How Much Does an LLC Cost in Rhode Island (Advanced Guide)
If you’re looking to start a Rhode Island LLC, you may be wondering about the associated costs of a Rhode Island business.
Through my experience as a Mergers and Acquisitions specialist and consultation with LLC experts in the state, we will review the fees associated with creating a Rhode Island LLC so that you know what to expect when establishing your business.
To help facilitate the formation of your company, our team spent considerable time researching the requirements and corresponding costs to form a Rhode Island LLC.
Quick Summary
- An LLC in Rhode Island costs $150 to file the Articles of Organization.
- Additional costs include a registered agent service, business licenses and permits, an annual report fee, an operating agreement, and other pertinent LLC documents.
- According to the Ibis World, employment in Rhode Island has grown at an annual rate of 1.8% over the last five years, surpassing the national average and indicating a robust local economy conducive to new LLCs.
- In my years in the industry, I’ve learned the importance of hiring a legal professional when forming LLCs since they ensure the legality of businesses.
Cost to Start an LLC in Rhode Island
To form an LLC in Rhode Island, there are mandatory fees and optional costs you have to cover. These include the following:
1. LLC Formation Filing Fee ($150 - Mandatory)
An LLC in Rhode Island costs $150 for essential filing. This fee is to register your LLC in Rhode Island and file your LLC Articles of Organization through the Rhode Island Secretary of State. This can all be done online, in person, or by mail [1].
When a client wanted expedited service, I found out that the state doesn’t offer one, which was fine since the online order processing only takes one to three business days.
2. Registered Agent Service Fee ($80-$300 – Optional)
When you create your LLC in Rhode Island, you must legally list a Rhode Island resident agent on your paperwork.
Hiring a professional registered agent in Rhode Island will start around $80-$300, depending on which resident agent service you choose to work with.
Whoever you choose must have a physical Rhode Island address and be open during regular business hours to accept paperwork.
According to the SBA, 105,320 small businesses represent 98.9 percent of Rhode Island businesses, highlighting the critical role small enterprises play in the state's economic framework [2].
3. Name Reservation Fee ($50 - Optional)
Filing a name reservation application in Rhode Island is finalized when you pay the corresponding fee of $50.
Name reservation prevents another business structure from using your preferred business name before you are ready to register your LLC. Your reservation lasts for 120 days.
Expenses Following the Approval of Your LLC
Once the LLC has been approved by the state, there are additional expenses you have to cover. These include the following:
1. Business License (Depending on the Line of Business - Mandatory)
The Rhode Island Division of Business Services has no state-level business license fee.
There are also divisions within Rhode Island that regulate and issue state licenses for specific industries, including financial services, building, design, and fire industries.
You will need a professional license if your job requires technical training or any specialized education to be legally performed.
I had a client who was required to obtain a professional license to operate their law firm in the state.
2. Annual Report Fee ($50 – Mandatory)
A $50 annual report fee must be filed with the Rhode Island Department of State for an LLC in Rhode Island. You can submit this through the online filing system.
The fee is typically due between September 1st and November 1st. The Rhode Island Department of State charges a $50 penalty fee for failure to file on time.
As per Ibis World statistics, employment in Rhode Island has grown at an annualized rate of 1.8% over the five years to 2023, surpassing the national average of 1.2%, demonstrating the state's robust employment growth [3].
3. Operating Agreement (Optional but Recommended)
A Rhode Island operating agreement isn’t required by law; however, getting one for your business entity is a good idea. These are legal documents that set the rules for how an LLC will run, including member’s rights and responsibilities.
An operating agreement does not entail any cost unless you use an online LLC formation service to draft one for your business.
Since I’ve been comparing the costs in each state, I discovered that the price for an operating agreement drafted by an online formation service ranges between $100 and $200.
4. DBA Name ($50 - Optional)
To do business under a name different from your registered LLC name, business entities can register a Doing Business As Name with the state, which costs $50.
You can register as many DBAs as you want but you have to file a separate registration for each name. The DBA doesn’t have to be renewed.
5. Certified Copies ($10 + $0.15 per additional page - Optional)
You can order any certified copies of your LLC documents from the business services department, including your Rhode Island Articles of Organization, legal documents, and more, for $10 plus 15 cents per additional page [4].
Certified copies can be ordered by mail, phone, or in person. Unfortunately, I wasn’t able to get copies online since the state doesn’t offer online ordering.
6. LLC Certificate Of Good Standing ($22/Online - $20/Mail - Optional)
You can order an LLC certificate of good standing from the business service division for $22 online or $20 by mail, phone, or in person.
A good standing certificate shows your LLC complies with Rhode Island filings and fees.
I advise clients to acquire a Certificate of Good Standing since businesses are often required to provide one if applying for a loan, being a part of legal proceedings, or registering a business in another state as a foreign LLC.
"The Certificate of Good Standing should bear a date that falls within the 60-day window prior to the submission of your LLC documents."
-Jon Morgan, Co-Founder & Chief Editor of Venture Smarter
7. Business Insurance Premiums (Optional but Recommended)
If you have one or more employees, it is advisable to include workers' compensation insurance in your LLC costs.
Workers' compensation insurance covers medical and other costs for employees who have suffered injuries in the workplace [5].
The price of your coverage will vary depending on how many employees you have and what hazards they are exposed to while working.
8. Employer Identification Number ($0 - Optional, but Recommended)
An EIN costs nothing to file and can be done online, via mail, or by phone. You will need all LLC members' full legal names and addresses, social security numbers, a formal business name, and more.
In my line of work, I always remind clients to obtain an EIN since it is used for opening a business bank account, hiring employees, and applying for loans.
Related articles:
FAQs
What Happens If I Don’t Pay My Filing Fee To The Rhode Island Government?
If you don’t pay your filing fee to the Rhode Island government, the Secretary of State won’t accept and file your Articles of Organization, and you won’t have LLC status. You may also need to pay a fee if you don’t file your annual report.
How Much Does A Rhode Island Business Bank Account Cost?
How much a Rhode Island business bank account costs varies depending on the bank. Some banks charge around $10 to $20 in monthly fees, while others do not.
References:
- https://www.sos.ri.gov/divisions/business-services/business-basics/costs-and-fees
- https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-RI.pdf
- https://www.ibisworld.com/united-states/economic-profiles/rhode-island/
- https://www.sos.ri.gov/divisions/business-services/order-certified-copies
- https://dlt.ri.gov/workers-compensation
