How To Start a Rhode Island LLC

I also like to review what Rhode Island is known for and pull out the best business ideas based on that. The top business ideas in Rhode Island are:

1. Start a silverware making business
2. Start a fine jewelry selling business
3. Start a beach touring business

There are so many options for the smallest state in our union but I would recommend really considering what your passion is if you live in Rhode Island and are looking for an amazing opportunity.

Once you’ve figured out what you are going to do for your business, it’s time to make sure you can lock down your business name for your LLC in Rhode Island.

Name Your Rhode Island LLC

One of the first steps (and most important) is going to be naming your Rhode Island LLC by following the rules for the Rhode Island Secretary of State’s office.

The Rhode Island naming requirements are

• The name of your LLC must contain the phrase “Limited Liability Company” or the abbreviation “L.L.C.”
• The name cannot be deceptively similar to any other business on file with the State of Rhode Island
• The name must be available for use – you can check this by searching the RI Secretary of State website
• Your LLC name must not be in use by another business
• The name cannot imply that your LLC is organized for a purpose that it is not

Now that you have an idea of what the Rhode Island Secretary of State’s office is looking for, you can start brainstorming LLC names. If you’re having trouble coming up with names there is always the use of the business name generator that TRUiC has put together that is fantastic.

You will need to go check with the Rhode Island SOS team to determine if your name is officially available.

Here is the portal to search:

https://business.sos.ri.gov/CorpWeb/CorpSearch/CorpSearch.aspx

After you’ve locked in on your Rhode Island business name, it’s time to make sure you get the digital version too.

Get a Website Domain for Your Rhode Island Limited Liability Company

I tell people getting a website is more important than your physical street address. By having a website where you’re going to conduct business for your business entity – you’ll be more professional than most by setting it up this way. Use GoDaddy to figure out the available domains and do your best to get the .com domain for your business name. Once you’ve done that, you’ll be able to move onto setting up your registered agent.

Choose your registered agent

A registered agent or registered agent service is one of the most important pieces of any LLC formation that you’re going to setup. You can act as your own registered agent if you’d like but it’s not recommended.

The typical rules of any registered agent are:

• The registered agent must have a physical address in Rhode Island
• The registered agent must be available during business hours
• The registered agent may not be the LLC itself

Now that you know the three simple rules for a Rhode Island registered agent, you’re ready to start looking for one. The first place I would look is with our partner Northwest Registered Agent. They will give you the first year included of this service with your LLC formation. As a Rhode Island resident agent (registered agent) service – you’re going to find they are the best solution for you.

It is possible to find a Rhode Island law firm that has done this too but typically I find that using a professional service for LLC owners that also acts as a LLC formation service is the best way for small businesses to go.

Prepare and File Articles of Organization

The next step of the Rhode Island LLC formation process is to prepare and file your Articles of Organization with the Secretary of State office. You can do this yourself or have a service like Northwest Registered Agent do it for you. It’s going to cost you $150 to file this document if you’re doing it on your own.

The contents of the Articles of Organization for your Rhode Island LLC must contain

• The name and address of your LLC
• The names and addresses of the members (owners) of your LLC
• The date when the LLC will dissolve (if it’s not going to be perpetual)

While this is the standard, you may find that some LLC formation services will include additional information. If you’re using a service like Northwest, they will prepare this document for you and then file it with the state on your behalf.

Once you’ve done this, it’s time to move onto my favorite part of this entire LLC process which is operating agreements.

Create an operating agreement

An operating agreement is a powerful legal document that can help protect your personal assets if done correctly. It’s also there to help your LLC members and the business entity understand the details of the business.

I would recommend having a professional service like Northwest Registered Agent prepare this document for you. If you’re going to do it on your own, make sure you use their free operating agreement template builder. It will help you put together a custom LLC operating agreement for your business in Rhode Island.

The typical items that are in an operating agreement are:

• The LLC name and address
• The names of the members
• The management style of the LLC
• How profits and losses will be distributed
• What happens when a member leaves the LLC
• Buyout provisions
• Voting rights
• And much more…

These are just some of the items that I would recommend including but you can also get a template from Legal Templates or you can use an LLC formation service to help you with it. I love the use of it if you put funds in upfront as a business owner and are looking to have a comprehensive operating agreement that will offer personal asset protection and protect your business assets too.

After you’ve set this up for your existing business, it’s time to move in to getting a employer identification number.

Get an EIN for your Rhode Island LLC

The next step in the Rhode Island LLC formation process is to get an employer identification number (EIN) for your business. This is a nine digit number that is assigned by the IRS and it’s used to identify your business for tax purposes.

You can get your EIN by going to their website and filling out the online application. The application is here: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

The Internal Revenue Service is one of the most important groups that you’ll need to follow rules around. They don’t care as much of the business structure you choose but they do really care about making sure your Rhode Island LLC EIN is setup the right way.

This number acts as a social security number for your business. It helps you make sure you’re able to track sales tax, important tax forms, business debts, hire employees and much more. It’s the first step to getting a business bank account so once you’ve gotten your Federal Tax Identification Number, it’s time to go setup your bank account.

Open A Business Bank Account

You’ll need to get a business bank account setup and the easiest thing to do is setup one with Lili. It’s one of the fastest banks and you can file online so it makes life a lot easier than going into a local bank. They are not a government agency and most banks are not but they will help you with your individual or business entity whether you have an operating agreement or not.

Once you’ve done this as a sole proprietorship, Foreign LLC or if you’re just using it for your Limited Liability Company – you’ll be ready to and starting to operate your business as you’d like.

Get Small Business Insurance

After you’ve gotten your Rhode Island Secretary of State’s office organized and comfortable with your business, you’ll need to determine what type of insurance you’re going to need.

I recommend going to CommercialInsurance.net to help you determine what type of business insurance you’re going to need.

You’ll want to get insurance to protect your business, yourself, your family and anything else associated with the business.

There are countless types of insurance but I’ll recommend a few that are important for any business.

• Business Owner’s Policy – This will help you insure your business for property damage, theft, liability and much more.
• Product Liability Insurance – If you’re selling a product, you’ll want to make sure that it’s covered in case someone is injured by it.
• Professional Liability Insurance – If you’re offering a service, you’ll want to make sure that you’re protected in case something goes wrong.

These are just a few of the types of insurance that you should consider for your business. There are many more and you can speak to an insurance agent to determine what’s best for you.

Get a Business License

You will need to get a business license for your Rhode Island LLC. The process is relatively simple and you can find the forms here: http://www.dob.ri.gov/licenses/business-license/

The forms that you’ll need to fill out are the Business License Application, the Certificate of Good Standing (if applicable) and the Business Personal Property Tax Return (if applicable).

You’ll need to submit these forms along with the appropriate fee to the Rhode Island Department of Business Regulation. The mailing address is:

Division of Business Regulation

1511 Pontiac Avenue

Cranston, RI 02920

You can also submit your forms online through the Business Filings Portal.

The processing time for your application is typically within 2-3 weeks.

Now that you’ve figured out what type of business licenses you’re going to need for your business – you’re really close to getting started!

File an Annual Report

All businesses in Rhode Island are required to file an annual report with the Secretary of State’s office. The report is due by June 1st and can be filed online or by mail.

The report must include the name and address of the LLC, the names and addresses of the managers or members, and the LLC’s registered agent.

The report must be accompanied by a filing fee of $150.

You can find the annual report form here: http://sos.ri.gov/documents/business/llc/annualreport.pdf

Pay Annual Taxes

The Rhode Island Division of Taxation collects annual taxes for all businesses in the state. The taxes are due on April 15th and can be paid online or by mail.

The tax rates are as follows:

– $500 for LLCs with gross receipts of less than $100,000

– $1,000 for LLCs with gross receipts of $100,000 or more

– $2,500 for LLCs with gross receipts of $1 million or more

You can find the tax forms here: http://www.tax.ri.gov/forms/2011/2011_business_corp.pdf

Conclusion

The process is pretty straight forward once you know the steps to follow but as someone who has done this a few times, the easiest thing to do is get help from Northwest Registered Agent. After you’ve done this go get your local business licenses, setup a business credit card and if you need to – consider the small business loan program too.

You’re now ready to go once you’ve gotten everything setup and the Rhode Island Secretary of State’s office validates that you have a new Limited Liability Company that can operate in the state of Rhode Island. Congrats and get going to fill your dreams!

FAQs

How much does it cost to start an LLC in Rhode Island?

The filing fee to start an LLC in Rhode Island is $150. You can also expect to pay a yearly LLC tax of $500, which is due by June 1st.

Is there a minimum amount of money required to start an LLC in Rhode Island?

No, there is no minimum amount of money required to start an LLC in Rhode Island.