Starting an LLC in Rhode Island
Rhode Island LLCs (limited liability companies) are business entities that protect their owners from being held personally liable for business debts. By default, LLCs are taxed as pass-through entities and have a flexible management structure. To start an LLC in Rhode Island, you must file Articles of Organization with the Department of State, Business Services Division and pay the $150 filing fee. But first, you need to name your LLC and choose a registered agent. Once the Department of State receives your articles, it will take them about 3-4 business days to process them. Here are the steps you’ll need to take to start your LLC in Rhode Island.
Ready to Start a Rhode Island LLC?
Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your LLC
The first step in forming your LLC is to choose a business name. The rules for naming your Rhode Island LLC are outlined in R.I. Gen. Laws § 7-16-9. Essentially, your LLC’s name must:
- Be “distinguishable” (unique) among existing Rhode Island businesses.
- Contain an identifier such as “limited liability company” or “LLC.”
- Not include words or abbreviations that could make your LLC sound like a different type of entity. For example, “corporation,” “limited partnership,” or “inc.”
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Rhode Island?
Yes. If you’re waiting to form your LLC, you can reserve your chosen business name for up to 120 days. You’ll need to file an Application for Reservation of Entity Name ($50) with the Department of State, Business Services Division.
What’s the difference between my LLC’s name and a fictitious business name?
The legal name of your LLC is the one listed on your Articles of Organization. A fictitious business name (also sometimes called a DBA) is any name your company operates under that’s not the legal name.
Using a fictitious business name can help your company reach a new target audience or sell niche products. For example, Jordan Farms LLC could do business under the fictitious business name “Daisy Mae’s Harvest” to sell food. Using a fictitious business name allows your LLC to operate under a new name without forming a new LLC.
If you choose to use a fictitious business name, you must register the name by filing a Fictitious Business Name Statement with the Department of State, Business Services Division. It costs $50 to file.
2. Designate a Registered Agent
The next step to starting an LLC is to appoint a Rhode Island registered agent. A registered agent (called a “resident agent” in Rhode Island) is someone you appoint to accept important state and legal documents on behalf of your LLC. Rhode Island requires all businesses to maintain a registered agent. In addition, you’ll need to list your registered agent’s name and address on the Articles of Organization.
Learn why the pros use a registered agent service.
What does a registered agent do?
The responsibilities and duties of a registered agent in Rhode Island are outlined in R.I. Gen. Laws § 7-16-11. At a minimum, your registered agent must:
- Have a physical address in Rhode Island. PO boxes are not allowed.
- Accept legal and state mail on your behalf and get it to you quickly.
- Maintain regular business hours.
Can you be your own registered agent in Rhode Island?
Yes. However, acting as your own registered agent means your name and address will be listed on the Articles of Organization—which is a public record. You’ll also have to maintain regular business hours so you can accept legal and state mail in person.
Some business owners find that it’s worth it to hire a registered agent rather than become one. When you do, you won’t have to worry about missing service of process while you’re on vacation (or just out grabbing coffee). A great registered agent will do even more, like providing a business address for you to list on public documents in place of your own and making sure you don’t forget to file your annual report.
Can I change my registered agent after I start an LLC?
Yes. To change your registered agent in Rhode Island, you’ll need to file a Statement of Change of Resident Agent ($20) with the Department of State, Business Services Division.
3. Submit LLC Articles of Organization
To officially form your LLC in Rhode Island, you’ll need to file Articles of Organization with the Department of State, Business Services Division and pay the $150 filing fee. You can submit your Articles of Organization online, by mail, or in person. You’ll be charged an “enhanced access fee” of six bucks if you file online. The state will process your paperwork within 3-4 business days of receiving it, regardless of how you file.
Note: The following information will become part of the public record.
Here’s all the information you’ll need to include:
- Company name. Include an identifier such as “limited liability company” or “LLC.”
- Registered agent information. Enter the name and physical address of whoever will accept legal and state mail on behalf of your LLC.
- Tax designation. Indicate how your LLC will be taxed—as a partnership, corporation, or disregarded entity. Tip: Unless you file paperwork with the IRS to be taxed as a corporation, a single-member LLC is taxed as a disregarded entity and a multi-member LLC is taxed as a partnership.
- Principal address. This must be a street address and will go on the public record.
- Purpose (optional). You may include a specific business purpose or leave this section blank. The form already states your LLC’s purpose as anything lawful.
- Additional provisions (optional). Add anything extra here or skip.
- Management structure. Indicate whether your LLC will be member-managed or manager-managed. If your LLC is manager-managed, you’ll need to list each manager’s name and address.
- Effective date. You may delay the start of your LLC for up to 90 days or select “date received” for your LLC to start immediately.
- Authorized signature. The person filing your articles will list their name and address here. This doesn’t need to be someone within your LLC.
How can I keep my personal information off the public record?
Unfortunately, most of what you’ll file with the Department of State, Business Service Division is public record—which means your Articles of Organization will be readily available online. As a result, marketers will find your address and overwhelm you will junk mail. Then, they’ll sell your personal information to data brokers. It’s a vicious cycle.
The best way to protect your privacy is to hire a professional registered agent who will let you use their address instead of yours (like us). This way, you’ll be able to keep your information off the public record.
What’s the difference between a member-managed and manager-managed LLC?
In a member-managed LLC, the owners (members) are responsible for company decisions such as hiring employees, entering into contracts, and opening bank accounts. A manager-managed LLC gives decision-making powers to one or more elected members or a hired professional.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Rhode Island Articles of Organization?
You can submit your articles online, by mail, or in person.
Mail and in person:
Division of Business Services
148 W. River Street
Providence, Rhode Island 02904-2615
4. Write an LLC Operating Agreement
Your LLC operating agreement is a legal document that acts as a guide for how your business will function. In addition to outlining your LLC’s structure, your operating agreement should cover essentials such as initial investments, voting rules, and how you will resolve internal disputes.
Check out our attorney-drafted Rhode Island LLC Operating Agreement.
Does Rhode Island require an LLC to have an operating agreement?
No. Rhode Island does not have any statutes requiring an LLC to adopt an operating agreement. Per R.I. Gen. Laws § 7-16-2, your operating agreement may be “written or oral.” However, having a strong operating agreement in writing is vital for your business. Your LLC will be subject to Rhode Island’s default LLC statutes without one. Plus, the operating agreement is an internal document, so you won’t need to file it with the Department of State.
What should be included in an operating agreement?
Your operating agreement should cover how your LLC will handle big events such as potential mergers and dissolving the business—should you ever need to. Here is a list of common topics covered by operating agreements:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
- dissolving the business
You can include pretty much anything in your operating agreement as long as you don’t violate the Articles of Organization or state laws.
Does a single-member LLC need an operating agreement?
Yes. Although you probably won’t need to resolve any disagreements with yourself, most banks will require an operating agreement to establish a business bank account. Plus, having a solid operating agreement will help maintain your LLC’s liability protection.
5. Get an EIN
An employer identification number (EIN) is like a social security number for your LLC. The IRS assigns the nine-digit, unique number and is used to identify your business on tax filings. You can get a free EIN through the IRS website or file a paper form.
Do I need an EIN for my Rhode Island LLC?
Yes. Although you technically won’t need an EIN unless you’re taxed as a corporation or choose to hire employees, most banks require an EIN to open a business bank account. Having an EIN also prevents you from giving vendors your social security number.
What To Do After Forming Your Rhode Island LLC
6. Open a Bank Account
You’ll need a business bank account to separate your personal and company finances. Why, you ask? LLCs are considered distinct entities from their owners—meaning you won’t be personally responsible for any business-related debts and obligations. However, mixing your business and personal money could put this protection at risk.
To open a bank account for your Rhode Island LLC, you’ll need to provide your bank with the following:
- Rhode Island LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.
7. Fund the LLC
Okay, you formed your LLC and established a bank account. Now, it’s time to fund it. Members typically make an initial contribution to pay for their membership interest. Initial contributions are often made by writing a check or depositing cash into the business’s bank account. But members may also choose to contribute property or services. However, keep in mind that these types of contributions can trigger tax events.
What is LLC membership interest?
Membership interest is the percentage of ownership you have in the LLC. Typically, membership interest is equal to each member’s initial contribution. For example, if you invest $6,000 into the LLC and your partner invests $4,000, you will own 60% of the business while your partner will own 40%. Members with larger contributions typically have greater voting power, but you can establish another arrangement in your operating agreement.
8. File State Reports & Taxes
Rhode Island requires all LLCs to file an annual report with the Department of State, Business Services Division and pay a $50 filing fee. You may file online, by mail, or in person.
Don’t want to worry about deadlines? Let us file your annual report for you.
When is the Rhode Island Annual Report due?
The Rhode Island LLC annual report is due between February 1 and May 1. If you file it after May 31, your report will be considered late and could result in a $25 penalty fee. If you never file it, your LLC could be administratively dissolved.
How are Rhode Island LLCs taxed?
LLCs in Rhode Island are (by default) taxed as pass-through entities—which means business profits are distributed to members, who report their earnings on their personal tax filings. The LLC’s gains are also subject to the federal self-employment tax rate of 15.3%). You can elect to be taxed as an S-corp or C-corp by filing paperwork with the IRS.
Learn more about S-Corp Vs LLC tax designation.
