How To Set Up An LLC In Rhode Island (2024 Guide)

There are certain obligations to take care of before filing LLC documents. Make sure to understand what is needed before you file for your LLC.

Confirm Your LLC Business Name’s Availability

Before registering your LLC, you should first check that another business hasn’t already done so. The fastest way to confirm availability is to do a business entity search through the Secretary of State’s website.

If a name is available but you are not yet ready to move forward, hold it by submitting a Reservation of Entity Name form or complete the process online. The fee is $50. Once your form gets accepted, you may hold a business name for up to 120 days.

Please note that your name must include the words “Limited Liability Company” or an approved abbreviation such as “LLC” or “L.L.C.” (note that capitalization is optional).

Get a Registered Agent

Rhode Island requires that your LLC have a registered agent. This person or business receives and handles critical legal documents for your Rhode Island LLC. You can act as your own agent, provided you are at least 18 and have a physical address where you are present during all business hours. You may even appoint LLC members to act as the LLC’s registered agent.

That said, a registered agent’s information is a matter of public record, and a great deal of responsibility goes into the role. Therefore, hiring a third party to be the LLC’s agent is rather common. The cost is typically between $49 and $300 per year.

Purchase Web Domain

If you do not already have one, it is a good idea to set up and update a company website for your LLC brand. Websites are ideal for building up customer trust and industry authority. If applicable, plan on sharing content such as ebooks and white papers to further distinguish your business from the competition.

Domestic LLCs (those located within the state) need to complete and submit their Articles of Organization. Likewise, foreign entities (those not located within the state) wishing to operate within Rhode Island must turn in an Application for Registration. The cost for domestic and foreign LLCs is $150. Make your checks or money orders payable to the RI Department of State.

Foreign businesses trying to establish an LLC must include a Certificate of Good Standing or Letter of Status. This document must be dated within 60 days of the date of your completed LLC paperwork.

If submitting in person, you also have the option to pay using cash or a credit card. Additionally, you can complete the process online. You may personally hand in or mail completed forms to the Division of Business Services, 148 W. River Street, Providence, Rhode Island 02904-2615. Forms will need to be typed; otherwise, you risk getting your request rejected.

Assuming there were no errors or complications, the length of the process varies according to how you submitted your forms. LLC documents submitted in person may get processed the same day, while online LLC submissions can take one or two days to process. Otherwise, you may have to wait up to two weeks for any documents submitted to the state by mail.

Rhode Island typically does not submit notifications of successful LLC formation by mail, choosing instead to post information online. Even if the formation request gets rejected, there will generally be an email notification of the failure followed by the return of the document if you filed in hard copy.

The following sections cover the steps you will need to do to maintain the good standing of your Rhode Island LLC.

Create an LLC Operating Agreement

Though not legally required, it is still an excellent idea for LLC members to write out an operating agreement. Even single-member LLC owners should create one.

The details in the document determine how your company operates over the long term. Operating agreements typically clarify the financial and functional decisions related to the LLC, addressing essential details such as member voting power, financial obligations and day-to-day functions. The intricate nature of an LLC operating agreement may also protect the business from future confusion or even legal disagreements.

Get an Employer Identification Number (EIN)

An EIN, sometimes called a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), is required for most businesses. Though single-member LLCs are noteworthy exceptions, EINs are still ideal for protecting one’s privacy and guarding against identity theft and fraud. They are free and easy to obtain at the IRS website.

Submit an Annual Report

LLCs must complete and turn in a report annually between February and May. The accompanying filing fee is $50; there is an additional $2.50 fee to file online. After June 1, the state charges a $25 penalty. The online filing charge also rises to $3.

Pay the Corporate Tax, if Applicable

Typically, LLCs are taxed differently from corporations. As pass-through entities, LLCs get handled as part of one’s personal tax obligations. However, if you treat your LLC as a corporation for tax purposes, you are responsible for paying the required Rhode Island Minimum Business Corporation Tax. In which case, expect to pay at least $400 each year.

Make sure all the information in your LLC filing paperwork is accurate and complete. Should you complete the process and realize at least one item is wrong, immediately make corrections by submitting a Certificate of Correction, which costs $50.

There are a few reasons you may want to dissolve an LLC. For instance, if you want to establish an LLC elsewhere, not as a foreign entity but as a domestic one. Perhaps you simply wish to stop operating your LLC but do not want to transfer ownership. Before dissolution, make sure all financial obligations get settled and taxes paid before proceeding with a dissolution request.

After you confirm everything is in order, complete your Articles of Dissolution form to close your business for good and pay the $50 filing fee.