Rhode Island Incorporation Frequently Asked Questions
Do I need to reserve a corporate name?
No, but it is recommended to reserve a name prior to filing to ensure that it remains available during the incorporation process.
How do I reserve a corporate name?
The reservation of your corporate name will be handled by IncParadise and is included in the price of our service.
Do I have to renew my name registration?
No.
How do I incorporate in Rhode Island?
When using our service, IncParadise will file, on your behalf, the required administrative forms and articles of incorporation with the appropriate Rhode Island agency.
Is a registered agent required?
Yes. . The registered agent must have a business office identical to the registered office and must be either: (1) an individual residing in Rhode Island, or (2) a corporation with authority to transact business in the state. As part of our ongoing service, IncParadise does provide a registered agent service option that you can select during the online registration process.
How many Incorporators are required to form a corporation in Rhode Island?
One or more are required.
How many Directors are required to start a corporation in Rhode Island?
One or more as defined in the by-laws and stated in the articles of incorporation.
Are corporations in Rhode Island required to file an Annual Report?
Yes. A report must be filed between January 1 and March 1 of each year, except for the year of incorporation.
Rhode Island is ranked the 12th Healthiest State in the nation. (Morgan Quitno, 2005)
In a March 2004 study, the Milken Institute said Rhode Island was among the states best positioned to succeed in the information age, ranking the state 11th in the U.S.
Rhode Island, smallest of the 50 states, is densely populated and highly industrialized.
Cost of living
For Providence, RI (2005)
Index Score
Composite:
125.4
Housing:
157.3
Utilities:
121.8
Misc. Goods & Services:
113.1
Crime Rate
Rhode Island has the 16th lowest overall crime ranking in the U.S. (FBI, 2004)
Fees & Taxes
Business Inventory Tax Exempt.
Corporate Income Tax Rhode Island’s corporate tax structure consists of a flat rate of 9% on all corporate income.
Personal Income Tax Rhode Island’s personal income tax system consists of a tax of 25% on the taxpayer�s federal liability.
Personal Property Tax Rhode Island is one of the 38 states that collect property taxes at both the state and local levels. Sales or transfers of intangible personal property such as stocks, bonds, accounts receivable, money or insurance policies are exempt from property tax.
State Sales and Use Tax Base Rate: 7.0%
Machinery Rate: none
There is an exemption for tools, dies, molds, machinery and equipment to the extent used in an industrial converting, or processing tangible personal property or computer software for sale.
Unemployment Insurance Rhode Island’s new employers’ rate is 1.79% for 3 years.
Rhode Island LLC and Corporation Registration and Formation
You can form a corporation in Rhode Island or you can opt for a Limited Liability Company or any other business entity like a Benefit Corporation, Limited Partnership (LP), Limited Liability Partnership (LLP), L3C Limited Liability Company, Professional Service Corporation, and a Cooperative. The state has the right infrastructure and incentive programs to assist start-ups as well as existing businesses in achieving greater ROI in the long run. Some of the top businesses that have headquarters in Rhode Island include CVS Health, Citizens Bank, Nortek, Hasbro, FM Global, Amica Mutual Insurance, LIN Television Corporation, The Providence Journal, and Twin River Casino among others.
We are one of the top Rhode Island registered agents and can assist you with the successful registration of your business entity in the state.
Let’s take a look at how you can form a Rhode Island business LLC or Corporation.
Rhode Island LLC Registration and Formation
LLC company formation in Rhode Island is governed by 2013 Rhode Island General Laws, Title 7 – Corporations, Associations and Partnerships, Chapter 7-16 – The Rhode Island Limited Liability Company Act. The procedure for registration and formation of LLCs is as follows:
Step#1: Maintain a registered agent
If you are planning to form a Limited Liability Company in Rhode Island then you will be required to continuously maintain a registered agent in the state pursuant to RI Gen L § 7-16-11 (2013). This law is applicable for domestic limited liability companies as well as foreign limited liability companies.
We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Rhode Island. We can assist you to form a Rhode Island business LLC.
Step#2: LLC Name Reservation
One of the foremost steps towards company formation in Rhode Island is identifying a name for your business entity. The process is as follows:
Identify a name for your business entity
According to RI Gen L § 7-16-9 (2013), the name should contain the phrase or words “limited liability company” or the abbreviations “L.L.C.”, or “LLC”.
The chosen name should be distinguishable and should not be deceptively similar to the name of any limited partnership, corporation, or limited liability company
Apply for reservation of name pursuant to the provisions of RI Gen L § 7-16-10 (2013) (limited liability companies)
Submit the form through mail or online with the Office of the Secretary of State, Corporations Division along with the applicable fee. An LLC can reserve its name for a period of 120 days.
Step#3: Articles of Organization and Application for Registration
If you are planning to form a Rhode Island business LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. The steps are:
If you want to register a domestic LLC then you will be required to file “Articles of Organization” governed by RI Gen L § 7-16-6 (2013).
If your business entity is a foreign LLC then you will be required to file “Application for Registration” pursuant to RI Gen L § 7-16-49 (2013).
The application or documentation for registration of LLC can be filed with the Department of State – Business Services Division, in person or online.
We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the LLC registration.
In case, you have any questions regarding how to form a Rhode Island business, feel free to call us on 702-871-8678.
Rhode Island Corporation Registration and Formation
If you are planning to form a Corporation in Rhode Island then it will be governed by 2005 Rhode Island Code – CHAPTER 7-1.2 — Rhode Island Business Corporation Act. The procedure for registration and formation of a business corporation is as follows:
Step#1: Maintain a Registered Agent
If you are planning to form a business or professional corporation in Rhode Island then you will be required to continuously maintain a registered agent in the state pursuant to 2005 Rhode Island Code – § 7-1.2-501. This law is applicable for domestic as well as foreign corporations.
We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Rhode Island. We can assist you to form a Rhode Island business as we are in compliance with all regulations in the State of Rhode Island.
Step#2: Corporate Name Reservation
In order to form a corporation in Rhode Island, one of the key steps is identifying a name for your business entity. What is the process? The process is as follows:
Identify a name for your business entity
According to 2005 Rhode Island Code – § 7-1.2-401, a corporate name should contain the phrase or words “corporation”, “company”, “incorporated”, or the abbreviations “Corp.”, or “Inc.”
The chosen name should be distinguishable and should not be deceptively similar to the name of any limited liability company, limited partnership, or corporation
Apply for reservation of name pursuant to 2005 Rhode Island Code – § 7-1.2-403.
Submit the form through mail or online with the Office of the Secretary of State, Corporations Division along with the applicable fee. A business corporation can reserve its name for a period of 120 days.
Step#3: Articles of Incorporation and Certificate of Authority
If you are planning to form a corporation in Rhode Island, then the most important step is to prepare and file the proper documents for a business corporation. The steps are:
If you want to register a domestic corporation then you will be required to file “Articles of Incorporation” pursuant to RI Gen Laws § 7-1.2-202 (2005).
If your business entity is a foreign corporation then you will be required to file a ” Certificate of Authority” to transact business in the state pursuant to RI Gen Laws § 7-1.2-1405 (2005).
The application or documentation for registration of a corporation can be filed with the Department of State – Business Services Division, in person or online.
We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the incorporation.
If you have any questions regarding Rhode Island incorporation or LLC formation, you can simply visit the Rhode Island Business formation page.
A report by Forbes ranks Rhode Island #43 in their list of “Best States for Business” and has a Gross State Product of $63 billion. Forbes ranks its economic climate at 36 and is ranked #32 in the 2016 Economic Index. The good news for those who want to set up companies in Rhode Island is that the state has made a few significant changes in the business tax law in order to improve its business and tax climate. One of the reasons for such a change is that the corporate income tax rate has decreased from 9% in 2014 to 7% in 2015. Apart from this, several business incentives have also been implemented to aid in the overall growth and support for small and medium enterprises.
Why Choose Rhode Island for Incorporation?
There was a time when manufacturing was one of the key economic drivers but today the economic health of Rhode Island is driven by multiple industries including manufacturing, financial services, fishing, hospitality, and agriculture. These are the industries who are mostly incorporating in Rhode Island. The annual growth rate have jumped from 0.2% in 2016 to 3.5% in 2017, the latter being faster than the overall growth rate of the nation at 3.4%.
Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses in this state:
Qualified Jobs Incentives Tax Credit: If you set up a company in Rhode Island and expand your workforce then you would be eligible to receive annual, redeemable tax credits for a period of 10 years as a part of the Qualified Jobs Incentive program. You can earn credits amounting to $7,500 per job per year. Download Application
Industry Cluster Grants: Industry Cluster Grants is a program that encourages small and medium business entities to work together for the purpose of exchanging ideas, solving problems, and developing talent. The program makes available grants required for fund planning and organization of a cluster. As part of the program, “implementation grants” are also available for strengthening the cluster in specific areas like tech transfer, R&D, and workforce development. Implementation Grant Application Materials
How do you incorporate in Rhode Island?
What is the process through which you can set up company in Rhode Island? What type of documentation is required? Can the registration documents be filed online? If you are confronted with these questions then the following steps will help you in understanding how incorporation works in Rhode Island:
Type of Business
The first step towards incorporation in Rhode Island is choosing the type of business you want to form. You can choose to form an LLC or a Corporation. The type of business entity you want to form can be either domestic or foreign. The forms and fees will be different for each type of entity. Know more
Business Entity Name
The second most important step towards company incorporation in Rhode Island is registering your business entity name. There are 3 steps towards business name formation and they are:
Naming Requirements: A corporation under 2005 Rhode Island Code – § 7-1.2-401 and an LLC under RI Gen L § 7-16-9 (2013) should contain words like “corporation”, “incorporated”, “limited liability company” or abbreviations like “corp.”, “inc.”, “ltd.”, “L.L.C.” or similar abbreviation.
Business name search: You need to search for a business name that is not in use currently. You can conduct name search here.
Name Reservation: Once you have identified business entity name, and if the name is available then you can reserve the name pursuant to 2005 Rhode Island Code – § 7-1.2-403 for business corporations and RI Gen L § 7-16-10 (2013) for LLC’s. You can reserve the name with the secretary of state for a non-renewable period of 120 days.
A foreign business entity will have to register their business name pursuant to 2005 Rhode Island Code – § 7-1.2-404.
Choose a Registered Agent
Whether you form a corporation or an LLC business entity, in order to transact business in the state of Rhode Island, you will have to maintain a registered agent pursuant to RI Gen L § 7-16-11 (2013) for LLC and 2005 Rhode Island Code – § 7-1.2-501 for Business Corporations.
We are one of the respected registered agents in Rhode Island and will be responsible for initiating incorporation in Rhode Island through processing of your “Articles of Organization”, and “Articles of Incorporation” for domestic entities and “Application for Registration” and “Certificate of Authority” for foreign business entities.
Articles of Incorporation and Certificate of Authority
You will be required to file “Articles of Incorporation” pursuant to pursuant to RI Gen Laws § 7-1.2-202 (2005), if your business is a domestic corporation. You will have to file a “Certificate of Authority” pursuant to RI Gen Laws § 7-1.2-1405 (2005), if it is a foreign business entity. In order to streamline the process of incorporation in Rhode Island, we can file documents on your behalf through the online process or through an expedited process.
Date Stamped Copies
As a part of the process of company incorporation in Rhode Island, we will ensure, you receive date-stamped and filed copies that verifies that the state has filed as well as formed your corporation.
Costs and Fees associated with Rhode Island Incorporation
What would it cost to set up a company in Rhode Island? Check Fees here!
Advantages of Incorporating a Business in Rhode Island
What opportunities could be there for a start-up company Rhode Island? The Ocean State is considered an epicenter for food innovation, design trends, and innovative developments in manufacturing. Here’s a fact: The concentration of consumer goods industry in the state is almost double the national average, and the good news is that expansion is being predicted in the manufacturing sector. In fact, the productivity is also very high for certain Rhode Island industries including Custom Manufacturing, which has seen a growth of 45% more than the national average.
Although, Rhode Island is one of the smallest of the 50 states, it has several big industries. One of the industries that have been thriving for quite some time and has seen a spur in the growth of a start-up company in Rhode Island is the “Health” industry and it is also the largest growing industry. This is followed by the Tourism industry where sales have been exceeding $5.75 billion per year. One of the reasons for industries and businesses growing in the state is because of the strong business climate driven by advantages and incentives. Let’s take a quick look at some of the advantages of forming an LLC or a Corporation in Rhode Island.
Advantage#1: Salient benefits of Corporation or LLC
Corporation
Sales Tax Exemptions: There are a variety of sales tax exemptions that you can benefit from especially if you register a new business in Rhode Island. Some of the top programs beneficial for businesses include:
– Tax exemptions on sales of computer software, tangible personal property, and public utility services
– Tax exemptions on sales, use, or even storage of various machinery, tools, and equipment to be used in an industrial plant for manufacturing purposes.
– Sales and use tax exemption on wine and spirits being sold at liquor stores and package stores.
– Tax exemption on scientific equipment used for research and development. Certificate of Exemption
Pass through taxation: If you register a new company in Rhode Island as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.
Independent Life: One of the salient advantages of an S Corporation in Rhode Island is that it enjoys an independent life. The death or incapacitation of a stockholder will not disturb operations of the business.
LLC
Small Business Incentives: If you register a new company in Rhode Island as an LLC, you will be able to benefit from several small business incentive programs that the state offers. Some of the popular programs include:
– Small Business Capital Investment Tax Incentives: Small business entities including LLC’s in the state will be eligible for two types of incentives, which are Deductions or Modifications and Capital Gains Exclusion.
– Disabled Access Credit for Small Businesses: tax credit program through which businesses can derive a credit of 10% of the total amount of expenditure on specific activities of business.
Flexible Profit Distribution: An LLC has the opportunity of selecting different ways of distribution of profits.
Limited Liability: If you register a new business in Rhode Island as a LLC then you will be able to enjoy limited liability protection. This means claimants can sue the LLC and not the owner or investors.
Advantage#2: Other Business Incentive Programs
There is a variety of business incentive programs including innovation incentives and financing programs available for small and medium enterprises or a start-up companies in Rhode Island. Let’s look at some of the top programs in Rhode Island.
Small Business Loan Program: Small businesses comprise of 98.9% of all businesses in the state and hence a Small Business Loan Fund Program (SBLF) has been implemented to ensure businesses can focus on their growth and expansion and have a level playing field. A start-up company in Rhode Island can avail of a maximum working capital of $500,000 through the SBLF program. More Information
Innovation Network Matching Grants: This program is an integral part of “Innovation Incentives” for small and medium sized businesses. Innovation Network Matching Grants are normally provided to intermediary organizations involved in projects that offer space on flexible terms, technical assistance, or provide capital to small businesses registered in Rhode Island especially in key industries like healthcare, life sciences, clean technology, food and agriculture, and cyber security among others. Download Application
Are there any Disadvantages of Incorporating in Rhode Island?
When you register a new business in Rhode Island, you can be rest assured that there is a wide variety of business incentives to leverage. The question is – are there any disadvantages? The disadvantages are limited to the type of business entity you form. For example, an LLC requires more paperwork and is complex as compared to a partnership or sole-proprietorship. Similarly, disagreements or conflicts among the stockholders of a business corporation may destabilize overall decision making. The disadvantages will not affect business growth keeping in mind the incentives and infrastructure offered by the state.
Rhode Island with its strong infrastructure, economic reforms, and small business incentives stands out as a destination with several opportunities for any new or existing business entity. Apart from the process of registration, one of the other important aspects of forming and transacting a business in the state is “business license.”
Although, all businesses in Rhode Island doesn’t require licenses, there are specific businesses that will require single or multiple licenses and/or permits to become operational. There are however certain licenses that are issued by the state while some are issued by the city or county. The Department of Business Regulation oversees the issuance of business license in Rhode Island for businesses in the following sectors or categories:
Banking
Securities
Design Professionals
Commercial Business Activity
Liquor Wholesale & Manufacturing
Insurance
Step-by-Step Guide to a Business License in Rhode Island
What are the requirements for obtaining a business license in Rhode Island? Which business entities require a licenses and which require permits? Who is the issuing authority for these licenses? Here is a step-by-step approach towards acquiring licenses or permit in the state:
Step#1: The Industry or Business Type
How would you know what type of business or professional license is required to operate in Rhode Island? Which type of business license is issued by the state? The type of industry or the activities of a business entity helps in identifying the type of business license required.
In the state of Rhode Island, issuance of licenses is coordinated under specific projects. In order to understand this, let us take a look at some examples:
Food Services
Any business that serves food requires a food service license. This includes eat-in restaurants, take-outs, food delivery, mobile food trucks, caterers, soft-serve ice cream machine vendors, and temporary food services among others.
An eat-in restaurant will require a restaurant business license while a soft-serve ice cream machine vendor will require a frozen dessert license.
Restaurant Classification: Eat-in restaurants include Full Service Restaurants, Bars, Lounges, Taverns, Luncheonettes, Snack Bars, Fountains, Cafeterias, Buffet Services, Fast Food Services, Schools (In-Feed) etc.
Fees: The fee varies according to the type of business and other details. For instance, the fee for a Rhode Island company license for a restaurant will depend on whether it is “50 Seats or Less” or “More Than 50 Seats.” The fee will also vary according to the Licensing Cycle. For example, the fee for a 50 seater restaurant will be $240 during the period from March 1-July 31 and $120.00 during the period from November 1-February 28.
Expiration Date/Renewal: The expiration date for a restaurant license is April 30 each year.
Issuance: The license is issued by Department of Health, Office of Food Protection
Liquor License
If you are planning to serve liquor in a restaurant or are planning to manufacture, import, export, store, sell and transport alcoholic beverages, then you will require a business license in Rhode Island.
The licenses are categorized under:
Liquor Wholesalers: Class A, Class B, and Class C
Liquor Manufacturers: Brewery, Brew on Premises, Brewpub, Farmer Winery, Distillery, and Winery
Liquor Retail Licenses
Liquor Agents and Salespersons
Fee: The fee for acquiring a liquor license will depend on the category of liquor business like the Annual license fee for Wholesale Class A is $2,000 while that of a “Brew on Premises” is $100 if less than 50,000 gallons.
Expiration Date/Renewal: The expiration date for this business license is December 01 each year.
Issuance: The license is issued by the Division of Commercial Licensing, Liquor Section
Step#2: Licenses issued by City/County
If your business or industry type doesn’t fall under a state-wide license project then you will have to check with the local city or county office. A Rhode Island company license can also be issued by local counties or cities in which the business is located. Let’s look at an example to understand how this works.
If you form a business in Providence, RI that focuses on entertainment like live performances, shows, disc jockeys, exhibitions, and sporting events then you will be required to apply for an “Entertainment License”. The business license fee varies according to the activity type and place like the fee is $10.00 per day for indoor entertainment and $25.00 per day for outdoor entertainment.
Note: A single day entertainment license would also require the approval of the Providence Board of Licenses.
You have to apply for the entertainment license ONLINE.
Step#3: Issuance of a Business License
How is a business license in Rhode Island issued? You have to identify the following to complete the process:
The type of business or industry or activity
Do you need a single license or multiple licenses?
Will it be issued by the state or the city?
Once you have identified the above, all you need to do is either download the application or submit online or contact the concerned state department or city of clerk office.
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