Rhode Island LLC Startup Guide

Have you ever thought of creating a limited liability company (LLC)? If you’re a first-time entrepreneur in the Ocean State, then consider starting a Rhode Island LLC. Business is booming in Rhode Island, especially in industries like healthcare, financial services, and data analytics. New incentives launched by the state make now a particularly attractive time to form a business in Rhode Island. And doing business as an LLC in Rhode Island can offer you a variety of advantages that we’ll discuss below.

Forming a Rhode Island LLC can be as straightforward as a drive down Millionaire Row as long as you have the right guide. If you want to ensure that you get the full tax and personal liability protection of an LLC, you’ll need to form your business correctly. Trying to make sense of complicated rules and legal documents on your own can be like trying to get home from Block Island after you’ve missed the last ferry. Read on to find out how we can help you register an LLC in Rhode Island.

How to Start an LLC in Rhode Island

You can only enjoy the benefits of an LLC if you form it correctly. In this guide, we’ll walk you through the precise steps you’ll need to follow to set up a compliant business. Please note: these steps are for starting a domestic, for-profit LLC in Rhode Island. If you want to start a foreign LLC (formed outside of Rhode Island), then you’ll need to follow different steps.

1. Name your Rhode Island LLC
2. Choose a resident agent in Rhode Island
3. File Rhode Island Articles of Organization
4. Create a Rhode Island operating agreement
5. Apply for an EIN
6. File your LLC’s BOI report

Form a RI limited liability company in 6 steps

Once you’ve decided on starting an LLC, Rhode Island has some basic filing rules you’ll need to follow. Before you do anything, you’ll want to collect all the required information so you won’t be scrambling as you start the process. Since LLCs need to register with the Rhode Island Secretary of State, you’ll first want to know some essential business formation steps. We’ll discuss all six below.

Step 1: Name your Rhode Island LLC

Choose a name for your LLC in Rhode Island. As you begin forming an LLC, think carefully about what your name will be. This LLC name will be your business’s identity, so it should be unique and memorable. If you need some inspiration, we have an article that can help you come up with a great business name.

Rhode Island Business Name Rules

The Secretary of State has some basic rules for naming your business:

• The name must include one of the following designators indicating that it’s an LLC: “limited liability company,” “LLC,” or “L.L.C.” Lowercase letters will also work.
  
• The name can’t imply an affiliation with a government agency or entity.
  
• The name must be distinguishable from the names of other LLCs, corporations, and limited partnerships registered with the state. For example, intentional misspellings of the same word (Girls vs. Girlz) won’t do.
  

Review the Secretary of State’s “Name Availability Guidelines” page before coming up with a list of names. Being well-informed and well-prepared is the best way to start an LLC in RI.

Search RI LLC business names

Before you choose a name, perform a Rhode Island business entity search. This way, you can make sure that the name you want isn’t taken. When you start a Rhode Island LLC, your business has to have a name that is unique from all others; otherwise, your formation documents will be rejected. The Secretary of State’s website has a search tool that you can use, or you can use our Rhode Island business search page for guidance.

On a similar note, you should conduct a similar search with the United States Patent and Trademark Office. That will help you make sure you don’t infringe on any federally protected trademarks. Trademarks also exist at the state level, so visit the Rhode Island Secretary of State’s trademarks page to search for existing trademarks or get one of your own.

If you do determine that your desired name is available, you can protect it while you get things up and running. Rhode Island’s Application for Reservation of Entity Name will give you 120 days of name protection. Note: this only grants protection at the state level. If you want more robust protections, you’ll need to look into registering a trademark.

Other Naming Considerations

Ideally, your business name should match (or closely mirror) your website. After all, an online presence is an asset in today’s market, and you want it to be easy for your customers to find you online. The same goes for social media handles, too. If you need help with this, our domain registration service can help you.

If you’d like to use a nickname that’s different from your business’s legal name, you’d need to register a DBA, or a “doing business as” name (see DBA definition). Technically, in Rhode Island, a DBA is called a fictitious business name. We can help you register one.

Step 2: Choose a resident agent in Rhode Island

Name a resident agent for your LLC. This person or entity is more commonly referred to as a “registered agent (For more information, please see our what is a registered agent page).” They can also be referred to as a “statutory agent” or “agent for service of process.” This agent’s responsibility is to receive legal notices and other official forms of communication on behalf of a business. Rhode Island requires all LLCs to have a resident agent.

Rhode Island Registered Agent Requirements

The state has a few specific regulations for who can be a Rhode Island resident agent. Essentially, the agent must:

• Be an individual Rhode Island resident (at least 18 years old) OR a domestic business entity with the authority to do business in Rhode Island.
• Have a physical address (called the registered address/registered office). P.O. boxes aren’t permitted.
• Be present at the registered agent address during all normal business hours.

Under those criteria, you can serve as your own registered agent, have a friend or family member fill the role for you, or hire a third-party registered agent. 

Recommended: Hire a Registered Agent Service

Generally, we recommend that new business owners hire a registered agent service to fill this role. That’s for several reasons. First and foremost, you don’t want to feel tied down to a specific address every single day; you probably have errands to run, vacations to take, and more. It’s a lot to ask that of a loved one, too. 

But more importantly, there are potential consequences if a process server can’t find your registered agent. You could face state penalties like fines or administrative dissolution. But on a more practical level, you’d run the risk of not knowing about a lawsuit against you, losing the opportunity to defend yourself in court. 

Finally, if you serve as your own registered agent, the process server will come to you directly and inform you that you’re being sued. This notice might happen while you’re with a client or an employee — not the kind of embarrassment you want to deal with. Registered agent services can help fix all these problems. If you’d like to hire an agent, our registered agent service can fill this role for you quickly and easily.

Step 3: File Rhode Island Articles of Organization

Complete and file your Articles of Organization (Form 400) with the Secretary of State. We know that filing any sort of government paperwork or legal forms can be a bit intimidating. That’s why we offer business formation plans to help you get your paperwork done correctly.

We can also serve as your LLC’s organizer. The organizer is the person responsible for completing and signing the form, whether it’s you, an attorney, a business formation service, etc. Although we can handle your formation for you, let’s go over the process below.

Information Needed for Rhode Island Articles of Organization

It’s important to have all the necessary information in your Articles of Organization. If anything is incorrect or missing, then the Secretary of State will reject the documents. You’ll need to include the following information:

• Your business’s name and the industry it’ll be in
  
• The contact information and street address of your resident agent
• Your LLC’s federal tax status. Your Rhode Island Articles of Organization must include your LLC’s federal tax election. According to Rhode Island’s Articles of Organization form, your LLC can be taxed as a RI corporation, a partnership, or “disregarded as an entity separate from its member.”
• Address of LLC’s principal office
  
• The names and addresses of each member
  
• If members or managers will manage the LLC
  
• The LLC’s tax designation (partnership, corporation, or disregarded entity)
  
• The LLC’s effective date
  

Filing Articles of Organization

Rhode Island offers pretty straightforward methods for filing your Articles of Organization. You can do it online by going to the “Start Your Rhode Island Business” page on the Secretary of State’s website. You’ll see a list of different formation documents. Choose the LLC, click to file online, and follow the instructions. 

To file by mail, you’ll go to that same webpage. Instead of filing online, you’ll choose the filing by paper option. You can print the Articles of Organization, fill them out, and mail them to the Rhode Island Secretary of State. For both methods, you’ll have to pay a fee. The processing time is about one to three business days. You can also use our expedited filing service. While this doesn’t impact how quickly the state will process your documents, it helps us prioritize your Rhode Island LLC.

Why would I delay my Rhode Island LLC’s filing date?

If you’re starting your new company toward the end of the year, you may want to consider setting your LLC filing date on or after January 1 of the coming year. This can spare your business the hassle of filing taxes for only a short period of the current year, particularly if you don’t anticipate sales or other business activity. It could also prevent you from filing an annual report quite as soon, as Rhode Island requires you to file one in the calendar year after your LLC is formed. 

Rhode Island allows you to delay your filing up to 90 days. From October through January, we offer delayed filing services to help with this.

What if I need to make changes?

Keep in mind that you only have to file your Articles of Organization once. If you make any changes to the business later on, like changing your resident agent or adding a new member, then you’ll need to file Articles of Amendment (Form 401). If you need help amending your Articles of Organization, then check out our amendment filing service. It can take care of the hassle for you. Be sure to also look into our Worry-Free Compliance service. With it, you’ll get two amendment filings each year.

Step 4: Create a Rhode Island operating agreement

Draft a Rhode Island operating agreement for your LLC. An Rhode Island operating agreement spells out your LLC’s rules for operation and ownership details. While this agreement isn’t required by law, nor do you need to file it with the Rhode Island Department of State, it’s a terrific governance tool for your small business. Without an operating agreement, your LLC will be subject to the state’s default LLC rules.

Benefits of RI LLC Operating Agreements

Perhaps the largest benefit of an operating agreement (OA) is customizing your business’s rules and procedures to serve your LLC’s interests, requirements, and expectations. What other benefits are there to having one? Let’s go over a few:

• It can prevent and resolve conflicts between the LLC’s members by listing each’s powers and privileges. It also clearly delineates how profits are distributed.
  
• It outlines the LLC’s management structure via a member-managed or manager-managed option. You’ll first choose the company’s management type in the Articles of Organization.
  
• It can further separate your business’s assets from your personal assets. The LLC model already does this by default, but an operating agreement can further shelter your assets from legal liability.
  
• It can specify the rules and procedures to add or remove members from the business.
  
• It can create a clear succession plan for the business as a whole or an ownership portion if a member retires, leaves, becomes incapacitated, or dies. This can also be beneficial for a single-member LLC.
  

This isn’t an exhaustive list of all the benefits of having a written agreement in place. As you prepare your LLC, you’ll surely find other items that you’ll want to include in your company’s governance materials. A formal written agreement is a terrific tool to do that.

Do I need an operating agreement even if I’m the only owner? 

Even if you’re a single-member LLC, it’s highly recommended to draft a formal agreement. You never know how your business will grow down the line, and an agreement can help set the foundation for future success. Plus, investors and business partners might ask to see your agreement before they’ll team up.

Most importantly, a written agreement helps prove that you’re treating the business structure as a separate legal entity, helping guarantee that your limited liability protection stays in place.

If you’re unsure of how to create an agreement, we offer a customizable template to help you.

Step 5: Apply for an EIN

Get an Employer Identification Number (EIN) with the IRS. This number is also known as a Federal Employer Identification Number (FEIN) and a Federal Tax Identification Number. An EIN is like a Social Security number for your business, allowing your LLC to hire employees, apply for a business bank account, and pay taxes. And, like a Social Security number, it helps the government identify your business during tax time. 

Most LLCs need an EIN, especially those with multiple members or employees. You can get your LLC’s EIN through the IRS website, by mail, or by fax. We can also get one for you with our EIN Service.

Register for RI Business Taxes

You’ll need to register your business with the state’s Division of Taxation website. Once you do this, you should be able to see which classifications and forms may apply to you. Depending on your taxation structure (more on this in a moment), you might be responsible for the Rhode Island corporate income tax (7%) or the personal income tax rate (ranging from 3.75% to 5.99%). As an employer, you’ll need to register for employer tax.

You’ll also need to register for sales and excise taxes, payroll taxes, and withholding taxes. Visit the Division of Taxation’s “Resources for Businesses” page for more info on business taxes in Rhode Island.

Can filing as an S corp lower my taxes? 

LLCs are very flexible in terms of their tax treatment. By default, LLCs avoid the double taxation of C corporations because they’re taxed like pass-through entities. The members pay taxes on their personal income tax returns instead of the LLC paying at the business level. Often, this results in a lower tax burden.

That said, in some cases, electing S corporation status (or even C corporation status) can result in a lower tax burden. That’s because these business structures can sometimes get breaks on self-employment taxes and take advantage of deductions exclusive to corporations.

If you’re considering electing a different tax structure, we highly recommend chatting with a tax attorney. They’ll walk you through the pros and cons of this decision as they apply to your unique tax situation.

Open a business bank account for your LLC

After you’ve secured your LLC’s EIN, consider opening a bank account for your business entity. You may think that using your personal bank account should suffice in handling your business finances, but reconsider. Having accounts that separate your personal and business banking is important for sorting your finances come tax season. It can additionally protect you from liability since you won’t have to worry about mixing your personal and business funds.

When you’re ready, we offer a discounted bank account service. You’ll get unlimited transactions, a debit card, online banking features, and more. If you’d like to authorize someone else in the business to use the bank account, then look into our banking resolution template.

For more help managing your business’s finances, check out Money Pro. This tool helps you receive payments, track expenses and revenue, create custom invoices, and more, all in one place.

Step 6: Submit your LLC’s beneficial ownership information report

In the beginning of 2024, the Corporate Transparency Act went into effect, introducing a new requirement for LLCs: submitting a beneficial ownership information report, or BOI report. A BOI report is designed to give information about your LLC’s beneficial owners to the Financial Crimes Enforcement Network (FinCEN). According to the act, a beneficial owner is anyone who owns 25% or more of your ownership interest, gets substantial economic benefit from your business assets, or exerts significant control over it. 

By asking for this information, FinCEN hopes to deter certain financial crimes like money laundering by making it harder for groups to use shell companies to hide illicit activities. Because of this importance, there are severe civil and criminal penalties for failing to file. 

You can file your BOI report online with FinCEN or upload a PDF version of the form; either option is free. Just be sure to file on time. If you form your LLC during 2024, you have up to 90 days after Rhode Island approves your Articles of Organization to submit the BOI report. That timeline drops to just 30 days for LLCs that organize in 2025 and beyond. For LLCs that started before 2024, the due date is January 1, 2025. 

Check out FinCEN’s website if you’d like to learn more about the BOI report. And if you’d like help with the filing process, our BOI report filing service has you covered.

Important Steps After Forming an LLC

After you’ve submitted your formation documents, there’ll likely be a few more things to do to ensure your business runs smoothly. Here are a few to consider. 

Hiring a Business Accountant

Keeping track of your business’s finances is a big priority. You may very well need help managing this oftentimes difficult task. As we detailed above, you can rule your finances with Money Pro. 

Getting Business Insurance

Although the LLC model offers limited liability, your business may need additional forms of coverage. Where should you start, and which types of business insurance should you look for? There are countless insurance companies out there with competitive rates and plans, so you’ll need to do some research to find what you need. You can start looking at general liability insurance and go from there. Don’t be afraid to get quotes and ask questions about what exactly you’ll get with coverage. 

Creating a Business Website

We discussed getting a domain name earlier, which you’ll do in order to have a business website. This website can help you grow your online identity. People will more than likely look up your business address, hours of operation, phone number, and more online. A website can also help you market your brand and conduct business online. We offer a business website service so you can give your business a digital identity. 

File your Rhode Island LLC annual report

In Rhode Island, you must file an annual report for your LLC with the Secretary of State. You can do so through the Secretary’s website or by mail. You’ll need to file this report between February 1 and May 1 for a fee. There’s also a fee for late filings. We offer an annual report service so you won’t have to worry about late filings.

More Information on Rhode Island LLCs

The following is some additional information to consider regarding your Rhode Island LLC. 

Understanding the Different Types of Rhode Island LLCs

There are actually several different types of LLCs you can form in the state. All of these LLCs are pretty similar, but you’ll want to understand the differences.

• Single-member LLC: A single-member LLC is any LLC that has only one owner (called a member). In that sense, they’re similar to a RI sole proprietorship, but the real advantage is that the LLC has personal asset protection. 
• Multi-member LLC: A multi-member LLC is any LLC that has two or more owners. It’s not unlike a partnership, but it has limited personal liability protection. 
• Domestic LLC: A domestic LLC is any LLC that originated in Rhode Island. It’s native to the state.
• Foreign LLC: Compared to domestic LLCs, foreign LLCs are created in another state, and then they file an Application for Registration to get permission to operate in the state. (Quick note: “foreign” in this context doesn’t mean that the LLC is formed in another country — just another state.)

How to Hire Employees in Rhode Island

There may come a day when your LLC grows large enough to hire employees to join the company’s team of members/managers. Deciding the qualifications and experience needed for a position within the company is essential to creating a candidate pool.

Get with the other members of the LLC, if any, to decide which type of employees you’ll need and how to go about finding them. There are many websites out there to help you find candidates, so check them out. The Secretary of State’s “Business Basics” page has a section on employee information that can also help you. 

How to Get a Certificate of Good Standing

A Certificate of Good Standing, also known as a Certificate of Legal Existence or Certificate of Status, verifies that your LLC is in good standing with the state. It isn’t necessary to conduct business or form your LLC, but it may come in handy to do the following and more:

• Secure funding
• Get business insurance
• Enter contracts with investors or other businesses 
• Renew your licenses and permits

In order to get one, your LLC first has to be officially recognized as a legal business entity in the state and, of course, be in good standing. You can request one online, by phone or mail, and in person. Go to the Secretary of State’s “Order Certificates” page to get one. You can get one for Rhode Island with us, too. Learn more about Certificates of Good Standing.