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Rhode Island LLC Cost

You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.

And we’re not talking about renting office space or paying employees — before you sell a single product, there are startup costs associated with launching an LLC in Rhode Island.

Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Rhode Island startup fees here.

Bare Minimum Cost to Start an LLC in Rhode Island

Optional: LLC Name Reservation Fee

    • $50 for online or $52.50 for hard copy filings

Optional: LLC Formation Service

    • $39 for an LLC service like ZenBusiness and $79 for LegalZoom

Required: Articles of Organization Fee

    • $150 for online or hard copy filings (with an additional $6 for online processing)

Overall Rhode Island LLC Formation Costs

LLC Name Reservation Fee

First, you should know that reserving a business name is not required to start an LLC, so this $50 fee is optional. However, if you’ve come up with a perfect name but aren’t ready to get your business going, you might consider reserving it. Filing for a reservation online or by mail will give you a non-renewable 120-day hold on your desired name. On the other hand, if you’re prepped and ready to file your Articles of Organization, do that instead, as it will automatically register your name.

To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.

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Articles of Organization Fee

This is the big one, the most important (and most expensive) form that you’ll file to start your Rhode Island LLC. You can’t begin conducting business in the state until you have the Articles of Organization on file. It’s what officially puts your LLC on record with the state. It’s $156 to file online or $150 with a paper form, but it’s $150 well spent. Plus, you only file the Articles of Organization once, so as long as it’s accepted, you won’t need to pay this fee again.

The information you’ll need to file your Articles of Organization includes the official business name of your LLC, the name and address of your resident agent, an indication that your LLC will be taxed as a partnership, corporation, or disregarded entity, the street address of your LLC’s principal office, additional provisions (if applicable), an indication that your LLC will be managed by its members or a manager, the names and addresses of your LLC’s managers (if you opt for management by a manager), the effective date of your LLC formation, the date, and the name, address, and signature of your LLC’s authorized person.

If you would rather get some help for this step, you’re in luck! There are plenty of reputable LLC formation services that will prepare and file your Articles of Organization on your behalf. You have plenty of options for this service, but we prefer ZenBusiness. They offer great low rates and well-rounded services, and with our exclusive discount code, you can get 20% off!

Business and Professional Licenses

Even with your Articles of Organization on file, your LLC may still require certain professional licenses before doing business in the state. Different types of businesses need to apply for licensure with different state agencies, and license costs vary. A refrigeration mechanic, for example, must apply for a license through the Department of Labor and Training, while a commercial fisher needs one from the Department of Environmental Management.

On top of that, your local city and/or county may have its own set of licensure requirements, so check with the Department of Business Regulation website and your local government to find out which licenses your LLC may need.

What are some of the most commonly required business licenses for Rhode Island LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.

LLC Formation Service

Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an incorporation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.

Most of these services (like ZenBusiness or IncFile) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, operating agreements, and expedited filing.

There are many different companies offering LLC formation services these days, and it can be tricky to tell which one is the right choice for your needs. We think ZenBusiness and IncFile are the two best LLC formation companies, and we wouldn’t hesitate to recommend either of them to our families and friends.

Resident (Registered) Agent Service

Appointing a resident agent is an important part of your LLC formation process. Your resident agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Rhode Island business law. In short, you need an agent you can trust.

While you can be the resident agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A resident agent service ensures that your annual reports and other forms are filed efficiently, saving you from the penalties of delinquent filings and the stress of having to do it yourself.

Not all resident agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to resident agent services, Northwest also handles LLC formation — and they’ll include a resident agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Resident Agent Services guide.

Attorney Fees

If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.

Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2,000.

Cost variations depend on the experience and location of the lawyer, and there are plenty of quality options. So how do you make the right choice? Using a site like Avvo, which provides access to a database of Rhode Island business lawyers, can help you be confident that you’re hiring the right fit for your LLC.

If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in Rhode Island. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.

Foreign Qualification Fee

This only applies if your LLC was formed in another state and is now expanding into Rhode Island. Does this describe your business? If so, don’t worry about the Articles of Organization. Instead, you’ll need to file an “Application for Registration.”

All foreign business entities are required to foreign qualify in Rhode Island, or they could incur some pretty severe penalties. Stay in the Department of State’s good graces by downloading an Application for Registration, filling it out, and mailing it in with a $150 filing fee. Unlike the Articles of Organization, there is no online filing option available for the Application for Registration. Similar to the Articles of Organization, this is a one-time filing and fee, so after it’s accepted, you can forget about paying it again.

LLC Annual Fees

All the fees we’ve discussed up until this point have been one-time payments, startup costs. But LLCs carry recurring maintenance fees as well, primarily the annual report. In order to maintain the most current information on its businesses, the Rhode Island Department of State requires them to file annual reports (online or by mail) between Sept. 1 and Nov. 1 each year. Each report costs $50, and you can include this $50 payment in your budget for each fall.

The information required to file your annual report in Rhode Island includes your entity ID number, the official business name of your LLC, your LLC’s NAICS code, a brief description of the nature of your LLC’s business, the state where your LLC was originally formed, your LLC’s principal office address, your LLC’s mailing address, the name of your LLC’s contact person, the names and addresses of your LLC’s managers (if applicable), the date, and your name and signature.

For more info on annual reports for Rhode Island LLCs, check out our full article on this topic!

Taxes

When it comes to federal taxes, LLCs are considered as “pass-through” entities, meaning that they don’t need to file corporate tax returns. Rather, their owners and/or members report income and losses on their personal returns.

While LLCs are treated similarly at the state level, Rhode Island does impose an annual charge of $450 on its LLCs — the minimum business corporation tax. To pay this tax, file a Form RI-1065 by Apr. 15.

Additionally, if your LLC sells merchandise, it will be subject to a Sales/Use Tax, and if it maintains employees, it will owe a Withholding Tax and Unemployment Insurance. Register for these taxes using the Department of Revenue’s Combined Online Registration Service, or download the paper forms here.

Some LLCs are set to be taxed as corporations. If you’ve done this (or plan on doing this) with your company, it will be responsible for filing a corporate tax return and paying Rhode Island’s corporate income tax of 7%.

What if I Don’t Pay?

Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.

If you fail to submit startup filings or fees — like the Articles of Organization or the Application for Registration — you’ll be unable to commence business in the state, and penalized for doing so. And if you miss an annual report filing, like businesses commonly do, you’ll incur a late fee of $25 and fall out of good standing with the Department of State.

This means that your LLC cannot foreign qualify in most other states, apply for business loans, renew some professional licenses, and more until you reconcile your outstanding filings and fees. Remain outside of good standing, or fail to maintain a valid resident agent, and your LLC can be administratively dissolved.

Failure to pay taxes will result in a whole different set of penalties. The Sales Tax specifically incurs a late filing penalty of 10% of the amount owed and a late payment penalty of 10% as well. Missing other tax payments will result in similar fines and loss of good standing.

Planning Your Expenses

By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Rhode Island.

Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees — like annual reports and minimum business corporation taxes — so your business doesn’t fall out of good standing.

Key Steps for Starting a Rhode Island LLC

  • The first step to forming a Rhode Island LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
  • Next, you’ll need to choose your resident agent. While you can legally serve as your own resident agent in Rhode Island, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable resident agent service that can handle the responsibility of this position on your behalf.
  • The third step involves the preparation and filing of your Articles of Organization. You’ll need to fill out the paperwork and pay a $150 fee. Once the state processes this document, your LLC will be officially open for business!
  • That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for Rhode Island LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
  • You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
  • Next, you’ll need to register for any relevant taxes with the Rhode Island Division of Taxation, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.

Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of Rhode Island!

Key Steps for Maintaining a Rhode Island LLC

After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.

You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.

As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.

The Top 3 Rhode Island LLC Services

If you want to hire a reputable LLC formation service to handle the heavy lifting on your behalf, these are the three companies we trust and rely on the most.

  • ZenBusiness ($39) – ZenBusiness offers a well-rounded LLC formation package at a great low rate. Their standard LLC package includes a full year of registered agent service, an accounting assessment, and a customizable operating agreement. ZenBusiness also receives stellar customer feedback.
  • IncFile (FREE) – That’s not a typo! IncFile really does form LLCs for free. Even better, they include 12 months of registered agent service in their free package. IncFile has a ton of experience and more than 500,000 satisfied customers, so they’re always a reliable choice.
  • Northwest Registered Agent ($225) – Northwest offers a bit more of a premium service, but if you have the money, we think it’s worth it. Like ZenBusiness and IncFile, Northwest also includes a year of registered agent service with the purchase of any LLC formation package. They also offer the best customer support in this industry, with knowledgeable representatives who are familiar with the details of business formation processes in every state.

Frequently Asked Questions

Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in Rhode Island.

What are the state business tax rates in Rhode Island?

If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 3.75% and 5.99%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay Rhode Island’s 7% corporate income tax on your business revenue.

How quickly does Rhode Island process LLC formations?

The Secretary of State should be able to process your LLC’s formation within 1-3 business days.

How many small businesses are there in Rhode Island today?

The state of Rhode Island is home to more than 95,000 small businesses. Entrepreneurs of all backgrounds and business types find that Rhode Island is a great place to own and operate a small business.

What are the top small business resources and websites in Rhode Island?

The Rhode Island chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Rhode Island LLCs. The U.S. Small Business Administration’s Rhode Island District Office is another valuable resource, and the state’s Commerce Corporation also has plenty of good info.

Should I form my LLC in Rhode Island, or choose a state like Delaware or Wyoming?

Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.

However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.