How to form an LLC in Rhode Island

One of the many benefits for small companies is the restricted liability protection and tax breaks that are available to them via forming an LLC. Follow these easy steps to get your limited liability company (LLC) up and going in Rhode Island if you’ve decided that an LLC is the most suitable business structure for your requirements.

Note that you have the option of forming the limited liability company (LLC) yourself, or you can find a professional company formation agency to do all of the legwork on your behalf.

1. Give Your Rhode Island LLC a Name

When choosing a name for a limited liability company (LLC) in the state of Rhode Island, there are two primary rules that must be followed:

• The name of a limited liability company (LLC) must be able to be differentiated from the names of other business organizations already registered with the Rhode Island Department of State.
• One of the following terms or abbreviations must be used in the name of a limited liability company (LLC): “Limited Liability Company,” “LLC,” or “L.L.C.” It is acceptable to use either upper or lowercase forms for abbreviations.

Check LLC name availability

Using the Rhode Island Department of State Business Entity Search, you may check to see whether the name you have selected for your limited liability company (LLC) is being used by another company in Rhode Island.

Make a reservation for your company’s name with the State Department

When you have found a name for your limited liability company (LLC) that is not in use by another company, you may reserve it with the Rhode Island Department of State to prevent that name from being used by another company until you are able to submit your articles of organization.

You may reserve a name for up to one hundred and twenty days by submitting a Reservation of Entity Name form to the Corporations Division of the Department of State either online or via mail. The filing cost is fifty dollars.

2. Choose a registered agent in the state of Rhode Island

A registered agent in Rhode Island is required of every limited liability company operating in the state. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.

The Registered Agent might be a resident of Rhode Island or a business entity that is licensed to conduct operations in the state of Rhode Island. It is required that the Registered Agent have a real, live street address in the state of Rhode Island.

What exactly is the role of a Registered Agent?

A Registered Agent is a person or business entity that is accountable for receiving important tax forms, legal documents, notice of lawsuits, and official correspondence from the government on behalf of your company. This can include tax forms, official papers, notice of lawsuits, and official correspondence. Consider the role of your personal representative as that of the point of contact for your company with the state.

Who is eligible to serve as a Registered Agent?

A Registered Agent must either be an individual who lives in Rhode Island on a permanent basis or a company that is permitted to carry on business in the state of Rhode Island. An example of the latter would be a Registered Agent service. You have the option of selecting anybody who works for the organization, including yourself.

3. Publish your company’s articles of incorporation

Your limited liability company (LLC) will be formally recognized after you have a document called the Articles of Organization that lays forth fundamental information about your business. Because this form serves as the legal registration for your company with the state, it is essential that all of the details be accurate.

What should be included in a company’s Articles of Organization?

When completing the Articles of Organization for your Rhode Island limited liability company, you are required to include the following information:

• LLC’s name
• If the term of the LLC is permanent or restricted.
• Address of the main office of the limited liability company Name and address of the registered agent for the limited liability company
• Location where the Secretary of State should send notifications to the limited liability company (LLC) through mail.
• How the Limited Liability Company (LLC) will be run: by its members or by its managers
• Whether or whether the limited liability company will offer professional services
• Name and address of each LLC organizer and at least one member or management familiar with its activities
• LLCs that are considered to be operating in a state other than the one in which they were first registered are considered to be foreign LLCs and are required to pay a separate fee.

Submission of Your Organization’s Articles of Incorporation

In order to make your limited liability company (LLC) legally recognized in the state of Rhode Island, you will need to submit the Articles of Organization to the Department of State’s Business Services Division and pay the filing cost of $150. You have the option of submitting your Articles of Organization either in person, through mail, or online.

If you submit your return through the online system, you will be subject to a “price for increased access” in the amount of six dollars. Regardless of the method you choose to submit your documentation, the state will process it within three to four business days after receiving it.

4. Obtain a Certificate From the Government of Your State

After the formation paperwork of the LLC has been submitted and authorized, the state will send you a certificate that proves the LLC’s official existence in response to a written request for a copy together with the appropriate amount of postage.

With this certificate, the limited liability company will be able to get an Employer Identification Number (EIN), as well as business permits and business bank accounts like Novo checking or Kabbage.

5. Draft an Operating Agreement for Your Company

Even while establishing a detailed LLC operating agreement is not a legally required step for founding a limited liability company in Rhode Island, it is highly suggested for all new limited liability firms to do so.

The following items should be included in the operating agreement:

• Describe the business structure of the limited liability company.
• Determine the specific duties and commitments that each member of the limited liability company (LLC) has
• Mapping out the operational structure of the LLC.

Without an operating agreement outlining the specific duties of each member, a limited liability company (LLC) may face significant legal and practical difficulties.

6. Obtain an EIN number

A number of limited liability companies (LLCs) will be required to get a Federal Employer Identification Number (EIN), often known as a tax ID number. An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service. 

You need an EIN in order to pay federal employer taxes, open a bank account (in most situations) or recruit staff.

On the website of the Internal Revenue Service (IRS), which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online. 

Single-member limited liability companies, which are an exemption to the rule that most firms are required to acquire an EIN, may instead use the owner’s Social Security number.

Business Licenses

Depending on the nature of the business they conduct and the location of their operations in Rhode Island, some limited liability companies (LLCs) may be needed to get one or more business licenses or permits from the state or from their respective municipal governments.

Consult the Rhode Island Start a Company Guide, which is made available by the Secretary of State, for information on how to satisfy the prerequisites for obtaining a state license to operate a business. The Rhode Island License Directory allows for the search and retrieval of specific license information.

Contact the municipal or county clerk where your LLC is situated for local licensing requirements.

7. File RI Annual Renewals

Rhode Island mandates that all limited liability companies (LLCs) submit an annual report to the Department of State’s Business Services Division in addition to paying a filing fee of $50. You have the option of filing either in person, through mail, or online.

The annual report for the Rhode Island limited liability company is due between February 1 and May 1. If you submit your report after the 31st of May, it will be deemed late and there is a possibility that you may be charged a penalty cost of $25. 

In the event that you do not submit it, your limited liability company may be terminated administratively.

Costs and next steps

Costs

To submit the Articles of Organization with the Secretary of State in Rhode Island, a fee of $150 is required. The Secretary of State of Rhode Island will charge you $50 to reserve the name of your limited liability company.

Consider the following additional fees that may be incurred by an LLC:

• Reserving a Name for an LLC
• DBA (Doing Business As) name
• Certificate of Existence
• Copy of certified documents

Next Steps

When you register a limited liability company (LLC), you establish a legal basis upon which to operate your firm. Companies should make it a priority to maintain their limited liability company in compliance with state regulations and in an active position on the state’s website.

In addition, having a registered limited liability company enables you to perform the following:

• Register your company with the department of revenue in your state.
• Create a bank account for your business.
• Create a credit card account for your company.
• Invest in insurance coverage for your company.
• Obtain any permissions or licenses that are required to run your business, such as those issued by the health department, the zoning department, the department of home occupations, the department of professional licensing, and so on. Some states need a seller’s permission to conduct sales
• Create a trademark to protect both your company’s name and its logo.

Form LLC yourself or get help?

To establish a limited liability company (LLC), you are not required by law to consult a lawyer. The majority of states enable the establishment of LLCs via the process of registering the business entity on the website of the secretary of state and with the Internal Revenue Service (IRS).

If you are not acquainted with the process of forming an LLC, your best bet may be to secure the services of an LLC setup service so that you can be certain that the creation will go smoothly and quickly.

When entrepreneurs start a new firm, they may save startup costs and save valuable time by using a professional agency that specializes in company forms. They can take care of the things that you may not have time to think about for a price ranging from $50 to over $500, and some examples of such things are as follows:

• Developing an operating agreement for an LLC that details your company’s who, what, when, where, why, and how, and putting it into writing (required in some states).
• putting together articles of incorporation that identify the management of the LLC, the registration agent, and the date the company was formed.
• Taking up the role of registered agent for your firm.
• Keeping careful records in the event that there are investigations or litigation.
• Payment of filing fees and registration with the appropriate parties.
• Registering the name of your firm and ensuring that the name you choose for your limited liability company is accessible.
• Finishing up and turning in all of the necessary legal and formation documentation.

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