Think of all the people you communicate with regularly to run your LLC. Business partners, employees, banks, lawyers, and financial advisors all probably come to mind. But what about the state? It may not be at the top of your list, but running a successful LLC in Rhode Island requires consistent interaction with the state.
Formation documents, business information changes, lawsuits, professional licenses, and Annual Reports – all of these (and more) require you to work with state agencies. The good news is that you don’t need to do it yourself.
Introducing the resident agent. A Rhode Island resident agent is an intermediary for your LLC, a person or company that handles your communication with the state. They’re a vital part of any LLC’s success. Before you file your Articles of Organization, you’ll need to have a designated resident agent. How? Why? Who? Read on to find out.
What is a Rhode Island Resident Agent & is it Necessary?
An LLC cannot be formed or do business in Rhode Island without first having a resident agent on file with the Secretary of State. This is required by law and the penalties can be serious. Maintaining a resident agent doesn’t just keep you in good standing. It also provides an important service.
Think of your resident agent as your ambassador to the state, handling all your LLC’s important legal, tax, and compliance information. This can either be an individual, company or resident agent service, as long as they meet the state’s requirements and consent to the appointment.
As soon as they’re appointed, your resident agent must be consistently available in Rhode Island to receive and act on mailed documents and service of process. Here’s what the Rhode Island LLC Act specifically says:
And here’s more from the Articles of Organization instructions:
No matter what happens, you’ll need to maintain a valid resident agent for as long as your LLC is in business. Failure to do so could result in your LLC’s administrative dissolution.
What are the Requirements of a Resident Agent?
Rhode Island is fairly flexible with its resident agent requirements. Even so, this doesn’t mean that you can appoint anyone you’d like. Your resident agent must:
- Be an individual Rhode Island resident or a corporation authorized for business in the state.
- Have a physical address in Rhode Island (no P.O. boxes allowed).
- Have a mailing address in Rhode Island.
If you’re up to the task, you can appoint yourself as resident agent (as long as you meet these requirements). An LLC, however, cannot be its own resident agent.
Once you find an agent who meets these conditions, your next step is to include their information when you file the Articles of Organization. Here’s what you’ll see when you fill out the form:
Have an agent in mind? Confirm that they meet these requirements. If so, you’re good to go! If not, you’ll need to keep looking.
Who can be a Resident Agent in Rhode Island?
Rhode Island’s resident agent requirements are pretty broad, so you’ll have no shortage of options. On top of that, your agent can be either an individual or a professional service. But think carefully before choosing, because each option has its own pros and cons. Let’s take a closer look.
You may choose to appoint a single person as your resident agent. Some LLC owners take on resident agent duties themselves. Others appoint one of their partners or managers. Some will even appoint a family member. As long as the proposed agent fulfills the state’s requirements, they’re a valid option.
In addition to being a Rhode Island resident, your agent must not currently be establishing residency or receiving benefits in another state, even if that residency is still forthcoming.
Some smart resident agent choices include attorneys, accountants, or other LLC partners, people who understand the ins and outs of business operations.
- Convenience – Having familiarity and mutual trust with your resident agent is extremely beneficial, and appointing an acquaintance can provide both. Plus, you’ll always know how to contact them.
- Cost – Hiring someone you know often won’t cost a dime. It’s certainly cheaper than a professional service.
- Scheduling – Part of a resident agent’s duty is being consistently available to receive mailed documents and service of process. If your agent goes on vacation or moves out of state, it will throw a wrench in your plans.
- Punctuality Risks – Some state communications and filings are very time-sensitive. If your agent is unavailable when documents are delivered, it could slow down the entire process and put you at risk for late fees and penalties. Even worse, a friend or family member could lose or misplace a document. So if you’d rather not interrogate Aunt Louise about the location of a particular tax form, you might consider using a resident agent service instead.
Resident Agent Service
If safety and reliability is your goal, hire a resident agent service. A business acting as your resident agent must be either a domestic entity in Rhode Island or a foreign entity who has foreign qualified in Rhode Island.
- Privacy – Some documents delivered to your resident agent will contain sensitive information. Do you want details about your lawsuit or taxes lost out there in the world? Definitely not. A friend or family member might misplace these documents, but a professional service will not. Plus, in Rhode Island, all resident agent names and addresses are available to the public. This might make an individual uncomfortable, but hiring a company will keep this personal information off the record.
- Reliability – Handling and processing time-sensitive documents is a resident agent service’s specialty, its area of expertise, its main game. Hire a professional service and you can be sure that your filings will be submitted properly and punctually, so you’ll never have to deal with late fees or other penalties.
- Location – Many resident agent companies offer service in most or all 50 states, so if business is booming and you decide to expand outside Rhode Island, you won’t need to find a new agent for each state.
- Cost – There’s no getting around it – hiring a service costs more than appointing an individual who’s willing to do it for free. However, for a reasonable price (roughly $100/year), you’ll receive premium services. Taking your car to a mechanic costs more than letting your neighbor try to fix it, but the mechanic gives you peace of mind that the job will get done right, and that may very well be worth the cost.
All of the other steps in the LLC formation process will keep you busy, but take some time to ensure you find a resident agent that fits with your business model, goals, and values. Do this, and your LLC will reap the benefits for years to come.
How to get a Free Resident Agent
Here’s a pro tip: you can get the reliability of a resident agent service and the cost-effectiveness of an individual. The best of both worlds. When you hire certain LLC services to start your business, they’ll throw in free resident agent service.
How it Works
Hire a company like IncFile or Northwest Registered Agent to form your Rhode Island LLC. In addition to taking care of your Articles of Organization and other formation requirements, they will automatically include a resident agent. It’s a great two-for-one deal.
And an LLC service is pretty affordable – $150 for the Rhode Island LLC formation fee, plus a $49 or $79 service fee. That’s great value for the number of benefits you receive. Some services will even cover and consolidate your LLC formation costs.
Take this route and you’ll sweep all formation paperwork and resident agent duties off your plate. Plus, to keep track of everything, these services provide user-friendly online dashboards, so you can follow everything they’re doing to keep your LLC in good standing.
Resident Agent Changes and Resignation
You may have a wonderful resident agent, someone who takes care of everything efficiently and who you trust completely. But you know what they say: all good things must come to an end. At some point in the life of your LLC, you may need to change your Rhode Island resident agent.
Here’s how to do it: go to the Secretary of State’s Online Filing System, enter your Customer Identification Number and PIN, then follow the directions. Or, if you’d prefer to use a paper form, download and complete the Change of Resident Agent form and submit it by mail or in person. For either method, you will need to pay a $20 filing fee.
Out of numerous reasons that you might need to make this change, the most probable is a current resident agent’s resignation.
An agent’s resignation might put you in a tight spot, but it will never come as a surprise. If your agent decides to resign, Rhode Island law mandates that they notify you prior to submitting an official resignation. Additionally, they will retain resident agent duties for 30 days after resigning, so you don’t need to rush to find a replacement.
Don’t drag your feet, though! After that requisite 30 day period, your LLC has 30 more days to bring on a successor, or it can be administratively dissolved.
Have Questions or Concerns?
This guide contains almost everything there is to know about Rhode Island resident agents. However, you might have a unique situation that requires additional information. Reaching out to the Rhode Island Secretary of State is easy, and they’ll have the answers you need. Here’s how to go about it:
Visit Their Website
The Rhode Island Business Portal offers plenty more information on the entire LLC formation process, so you’ll likely find the answer to your question.
Give Them a Call
Sometimes, though, it’s best to speak with a real person. In these cases, reach out to their Providence office at (401) 222-3040.