How to Form an LLC in Rhode Island

A limited liability company (or LLC for short) can be used to legally structure a company. This combination combines a corporation’s limited liability and flexibility with those of a sole proprietorship or partnership. An LLC is a good option for any business owner who wants to reduce personal liability in business lawsuits and debts.

These are the steps to create an LLC on Rhode Island.

1. Select a name for your LLC

An LLC name must include the words “Limited Liability Company” (or the abbreviations L.L.C. or L.L.C.) according to Rhode Island law. Both lower and upper case abbreviations of the word LLC are allowed.

The name of your LLC must be distinct from other business entities already in the Rhode Island Secretary files. You can check for name availability by using Rhode Island Secretary’s business database.

A Reservation Of Entity Name (Form 620), may be filed with the Rhode Island Secretary-of-State’s Corporations Division. You can file the reservation online, or by mail.

2. Name a Resident Agent

Each Rhode Island LLC must have a agent to serve process in the State. An individual or business entity agrees to accept legal documents on behalf of the LLC if sued. A resident agent (also known as registered agent in most states), must be a Rhode Island resident, or a business entity that is authorized to do business in Rhode Island. A registered agent must be located at a street address in Rhode Island.

3. Register Articles of Organization

By filing Articles of Organization (Form 404) with the Rhode Island Department of State, a Rhode Island LLC can be created. Articles must contain:

  • Name of the LLC
  • The name and address the registered agent of the LLC
  • How the LLC will be treated by federal tax authorities
  • The address of the principal office of the LLC
  • member-managed or manager-managed – if the LLC is managed by a manager, the names and addresses of the managers must be included.
  • The date that the Articles are effective, whether filed or later.
  • The signature of an authorized person

Articles can be filed online, or via postal mail.

4. Make an Operating Agreement

Although an LLC operating contract is not mandatory in Rhode Island, it is highly recommended. The Operating Agreement is the main document that establishes the rights, powers, and liabilities of members and the LLC. The Operating Agreement is an internal document that is not filed with the Department of State. An existing LLC or newly formed LLC that does not adopt an Operating Agreement will be deemed to have its articles of organization, bylaws, operating agreement, and/or member control agreement.

5. Get an EIN

Your LLC must have more than one member to obtain an IRS Employer ID Number (EIN). You must get an EIN for a single-member LLC if you have employees or if you choose to tax it as a corporation rather than a sole proprietorship. An online EIN Application can be completed. There is no filing fee.

6. Filing Annual Reports

All LLCs in Rhode Island and foreign LLCs that are authorized to do business within the state must file a Limited Liability Company Annual Report (Form 632), with the Rhode Island Secretary-of-State and pay a $50 filing fees. The annual report must be filed every calendar year from September 1 to November 1, starting with the year that the LLC’s original Articles of Organization were filed at the Secretary of State. You can file the report online or by post. This report should be filed with your resident agent.

FAQ for LLC

Should I create an LLC in Rhode Island,

You should form an LLC if you’re just starting your business, or if you have been running it as a sole proprietor. LLCs reduce the owner’s personal liability in business debts and lawsuits. They also allow for a lot more flexibility regarding ownership, management, and taxation. Learn more about LLCs to decide if they are the right structure for your business.

How can I find out if my LLC is available?

It is crucial to ensure that your LLC’s name can be distinguished from other businesses in Rhode Island. You can perform a name look on their website to verify that your name is available.

What does it cost to start an LLC in Rhode Island?

  • To file Articles of Organization, the Rhode Island Secretary of States charges $150
  • Reserve your LLC name for $50 with the Rhode Island Secretary Of State

While filing on your own can often be the most cost-effective option, completing all forms and filing them yourself can be difficult. You can also hire a lawyer, which will cost you hundreds to thousands of dollars. Some online LLC Formation services are available for just $$39 – 49.00.

Do I require an operating agreement for my Rhode Island LLC’s?

Although operating agreements are not required for LLCs in Rhode Island, it is strongly recommended. Operating agreements will protect you from limited liability, prevent managerial and financial misunderstandings, as well as ensure that your business rules are set by you and not state law.

Do you need a Rhode Island business license?

Your LLC may require additional licenses depending on the type of business it runs and where it is situated. If you need local licenses, contact the clerk in the municipality where your LLC’s principal place of business is located. You can find information about state licenses in the Regulations, Permits, and Licenses section of RI.gov. Nolo’s article Obtaining a Small Business License in Rhode Island has more information.

Do I have to pay Rhode Island business taxes?

All RI LLCs need to register with the Rhode Island Division Of Taxation. You will likely start the online process by filling out Form BAR, Application, and Registration Form. All LLCs are subject to a $400 minimum annual tax. This applies regardless of whether they make a profit or lose money.

Is it possible for a foreign LLC to do business in Rhode Island

All LLCs outside Rhode Island must register with Rhode Island’s Secretary of State in order to do business. For service of process, foreign LLCs must appoint an agent. Agents can be Rhode Island residents or business entities authorized to do business here.

You must fill out an Application to Register (Form 455) before you can register. You must send the application by post. A certificate of legal existence from the foreign LLC must accompany the completed application. It should not be older than 60 days.

Check the state’s Business Name Database to confirm that the LLC name is available before you file.

Is it possible to form a single-member LLC here in Rhode Island?

A single-member LLC in Rhode Island is the same as a multimember LLC for most purposes. These steps are used to create a single member LLC in Rhode Island.

A single-member LLC has more flexibility in filing a tax return. Nolo’s article Single-Member LLCs Pay Federal income Tax provides more information.

Is it possible to form a professional LLC here in Rhode Island?

You will need to create a professional limited liability corporation (PLLC) if you offer a licensed service in Rhode Island. Professional services can include attorneys, dentists and certified public accountants. If you offer a service that requires you obtain a Rhode Island state licensure before you can practice, you will be considered a professional service. A Rhode Island law allows LLCs to be created in order to provide professional services. Only one type of service can be offered and each LLC owner must be licensed or registered to provide the service.

How can I dissolve my LLC after I’m done?

To limit your liability in lawsuits and other government fees, you should properly dissolve your LLC when you are ready to close down your business.

Our 2023 List of the Best LLC Services for Any State

If you need to form a limited liability company in any of the 50 states, visit our page where we list the 12 best LLC formation services for 2023. Any of these top services are good choices but we continue to recommend ZenBusiness, Northwest Registered Agent, and Incfile.  

References

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