How to Form an LLC in Rhode Island

Co-authored by Clinton M. Sandvick, JD, PhD

Last Updated: January 31, 2023 References

A limited liability company (LLC) is a hybrid legal structure that combines aspects of a corporation and a legal partnership.^{[1]
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U.S. Small Business Administration
U.S. government agency focused on supporting small businesses

Go to source} The biggest advantage of forming an LLC is the limited liability component - in other words, if the LLC suffers a financial loss or is sued, the LLC must pay but the individual members who own that LLC are not personally responsible.^{[2]
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U.S. Small Business Administration
U.S. government agency focused on supporting small businesses

Go to source} In order to form an LLC in the State of Rhode Island, you will need to understand the formal legal procedures and requirements for business formation in Rhode Island. The path to forming an LLC requires close attention to tax obligations and common business practices as set forth by the Secretary of State of Rhode Island. Learning how to form an LLC can help you get your business off the ground and protect your investments in Rhode Island.

Part 1

Part 1 of 3:

Planning Your LLC

An LLC may be made up of a single owner (called a member), or multiple members.^{[3]
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Research source} Each member has ownership interest in the company, which includes that member's share of the LLC's profits and losses, the right to receive assets, and any granted right to vote or participate in management roles within the LLC.^{[4]
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2
Choose an entity name. The first step to forming an LLC is to choose a name for your company. The State of Rhode Island requires that the name include either the words "limited liability company" or the letters "LLC" (with or without punctuation).^{[5]
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Research source} There are also specific requirements regarding the name chosen by a prospective LLC to ensure that your business is not confused with an existing business.
- The name must be unambiguously unique and dissimilar from any existing name of a corporation, non-business entity, domestic/foreign LLC, or any other limited partnership on file or on reserve with the Business Filing Section.^{[6]
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- You can search online to see if your proposed LLC name is registered among the existing business names in Rhode Island by visiting the Office of the Secretary of State's Division of Business Services website at http://ucc.state.ri.us/corpsearch/corpsearchinput.asp.
- Alternately, you can call the Business Filing offices at (401) 222-3040 Monday through Friday between the hours of 8:30 am and 4:30 pm (EST) to speak with a representative over the phone who can help you determine if your chosen LLC name is a viable option.^{[7]
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3
Reserve your chosen name. Once you've chosen a name and verified that it is not already taken or reserved, you may reserve that name with the Office of the Secretary of State's Corporations Division. Entity names may be reserved for a period of 120 days for a fee of $50. In order to reserve an entity name, you must complete and submit Form 620: Reservation of Entity Name.^{[8]
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- The reservation must include the full entity name, the type of entity (in this case, clarifying that you intend to form an LLC), your name and address (or the name and address of the person making the reservation for your LLC), and must be signed and dated.^{[9]
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- Even if you conducted a preliminary name check online, that name check is not binding and does not guarantee that another entity hasn't chosen or reserved that name while you were filing your reservation. The Office of the Secretary of State makes the final decision regarding a name's availability.^{[10]
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- Your $50 reservation fee should be made payable to the Rhode Island Secretary of State.^{[11]
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Part 2

Part 2 of 3:

Registering Your Company

1
Choose a resident agent. Every LLC in the State of Rhode Island must have a resident agent, also called a registered agent.^{[12]
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Research source} The primary roles of the resident agent are to keep the LLC's articles of organization and operating agreement and to serve as the primary point of contact for the LLC. Any important correspondences, including lawsuits, tax forms, and other business documents for the LLC, may be submitted to the resident agent during business hours, and he or she is responsible for forwarding those documents to the LLC's forwarding address.^{[13]
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- The resident agent must have a registered Rhode Island street address, which must be provided at the time the LLC's application materials are submitted to the state.^{[14]
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2
Declare your entity's filing status. In the State of Rhode Island, an LLC may file for tax purposes as a partnership, a corporation, or a separate entity.^{[15]
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Research source} The separate entity filing is typically only available to LLCs with a single sole member. Otherwise, the LLC's members must choose between filing as a partnership or corporation.^{[16]
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Internal Revenue Service
U.S. government agency in charge of managing the Federal Tax Code

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- LLCs with more than one member will default to a partnership unless the members file for a corporation status.^{[17]
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  Internal Revenue Service
  U.S. government agency in charge of managing the Federal Tax Code
  
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- If you're uncertain about the advantages and disadvantages of each filing status, consider speaking with a tax expert or a financial planner. These individuals can review your business and all of its gains/losses to help you determine which filing status would work in your best interest.
The LLC must designate a principal address, which must be a valid Rhode Island street address. If the LLC's members do not yet have an address, they may state "not yet determined" on the filing paperwork, though a final address must be settled upon at a later date.^{[18]
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There are two options for the LLC's management. It may be managed by all of its members collectively, or by one or more members of the LLC. The manager(s) must be designated on the Articles of Organization at the time of filing, and the name(s) and address(es) of all managers must be listed in the appropriate box on the form.^{[19]
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5
Complete and submit Form 400. Form 400, the Articles of Organization, must be completed and submitted to the Department of State's Business Services Division. You must include all of the above information and choose an effective date (either the date you file the form or a later date no more than 30 days from the filing date). Form 400 can be found through the Business Services Division website at http://sos.ri.gov/documents/business/forms/400.pdf.^{[20]
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- The Articles of Organization must be signed and dated by an authorized person.^{[21]
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  Research source} If the authorized person is not a member of the LLC, he or she must be authorized by the articles of organization or by an operating agreement to act on behalf of the LLC as an officer, manager, or other form of representative.^{[22]
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- Form 400: The Articles of Organization must be accompanied by a $150 filing fee. That fee may be made in person at the Business Services Division using cash, credit card, or check. If the form cannot be filed in person, the fee may be sent (along with the completed form) by mail to the Business Services Division. Checks should be addressed to the R.I. Department of State.^{[23]
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Part 3

Part 3 of 3:

Meeting Financial Requirements

If your LLC has more than one member, even if you do not have any actual employees, you must request an IRS Employer Identification Number (EIN). You must also obtain an EIN for the LLC if you are a sole-member but hire any employees, or if you opt to have your LLC taxed as a corporation instead of a sole proprietorship.^{[24]
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Research source} You can do this through the IRS website at https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online. There is no filing fee to request and obtain an EIN from the IRS.^{[25]
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2
Determine your tax obligations. Once your LLC is registered with the State of Rhode Island, you must determine your tax obligations through the IRS. Your obligations and the forms you must submit will vary, depending on how you elect to be taxed.
- A sole proprietor filing with a "disregarded entity" status must submit either a federal pro forma tax return, federal Form 1040 Schedule C, federal Form 1040 Schedule E, or federal Form 1040 Schedule F, depending on which form is applicable for your LLC. You must also submit a completed state Form RI-1065.^{[26]
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- An LLC filing with a "partnership" status must submit a copy of federal Form 1065 with a completed state Form RI-1065.^{[27]
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- An LLC filing with a "corporation" status must submit a copy of federal Form 1120 with a completed state Form RI-1120C.^{[28]
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3
File annual reports. All LLCs operating within the State of Rhode Island must complete and submit state Form 632: Limited Liability Company Annual Report. The report must be filed each calendar year between September 1 and November 1, beginning one year after the original Articles of Organization were filed and continuing every year after for the lifetime of the LLC.^{[29]
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- Form 632 is available online at https://www.sos.ri.gov/assets/downloads/documents/632-limited-liability-company-annual-report.pdf.
- A filing fee of $50 must also be submitted with the completed Form 632 to the Division of Business Services each year.^{[30]
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You must be at least 18 years of age to form an LLC.

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It is highly recommended that you draft an LLC Operating Agreement, though this is not required to form or operate an LLC in Rhode Island.

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Warnings

Be aware that, should you decide to dissolve the LLC, there are additional obligations that must be met. Articles of dissolution or a formal certificate of withdrawal must be filed with the State of Rhode Island at the time the LLC is dissolved. Contact the Secretary of State's Business Filing office for more information on how to formally dissolve an LLC, if the situation arises.^{[31]
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