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:

1. 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.
2. Business name search: You need to search for a business name that is not in use currently. You can conduct name search here.
3. 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.
4. 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!

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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.

Advantages of setting up an LLC or Corporation in Rhode Island

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.

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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.
• Application: License Application
• 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.
• Application: Sample License Application
• 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:

1. The type of business or industry or activity
2. Do you need a single license or multiple licenses?
3. 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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Once your company is set up, you will need:

1. Tax ID (EIN) – free over the Internet or phone.
2. Yearly Requirements and Fees for South Carolina companies
3. Company Minutes & Stock Certificates – are included in incorporation. You will have access to documents generated on your client account.

South Carolina additional services

• Registered Agent
• Annual Report
• EIN (Tax ID)
• More Additional Services

• Why South Carolina?
• South Carolina Registered Agent
• South Carolina Annual Requirements
• South Carolina LLC Statutes: South Carolina Code Title 33, Chapter 44: Uniform Limited Liability Company Act of 1996