Rhode Island has a consistently developing economic and business infrastructure, as well as one of the best import/export systems in the nation to make doing business within the state an efficient and stress-free process. This has resulted in many people deciding to choose Rhode Island as a place to fulfill their lifelong ambitions by beginning their entrepreneurial journey.
If you are looking into starting your own company, registering a business in Rhode Island is a very smart choice. It has a straightforward and efficient process, and a huge focus on helping support small businesses so they can flourish.
There are many different development centers that have helpful resources to aid your small business in fulfilling its potential in Rhode Island, and even internationally should you choose to scale your business to this magnitude.
With comparatively low corporate tax rates, above-average salaries, and household income, a good labor market, a low unemployment rate, proximity to large consumer markets, and affordable Rhode Island Secretary of State registration and filing fees, it is not surprising why so many people decide to register a business in beautiful Rhode Island and start their journey to entrepreneurial success.
How to Register a Business Name in Rhode Island – 7 Easy Steps
The Rhode Secretary of State makes it pretty easy to register your business name. There are three ways you can do this:
- 1. Do it yourself directly on their website.
- 2. Pay a document filing company that can register everything online for you – there is a modest fee for this but it saves a lot of time and ensures it is done correctly.
- 3. Hire an attorney or accountant to file and register your new company – there are higher fees associated with this.
Step 1 – Determine your registered name
Firstly, you must determine that your business name is unique and not being used by someone else. A business registration company can do this research on your behalf or alternatively, you can search directly on the Rhode Island Secretary of State website.
Once you have established your name is available you can register a business name in Rhode Island directly on their website if you are comfortable with the process. Or, if you want a company to do this for you that specializes in this, you can use an online registration service to do it.
These document filing companies usually offer a free registered agent service for one year with most of their packages which is often a necessity for new businesses and those being registered by foreigners with no U.S. address.
Before doing any of this, you must decide on the right structure.
Step 2 – Choose the right entity
You need to choose the right type of business to register and the most common options are a limited liability company (LLC) or an incorporated company (Inc.). If you are keeping things really small and simple (one or two people), then you may consider a sole proprietorship or a general partnership.
Even if you plan to be a solopreneur, it is usually more beneficial for you to register a Rhode Island LLC to make sure, as the owner, you have limited liability under this structure, and so you can benefit from the pass-through tax advantages.
Here is a quick rundown of the various options and what they might mean to you:
- Limited Liability Company: A Rhode Island LLC is often the best route for most entrepreneurs because the structure comes with personal asset protection, no double taxation, is fairly easy to maintain and does not have high registration or annual renewal costs. Through LLC formation you have better tax flexibility and income can be taxed as a pass-through entity like a sole proprietor or partnership, or as a corporation.
- Incorporated Company: A Rhode Island Corporation offers personal asset protection and your company can own property, vehicles, incur liabilities, and is responsible for its own debts and can conduct business without the owners risking their personal assets such as their homes, cars, personal savings, retirement, etc. Alternatively, owners of sole proprietorships or partnerships face unlimited liability for both business and personal assets.
Step 3 – Make sure your name is not being used by another company
This may seem obvious, but if you check the Rhode Island Secretary of State website and see that your chosen business name is available, that may seem fine, but that doesn’t mean someone else is not using that same or similar name, particularly in another state.
Many people register an “official business entity name” and trade under a different name. This is called a Rhode Island dba, or “doing business as” name or assumed trading name, and needs a separate DBA certificate.
You will want to do a Google search for your official name and your desired trading name (if different) to make sure no one else is using this name. Most importantly, you will want to make sure you can get an easy-to-remember website domain name that is not being used by someone else.
Having an awesome name or trading name for your business can be crucial to your success, so making sure the domain name is available too, and registering it right away, is equally as important.
Finally, if you go to the Rhode Island Secretary of State website and discover that someone else has registered the name you would like, you can search for variations of that name by adding a word before it or after it, or using some other variations until you find a name that is available and acceptable for you.
Step 4 – Request an Employer Identification Number (EIN)
Once you have registered your new business in Rhode Island you will need to get an EIN for a number of reasons. These include paying taxes for your business, opening a bank account, obtaining credit cards or lines of credit, establishing terms with vendors and suppliers, hiring employees, and more.
There are only a few instances where you likely won’t need an EIN. More often than not, many business activities are just not possible without having an EIN.
An EIN is the business equivalent of a social security number and is used to track your business dealings. Even if you do not intend to hire employees, you will almost certainly still need an EIN for your Rhode Island company and it protects you from having to use your social security number.
For more information on how to get an EIN number in Rhode Island use our guide where you will find downloadable forms and links to the online process with the IRS.
An EIN (also known as a federal tax id) is free to obtain from the IRS, and you can apply online but if you are not comfortable filling in forms you can use a third-party document filing service to do this for you for a small fee. This ensures you are 100% compliant with the law and they handle everything with the IRS.
Step 5 – Obtain the Required Business Licenses and Permits
To operate your business in Rhode Island you must comply with federal, state, and local government regulations. Rhode Island law does not require a small business owner to have a “general” license to operate.
You will, however, need specific permits for specific businesses. For example, if you open a restaurant or similar food-related business you will most likely need a health permit, sales tax permit, facilities permit, and others. If you plan to sell alcohol, you will need a liquor license, essentially it all depends on the type of products and services your business is going to offer.
You must find out how to obtain the necessary Rhode Island business licenses and permits, this link will allow you to search for your type of business and its location in order to familiarize yourself with the permits and licenses your business may require to operate in Rhode Island. You can also access the relevant forms you will need to complete.
Alternatively, you could hire a professional document filing company to do this for you. It eliminates a lot of time and hassle and ensures you are correctly complying with Rhode Island law. After all, Rhode Island has no single generic business license that will ensure compliance with all requirements.
Step 6 – Determine Your Business Employer Requirements
There are several things you need to check regarding your responsibilities as an employer in Rhode Island because there are requirements you must meet at the federal and state level. These could include various workforce commissions, safety, and state tax obligations, as well as labor law requirements including the minimum wage in Rhode Island and employee rights and remedies under the Rhode Island minimum wage act.
To learn more about Rhode Island employer resources take a look at the Rhode Island Division of Labor website.
Step 7 – Open a Business Bank Account for your Rhode Island Company
As a new business owner, you should seriously consider separating your personal and business bank accounts to make it easier to track and account for your income and expenses. For certain business types, such as an LLC or a Corporation, it is essential that you open a separate business bank account to maintain your liability protection.
Once you have your EIN and your company registration documents, coupled with your driver’s license, you are ready to go to the bank and open your checking account.
Don’t worry, this won’t be expensive or leave you burdened with hefty monthly fees to pay – there are many free business bank accounts out there for you to choose from. Each has its different features and benefits, so you can decide what bank and checking account best suits your needs.
Summarizing Registering a Business in Rhode Island
Rhode Island has a reputation for having a very good small business climate, which is evident in the number of small businesses operating within the state in relation to Rhode Islands’ fairly low population, with over 20% of the state’s entire population employed by small businesses.
This has all become a reality due to the state’s constant focus on aiding and boosting small businesses through the various small business development centers, grants, and advisories, offering free business advice to the extreme benefit of aspiring and current entrepreneurs.
Small businesses are thriving in Rhode Island and have done for a number of years due to its low state taxes (7% flat corporate income tax rate), an endlessly growing and developing and stable state economy, affordable and readily available commercial retail, and office space commercial, retail, and office space for businesses to succeed in, above-average per capita personal income, high salaries, a great college-education system (43.4% college-educated) which, in return, produces highly-skilled workers, and an incredible import/export market.
The state fee for registering a business in Rhode Island is $150 for an LLC and $230 for a corporation. The annual filing fee to maintain your LLC in Rhode Island is $50 online and it is the same for corporations, $50.
The Ocean State is committed to your success and has many resources at your disposal that you can take advantage of.
Resources for Small Businesses in Rhode Island
Whether you decided to register as an LLC, Corporation, Partnership, or simply as a Sole Proprietor in Rhode Island you are going to need to tap into the resources available to you to drive your small business forward.
Rhode Island has a number of small business development centers that are dedicated to supporting business owners. This covers everything from crafting business plans to navigating the state’s tax codes. Visit the Rhode Island Small Business Development Center website to find out more.
Not only are there small business development centers tailored around working with small businesses and startups for growth and development, but SCORE volunteer business professionals and expert mentors are readily available and are free to use for those looking to begin or further their entrepreneurial journey.
Here are some additional small business resources in Rhode Island:
- Rhode Island SCORE: SCORE volunteer business professionals and expert mentors are readily available and are free to use for those looking to begin their entrepreneurial journey.
- Rhode Island SBA: The U.S. Small Business Administration (SBA) helps small business owners and entrepreneurs pursue the American dream. The SBA is dedicated to small businesses and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.