People who are starting out in business often choose an LLC as the structure for their venture. This is largely due to the convenience of such a legal organization and the many advantages it offers. If you are interested in liability protection, the possibility of pass-through taxation, and the ease of registering a company, then you should definitely consider establishing an LLC in Rhode Island.
Rhode Island is a small state with a high population density. This area is famous for its long coastal zone and attracts businesses related to tourism and recreation to operate here. With all the advantages of the area, aspiring business owners should be prepared for the high cost of living, renting offices, and tax rates. Both state citizens and business owners in the area note this. But if your start-up capital allows, this state has a lot to offer you!
If you've made the decision to do business in this state, you probably want to know how to start an LLC in Rhode Island. We've created an article that will walk you through all the steps necessary to become a successful business owner in this state.
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When we think about forming an LLC in Rhode Island, we expect to face a lot of red tape, legal terminology, and paperwork. Well, here's the good news: in 2022, the LLC formation process in Rhode Island is really quite simple. That's because you can fill out and submit almost all of the paperwork from the comfort of your own home using the Internet.
We offer you step-by-step instructions that will give you the best understanding of the procedure. Let's get started on the first step right away!
The first step is to choose a name for your company, and it is one of the most difficult things you should do on your way to a successful business in the United States.
That's all because the state requires you to comply with a pretty extensive list of criteria for selecting a name. If you violate even one of the points (which we will describe below), your LLC will not be able to exist in the state, and its registration will be immediately denied. We advise you to carefully study each requirement so that you do not have to re-file documents and waste your time in case you make a mistake.
So, you've chosen a name for the company and made sure it's unique. However, you're not ready to start applying for LLC formation right away and want to put the process off for a while. Given the constant growth of companies in the state, you may be afraid that someone else might snatch up the name you've chosen. Don't worry and just reserve that name for some time. In this way, no one will be able to hijack the name because it will already be assigned to you.
Reservation of the name for LLC is given for no more than 120 days. It will cost you $50. You can apply for an LLC name reservation online or send it by regular mail.
If you choose not to spend a lot of time and apply online, download and fill out the form on the Secretary of State's website.
But if you prefer traditional mail, send the completed form to this address:
Office of the Secret of State
148 W. River Street
Providence, Rhode Island 02904-2615
In 2022, it's hard to imagine a modern company that doesn't have a website and brand page on social media. This helps attract new customers through organic traffic and successful marketing campaigns.
While choosing a name for your LLC, do a social media search. Your company nickname may already be occupied by someone else, and you'll have to think of variations.
Do the same work with finding domain names that match your company name. You probably plan to build a website that will increase your company's ranking in the eyes of the customers. Overall, it will be much easier for your clients to find your site if its URL is the same as your business name. So, double-check if the domain name is free and buy it at once if it is available.
If you ask the experts how to start an LLC in Rhode Island, they will tell you to appoint a registered agent at the beginning of the process. Obtaining the consent of the resident agent is a prerequisite for successful company registration. This requirement is imposed by the Secretaries of all States in the U.S. Let's learn more about the nuances of a registered agent's work and where to find one for your company.
This person or company does an essential job on your behalf: he/she receives business correspondence from state representatives and other people interested in your business. This work is simple but very important and responsible.
If an agent misses an important notice, you run the risk of ending up in an unpleasant situation. For example, if a lawsuit is filed against your LLC and a trial is scheduled, the judge or his/her assistants will certainly notify your agent of the situation. If you don't show up for a court session, you may lose the case for that reason alone. After all, you may not even be able to provide a legal defense for your company due to your absence.
You may also fail to notice your client's complaint. If you don't respond immediately, you could seriously tarnish the image of your LLC in Rhode Island. But what could be worse? Well, the only thing worse is missing important notifications from the state authorities. In that case, you may lose your business altogether.
As you can see, a statutory agent does a small but important job of allowing your company to operate in a regulated manner.
We are going to tell you how to found an LLC in Rhode Island and choose a resident agent. Any US citizen can become a statutory agent. The main thing is that this person needs to be at least 18 years old and have a physical address in the state. This individual should be available 5 days a week during business hours except for public holidays. So, who can perform these tasks for your LLC?
As we mentioned above, the decision to be an agent has many disadvantages. Let's talk more about each of them.
So, all of the above facts are crucial. Are you ready to take the responsibility yourself? It's up to you!
Since there are many disadvantages to doing the statutory agent tasks yourself, we offer you another option. Ask statutory agent service providers for help.
There are many companies in the market that provide this kind of service. You can easily find a contractor according to your requirements and budget. Also, LLC formation services often include agent's help in their packages for setting up an LLC for the first year for free. This is a good opportunity to save money.
If you order the service separately, for as little as $70 to $150 per year, you will be able to outsource the agent's tasks to specialists. In doing so, you will be able to focus your attention on the tasks in the business that cannot be delegated but still keep your hand on the pulse.
The next step is to file your foundation documents. When this application is reviewed and approved by the Secretary of State, you will be able to legally start a business in this area. Of course, this will not be the endpoint on your journey to a business that meets all state requirements. But your company will already be registered with the state.
Although the Articles of Organization is the most important document for your company, it is fairly short and won't take you long to fill out (if you have already completed the previous two steps described in this article).
Visit the Secretary of State's website and find Form 400 there. You can find this form in the "Business Services Online Filing System" section. The site is very user-friendly, and you will easily find everything you need there. By completing and submitting this form, you will be able to start a business in Rhode Island.
We want to provide the most comprehensive details on how to register an LLC in RI, so we offer a checklist of information you'll need to provide to the Secretary of State in your Articles of Organization:
You can file Articles of Organization online at the Secretary of State's website or by mail. Along with your document, you will need to enclose a check for the state fee of $150.
If you're afraid to take on the responsibility of filing Articles of Organization yourself, you can easily find help on the legal services market. Here are a few options for cooperation:
This document is internal and does not need to be filed with the state. However, we advise you not to ignore the Operating Agreement preparation or downplay its importance. In fact, this paper contains the rules by which your LLC operates. If any disputes arise in the future within the management team/participants of the LLC, thanks to this document, you will be able to resolve them easily.
You can fill in any information that is important to you in this document. There are many examples of Operating Agreement forms on the Internet, and you can use one of them. Also, attorneys offer their help in drawing up such a document. Professionals can help you include important information and rules that will work perfectly for your business.
Here is the information you should include in the Operating Agreement:
LLC formation services can also guide you through the Operating Agreement drafting process. Usually, there is an additional charge for such assistance.
We also suggest you distribute copies of this document to all members of the LLC management team so they have copies on hand at all times.
So, now you know how to form an LLC in Rhode Island. If the Secretary of State has approved your Articles of Organization, your company is already registered. But you are not at the end of your journey, and there are a few more steps you need to take to get there.
One of those steps is to obtain an Employer Identification Number (EIN). If you are not sure if you need an EIN, ask yourself two questions:
If you answered yes to any of these questions, go to the IRS website to complete the Rhode Island LLC formation process.
The IRS gives you this 9-digit code to have more control over your tax returns.
You need the EIN:
Many LLC formation services offer you an EIN for a fee. You should cancel this service because it does not cost you a cent to get an EIN online. Moreover, it's faster than having a cup of coffee.
As we have mentioned before, forming an LLC in Rhode Island is quite an expensive process compared to some other states. So, how much does an LLC cost in RI? Let's do the math!
Your major expense when setting up an LLC in Rhode Island is the fee for reviewing your Articles of Organization. In this state, you have to pay $150 for this.
Additional expenses include:
So, all the basic steps involved in creating an LLC in Rhode Island are behind you, and you can call yourself a business owner. But you're just at the beginning of the journey. You still have a lot of work to do.
In order to keep the corporate veil intact and maintain limited liability protection, we recommend opening a separate bank account for your business. This way, your assets will be segregated, and you can be assured that in the event of a lawsuit or company debt, your assets will not suffer. Moreover, this way, it makes it easier for an accountant to keep track of business profits and losses.
No one is immune to emergencies. Your choice of insurance depends on the nature of your business. Contact a professional insurance agent, and s/he will help you choose the type of insurance that offers the most protection for your LLC in Rhode Island.
After creating an LLC in Rhode Island, you need to ensure its smooth operation. To do this, keep your company compliant.
Here are the steps you'll need to take to do so:
Now you know how to start an LLC in Rhode Island. It is not a complicated process if you follow the steps outlined in this article in order. Pay special attention to filling out the Articles of Organization. This is the main document for your business. If you fill it out correctly, you will have no problem registering your company, and the Secretary of State will quickly approve your application.
If you need help, contact lawyers or LLC formation companies who will definitely make the process easier. This way, you can be sure that everything is done correctly according to the requirements.
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.