcharge for online filings.

    • Single-member LLC. A single-member LLC is an LLC with one owner or member. A single-member LLC is similar to a sole proprietorship, where the profits of the LLC go on the owner's individual income tax returns. The filing requirements are the same for a single-member LLC as a multi-member LLC.

      Multi-member LLC. An LLC with more than one owner or member is a multi-member LLC. A multi-member LLC is similar to a partnership where the LLC profits go on the individual owners' tax returns.

      Professional LLC. A professional LLC (PLLC) is an LLC owned by licensed professionals such as doctors, lawyers, and accountants. Rhode Island does not have a separate business entity for professional limited liability companies. However, a licensed professional may create an LLC for their business. Rhode Island does offer a professional corporation (PC) for licensed professionals, but corporations have stricter requirements than LLCs.

      Low-Profit LLC (L3C). You can form a low-profit LLC under Rhode Island law for charitable or educational purposes. Unlike most businesses, a low-profit LLC's primary goal is to work toward the public good, not to generate profits. In this way, it's similar to a nonprofit corporation. The LLC may produce profits, but the main purpose is to further a charitable or educational goal. If you are starting a low-profit LLC, there will be a special naming requirement in Rhode Island. A low-profit LLC's name must end with the words "low-profit limited liability company." Or it can contain the abbreviations "l3c" or "L3C."

    • Articles of organization is your initial limited liability company's formation document or charter. You may need a copy of your articles of organization to open a business bank account or apply for a business license. If you need a certified copy, you must get it in person, by phone, or by mail. There is $10 plus a $0.15 per page fee.

    • Only the Rhode Island Secretary of State issues a certificate of good standing for your LLC. The certificate verifies that your LLC is current with Rhode Island's laws and tax and reporting obligations. If you register as a foreign LLC or apply for a bank loan or line of credit, you may need to show a recent certificate of good standing. You can order a certificate of good standing online, in person, by phone, or by mail. The fee is $30 for the long-form certificate.

    • To form an LLC in Rhode Island, you will need the following:

      • An acceptable LLC business name
      • Registered agent and registered office address in Rhode Island
      • Completed articles of organization
      • Payment of the $150 filing fee

    • Limited liability protection helps to shield your personal assets from your company's liabilities. This means that your personal bank account, vehicles, real estate, and other personal property are not at risk if someone sues your LLC.

      Another advantage LLCs offer is pass-through taxation. The LLC profits pass-through to the members' individual tax returns, so they avoid a corporate tax on LLC profits.

      And in Rhode Island, you can create a low-profit LLC if your business's primary purpose is furthering a charitable or educational goal.

    • To maintain the status of your LLC, you file an annual report each calendar year after the year of your LLC formation and pay a $50 state fee. The report is due between February 1st – May 1, with a $25 late fee charged after May 31. You can fill out the limited liability company annual report and mail it or file it online. Failure to file an annual report may result in the automatic dissolution or revocation of your LLC charter in Rhode Island.

    • No. The articles of organization is the initial LLC formation document. It is a public record filed with the Rhode Island Secretary of State. An operating agreement is not a public record but an internal business agreement that defines your business operations.

    • Yes. In Rhode Island, if you want to use a name different than the legal LLC name registered with the state, you file a fictitious business name statement. A fictitious name is also known as a "DBA" (meaning doing business as) or an assumed name. The name must be available in Rhode Island, so check the name search database first.

    • Yes. The Secretary of State of Rhode Island allows you to file online for LLC formation. You must set up a user account to use their system. Some business owners, however, do not want to set up an account and prefer using a professional LLC formation service company to file their articles of organization.

    • The Rhode Island Secretary of State Division of Business Services oversees limited liability companies in the state. The mailing address is:

      Secretary of State
      Division of Business Services
      148 W. River Street
      Providence, RI, 02904-2615

    • Yes. Although you can serve as your own registered agent in Rhode Island, many small business owners choose to use a professional registered agent service. Often, the value of a professional Rhode Island registered agent outweighs the cost. Some of the benefits they offer:

      • Provide a Rhode Island address. Some Rhode Island LLCs have owners in other states. They may need a registered office with a physical Rhode Island Street address.
      • Handle sensitive matters. Registered agents accept service of process at the registered office address, not your place of business. Therefore, your customers don't have to know about your business disputes.
      • Keep your LLC in good standing. Failure to file your annual report may trigger late fees and, in the worst-case scenario, involuntary dissolution. Registered agents alert you to annual report deadlines.
      • Provide administrative assistance. They can help you get the forms you need, such as a copy of your articles of organization or certificate of good standing. They can also assist with registration in another state as a foreign LLC.
      • Are available. A registered agent must receive service of process during regular business hours. As a busy entrepreneur, you may not be available during those hours.

    • An LLC formed under the laws of Rhode Island and accepted by the Rhode Island Secretary of State is a domestic LLC. A foreign LLC is an LLC organized in a state or jurisdiction outside Rhode Island.

    • To register your LLC to do business in another state, you must complete an application to be a foreign LLC. You do this with the Secretary of State's office in the new state. Then you can apply by doing the following:

      • Check that your LLC is in good standing with the Rhode Island Secretary of State
      • Request a certificate of good standing from Rhode Island to show the new state
      • Search the new state's business records for your LLC's name availability
      • File an application as a foreign business entity in the new state
      • Pay the state fee for foreign business registration

    • If you have an LLC formed in another state or jurisdiction, it is a foreign LLC. To operate your LLC in Rhode Island, you must file an application for registration for a foreign limited liability company. Along with this form, you must submit a $150 filing fee and a certificate of good standing. A certificate of good standing is a document you can request from your LLC's Secretary of State.

      You will also need to make sure that your business name is unique in Rhode Island. If another Rhode Island business already uses your name, you will need to pick a new one.

    • When you no longer want to do business as a limited liability company in Rhode Island, you do it by filing articles of dissolution. You could be subject to outstanding tax liability or penalties if you don't formally dissolve your LLC. In Rhode Island, you can only file the articles of dissolution by mail.

      • Follow the dissolution terms in your operating agreement
      • Close the LLC's tax and business accounts
      • Complete the articles for dissolution for a domestic limited liability company
      • Enclose a $50 check payable to the RI Department of State
      • Mail the Articles of Dissolution to the Business Services Division, 148 W. River Street, Ste. 1, Providence, RI 02904

    • No. Rhode Island does not allow you to set up an anonymous LLC. An anonymous LLC does not list the LLC owner's name on the articles of organization. At this time, only Delaware, Nevada, New Mexico, and Wyoming allow anonymous LLCs.

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