Forming an LLC (Limited Liability Company) in Rhode Island is easy and affordable. The following are few procedural steps on how to start an LLC in Rhode Island. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Rhode Island, visit How to Start an LLC.
On this page, you’ll learn about the following:
- Why an LLC in Rhode Island
- How to Start a Rhode Island LLC
- After Starting your Rhode Island LLC
- Best Businesses that are Operating in Rhode Island
Why an LLC in Rhode Island
If you will look at Rhode Island’s insights, then it is one of the smallest states in the USA but has large opportunities for businesses. Industries are established in the state and are thriving well due to the business environment and incentives offered. So, if you are also willing to start an LLC in Rhode Island, then here are some of the benefits the state government is offering to their LLC start-ups.
Incentives for Small Businesses
Any new Rhode Island LLC that is starting up as a small business will be eligible for plenty of incentives and tax benefits that are provided by various government entities. A glimpse of some of them is shown below.
- Any capital gained by the small business will be excluded from the taxation list for some time so that they can invest more in strengthening their foundation. Also, there are many modifications that are to be made in the structuring of the company for which some amount is to be paid to the government. A business is also exempted from these taxes.
- Some specific activities are listed by the Rhode Island state government and clarify that if the LLCs follow these activities, they will enjoy some tax credit.
Small Business Loan program
In Rhode Island, small businesses are liable for 98.9% of the state’s income. That is why the government started a special loan program named Small Business Loan Fund Program. It ensures that any small business that is looking for leveling up should not miss an opportunity due to a money crisis. The maximum capital one can derive from the loan is $500,000, which is more than sufficient for carrying forward any expansion-related activity.
Innovation Network Matching Grant
The INMG program is designed for LLC in Rhode Island that is medium to small in size. The key industries to whom these grants are provided the healthcare, food and agriculture, life sciences, etc. These businesses are considered essential for running human life, and that is why the incentives are provided to such businesses on the tax they file with the state government.
How to Start a Rhode Island LLC
Suppose you’re planning to invest in some profitable business or maybe about to set up your business in Rhode Island. In that case, forming an LLC in Rhode Island is the simplest option for you.
An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Rhode Island.
Step 1: Decide a Name for Your LLC
If you are to start an LLC in Rhode Island, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Rhode Island business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your Rhode Island LLC.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC?
A name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Rhode Island Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.
- Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
- You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
- As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain
Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.
If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.
Step 2: Assign a Registered Agent in Rhode Island
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in Rhode Island. Choosing Rhode Island-registered agents for your LLC is required.
Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:
These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in Rhode Island. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Rhode Island
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Rhode Island Secretary of State, with a starting fee of $150 to file. You may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Rhode Island, like if it is a member-managed or managers-managed.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Rhode Island LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.
How to File by Mail
If you prefer filing real-life forms for your Indiana LLC registration, then you can download the Rhode Island Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature.
Step 4: Create Your Rhode Island LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
Starting an LLC in Rhode Island does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.
Step 5: Filing a Rhode Island LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business.
It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
After Starting your Rhode Island LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business account
- File Rhode Island business permits & licenses
- Get liability for business insurance with coverage for employees
- File a Rhode Island LLC annual report or biennial report
- Already existing LLCs that wish to operate in Rhode Island must register as a foreign Rhode Island LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Best Businesses that are Operating in Rhode Island
To form an LLC in Rhode Island, it is essential for you to gain complete knowledge of the smallest state’s businesses. Several businesses are well flourished in the state, but only a few have contributed hugely to its GDP. Here is the list of those top 3 businesses
One of Rhode Island’s most prominent players tourism provides jobs to 50,000 people of such a small state. The state’s total contribution to the country is around $5.75 billion, and the reason behind this is the top-class tourism spots in the state. There are many historical monuments in the state with a long 400 miles of seashore.
There is a place named Benefit Street, which is most popular in the state, and people love to stay around that place due to its artistic and intellectual centers.
The textile mills and jewelry businesses of the state are very famous around the country. For a very more extended period of time, the jewelry businesses of the state are also known as the world’s jewelry capital. The jewelry is focused on the inexpensive yet beautiful stones that are procured from the seashore easily.
Other than jewelry, there are some production houses for electrical appliances also in the state. All of these businesses have combined contributed an amount of $4.65 billion to the GDP of the state.
Fishing and Agriculture
Due to the long seashore present in the state, the businesses related to fishing activities are thriving well. There are a vast mackerel market, cod, striped bass, etc. fishes due to its commercial demand. Along with that, the state is also dependent on their agriculture sector for milk, sweet corn, and potato. The overall contribution of both these sectors is around $.12 billion.
Some small businesses that are working goof in the state are:-
- Special cultural food businesses
- Custom jewelry shop
- Fabricated metal products business
Rhode Island LLC Formation Review
Time needed: 1 hour and 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Rhode Island. Click on the steps in this list to read the full detail.
- Name your Rhode Island LLC
The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Choose a registered agent
In Rhode Island, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.
For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.
The cost to form an LLC varies per state.
Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.”
>Do not include words that could create confusion between your LLC and any government business.
>Words like ‘bank, attorney, university’ are restricted as well.
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.
Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.
As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website.
No. Never mail these documents or payments to the Secretary of State directly.
The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents
You are not required a Social Security number when getting an EIN You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
International EIN applicants do not need an SSN to get an EIN.
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