If you’re an entrepreneur or a small business owner, forming a limited liability company (LLC) in Rhode Island is an excellent choice. Not only do Rhode Island LLC owners enjoy personal liability protection— they also have numerous tax advantages and offer owners more flexibility than most other business entities.
Unfortunately, many entrepreneurs and small business owners are intimidated by the paperwork and fees required when creating and maintaining LLC. If you’re one of them, don’t let these discourage you!Figuring out how to start an LLC is usually more accessible and affordable than most people think. In this post, we’ll explore the main LLC fees Rhode Island businesses should know about and what documents you need to file, and when. We’ll discuss:
Are you ready to form an LLC? Let’s get started!
Business Name Requirements And Reservation Fees
Since you’re forming an LLC, you have to have something that indicates this business entity in your title, such as “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.”
You also cannot include the following:
Despite only being 1,214 square miles, Rhode Island is home to more than 106,000 small businesses. That’s more than 87 businesses for every square mile, and any one of them may already be using your desired business name. Before you file your LLC paperwork, run a business search on the Rhode Island Secretary of State website.
You should also check if your LLC name is available in the Trademark Electronic Search System (TESS) database. The TESS database lists organizations that already have business name trademarks for marketing purposes. For example, you can’t market yourself as “Apple,” “Microsoft,” or “Adidas” because these companies already are. If you do, you’re committing trademark infringement and may receive a cease and desist.
If your name is available, you can reserve it for 120 days for $50. Reserving your business name gives you exclusive rights to use it, meaning that no one else can use it when filing an LLC while you get the rest of your paperwork in order.
You don’t have to reserve your LLC name, but we strongly recommend it. If another organization uses your name while you’re still in the process of filing, you’ll have to come up with a new name and start the process over.
“Doing Business As” And Domain Name Fees
Your LLC’s official name is required on all of your legal paperwork, like your articles of organization and business licenses. However, you don’t have to use it for brand recognition in everyday conversation. You can use a “Doing Business As” (DBA) name instead and make it easier for your friends and customers to remember your organization. Before settling on a name, run it through the TESS database to ensure you can use it without having any trademark issues.
The cost of a DBA name in Rhode Island is $10. You’ll also need to get it notarized. If you don’t do this before submitting your DBA form, you can get it notarized with a clerk’s public notary for an additional $5.You should also consider having a website with a domain name that makes it easy for your customers to find you. Check your domain availability on who.is. This directory will identify multiple variations of your domain (e.g., .com, .co, .org, etc.) if it’s available, and if so, for how much. Domain name costs can start at as low as $8.99 or $9.99, but more competitive domains can cost thousands.
Registered Agent Fees
A registered agent is a person or business entity that receives state notices and legal documents on your LLC’s behalf. Your registered agent has to have a physical address in Rhode Island, not just a P.O. Box.
You can be your own registered agent for free, but some business owners opt to hire a commercial registered agent service instead. Usually, this is for one of two reasons:
If you want to work with a commercial registered agent service, there are plenty to choose from. You should expect to pay $49 or more per year.
How To Get A LLC In Rhode Island
Your articles of organization are the legal documents you sign to make your LLC official. It outlines all the important information about your LLC that the government, creditors, and vendors need to know.
The term “articles of organization” sounds intimidating, but the information required is pretty straightforward. It includes the following:
Your articles of organization cost $150 to file. Once approved, you’re officially an LLC!
LLC Fees In Illinois For Operating Agreements
Rhode Island does not require you to submit an operating agreement along with your articles of organization. We recommend drafting one or having an attorney create one for your business anyway—and get all of your members to sign it.
Your operating agreement defines your LLC’s rules and regulations and, in a way, acts as your organization’s constitution.
Whether you’re a single-member LLC with no employees or a multi-member LLC with hundreds of members, having an operating agreement can only benefit your business. It serves as an excellent reference point anytime you make a significant decision or if a member has a financial or legal question about your organization.
More importantly, it can protect your business in the event of a legal and financial dispute. Without one, critical decisions may be left up to the courts to decide, and their ruling may not be in the best interest of the LLC, its members, or you.
The key elements of your operating agreement should include:
Operating agreements are free to create, but if you want one that’s guaranteed to hold up in court, you should hire an attorney to draft one for you.
Sales And Use Tax Permit Fees
Many business owners operating in Rhode Island will be required to have a sales and use Tax permit. If you’re selling any kind of taxable service, you need a sales and use tax permit to do so. Even if you’re only making sales for one day, like at a trade show or flea market, you need to obtain a sales and use tax permit.
To get a permit, you’ll need to provide the following:
Besides the $10 application fee, your sales and use tax permit is free, and you’ll receive it right after filling out your application.
Business License Fees In Rhode Island
Your sales and use tax permit is the main license required for Rhode Island LLCs. However, certain occupations require specific licenses, permits, and registration forms. Some cities or counties may have their own business license requirements, so check your local government website for more information.
Rhode Island LLC Annual Fees
Now that you’re officially an LLC and have all of your required licenses and permits, you must remain in good standing with your local, state, and federal government. In addition to paying taxes and operating lawfully, you have to file your annual report.
Annual reports in Rhode Island cost $50 to file and are due between February 1 and May 1. If you file after June 1, you’ll also have to pay a $25 late fee.Rhode Island’s annual report fee is affordable compared to some states. For instance, Delaware LLC fees are $300 annually, Massachusetts LLC fees are $500, and California LLC fees are $800 or more!
Total Cost To Form LLC Rhode Island
Here’s the full list of all the main LLC fees in Rhode Island and how often they’re due:
Business name reservation
DBA name designation
$10 year you file
Registered agent fees
$0, or $49+/yr if with a commercial registered agent service
Articles of organization filing fee
Operating agreement costs
Business license fee
Sales tax registration fees
$10 application fee
Do you still have more questions about LLC fees in Rhode Island or about LLCs in general?
It doesn’t matter if your LLC includes one person or one hundred. The costs will be identical to the requirements to get your LLC license.
A physical copy of your certificate of good standing costs $22. You’ll typically need to have a copy of this certificate when opening a business bank account or working with a lending institution. It helps prove that your LLC is legitimate.
Paying yourself from an LLC is pretty straightforward.
Refer to the terms outlined in your operating agreement—especially if your LLC has multiple managers or owners. Based on that information, transfer a portion of your organization’s cash reserve from your business account to your personal account, or divide it among other LLC members based on your terms.
Conclusion: Rhode Island LLC Fees – How Much Are They?
Now that you know how much it will cost to start and maintain your LLC, you’re on your way to running a successful organization!
Are you ready to capitalize on that success? Check out The Lazy Man’s Guide to Living The Good Life, and discover how to optimize your chances of running a thriving business!