While starting and forming an LLC online in Rhode Island is relatively simple, there are several crucial steps that the prospective business owner needs to take in order to ensure they are registered properly.
Determine members in the LLC
The LLC may have one single owner, or it may have more than one owner. Each owner (also called a member) will have an ownership interest in the company. As a result, they will receive a share of the company’s profits, losses, and assets. The members will also have the right to vote, as well as participate in management roles. (http://www.wikihow.com/Form-an-LLC-in-Rhode-Island)
Naming the LLC
The first step to forming an LLC in Rhode Island is to choose your LLC’s name. It is important to note that this name must have the words Limited Liability Corporation, L.L.C, or LLC. It cannot be similar to other registered names, and it cannot potentially be confused with with a federal or state agency. The name can be checked online at http://ucc.state.ri.us/CorpSearch/CorpSearchInput.asp, or you can call the call the Business Filing offices at (401) 222-3040 between the hours of 8:30 and 4:30 Monday through Friday, and a representative will be able to check name availability. (http://www.wikihow.com/Form-an-LLC-in-Rhode-Island, https://howtostartanllc.com/rhode-island-llc)
Registering the LLC name
Once you have chosen a name and verified the LLC name, you will need to reserve that name with the Office of the Secretary of State’s Corporations Division. There is a filing fee of $35 in order to reserve the name for up to 120 days. The form to reserve the name is Form 620 and is called Reservation of Entity Name. It can be found at http://sos.ri.gov/assets/downloads/documents/620-reservation-of-entity-name.pdf (http://www.wikihow.com/Form-an-LLC-in-Rhode-Island)
Registering the company
Choose a registered (resident) agent to send and receive official papers on the LLC’s behalf, including state filings. This can be yourself, or another member of the LLC. The registered agent must have a Rhode Island street address, which must be maintained as long as the LLC is registered. The registered agent will be responsible for handling all official legal documents, correspondence, and tax forms. The company itself must have a principle street address in the state of Rhode Island as well, but this can be declared as Not Yet Determined at the time of registration.
After choosing the registered agent, you will need to file the Articles of Organization with the state. The application can be filed online at http://ucc.state.ri.us/loginsystem/login_form.asp or the form can be printed at mailed from http://sos.ri.gov/documents/business/forms/400.pdf. The filing fee is $150. Confirmation of proper filing may be done online at http://ucc.state.ri.us/corpreject/corprejectionslist.asp. If the filing is rejected for any reason, it can be found online at http://ucc.state.ri.us/corpreject/corprejectionslist.asp. (https://howtostartanllc.com/rhode-island-llc)
It is important to note that every year between September 1st and November 1st, the LLC must file an annual report with the Secretary of State Business Services. Failure to file this report may result in the Certificate of Organization being revoked. The annual report processing fee is $50, and will need to be accompanied by Form 632, which can be found online at http://sos.ri.gov/documents/business/forms/632.pdf. (https://www.legalzoom.com/articles/rhode-island-llc-guide)
Create An Operating Agreements
This legal document is not required to be filed and is optional, but it is generally considered to be a good practice. This document outlines the ownership and operating procedures of the corporation. This agreement will also allow you to form official financial and working relationships with the other members in an established, legally recognized system. (http://www.wikihow.com/Form-an-LLC-in-Rhode-Island)
At this point, the LLC is very close to being completely formed. One of the final steps to complete at this point is to obtain an EIN number. This number is required in order to obtain a business bank account, hire employees, and file federal and state taxes. You can apply for an EIN online at https://sa.www4.irs.gov/modiein/individual/index.jsp or print and file the form at https://www.irs.gov/pub/irs-pdf/fss4.pdf.
Finally, for tax purposes, you will need to determine your filing status. An LLC may file for tax purposes as a separate entity, a corporation , or a partnership. LLCs with only one member may file as a separate entity. If there are two or more members, the LLC must choose between a partnership or corporation. They will generally default to partnership, so you will want to file for a corporation status if desired. It is recommended to discuss the advantages and disadvantages of each type of filing status if you are unsure which one to use. (http://www.wikihow.com/Form-an-LLC-in-Rhode-Island).