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How to Start a Business in Rhode Island Checklist:
Download this free business checklist in PDF format.
Download NowHow to Start a Business in Rhode Island:
It is relatively easy to set up a small business in Rhode Island owing to the combined online registration process, allowing you to register your business entity and sign up for taxes at the same time.
Form your business.
Review Rhode Island formation options.
Rhode Island offers 9 ways of forming your business, which we cover in detail below. Review these closely and pick the one that fits your business best.
Name your business.
Before registering your business name, you will need to do a trademark search to ensure that your potential business name has not already been trademarked. You can perform a trademark search via the U.S. Patent and Trademark Office.
After you have confirmed that your business name is not trademarked, you will need to conduct a name availability search through the Rhode Island Corporate Database to ensure that your business name is not in use or similar to another corporation registered in the state.
If you are establishing a sole proprietorship or partnership and will be using a different name to your personal name, you will need to file a "Doing Business As" (DBA) name with your county clerk's office.
If you need help finding a business name, be sure to check out NameSnack's free business name generator.
You can reserve your business name for a period of 120 days with the Secretary of State. The cost to reserve a business name is $50.00 for paper forms and $20.00 for online filing.
To conduct a name availability search on the Corporate Database, simply enter the entity name/individual name/business address/filing number, etc., and click "Search." You should receive a result immediately.
Get an employer identification number.
Nearly all businesses will need to register for federal taxes by applying for an employer identification number.
Register your business in Rhode Island.
Once you have appointed a registered agent and obtained a Certificate of Good Standing, you can register your business online with the Secretary of State (SOS).
The cost to file an LLC is $150.00 and the cost to file a corporation is $230.00.
Navigate to the Start Your Rhode Island Business page on the SOS website.
Below "STEP 2," select a filing option next to the type of business structure you want to register.
Complete and submit the form along with the filing fee.
Obtain necessary permits and licenses.
There is no general state-level business license in Rhode Island. However, you may need to acquire a business license/permit locally, depending on the nature of your business and profession.
To determine if you need a business license or permit, go to the Rhode Island Department of Business Regulation.
To research which licenses/permits you need for your occupation, visit the state's Licensed Occupations webpage.
Once you know which licenses/permits you need, apply for them online via the Division of Taxation.
Register your business for taxes.
Register for state taxes.
You will need to register for business taxes online using the combined registration service on the Rhode Island Taxpayer Portal.
On the Taxpayer Portal, create an account or sign in if you already have one.
Connect your account to your business entity.
Register for the taxes applicable to your business.
Pay the applicable fees.
Register for sales and use tax.
Sales and use taxes are imposed on the sale, rental, or lease of goods and services in Rhode Island. The tax rate for 2024 is 7% and the cost to register for a sales tax permit is $10.00 and is renewable once a year.
Register for income tax.
If you are an employer with one or more employees in Rhode Island, you will need to withhold income tax from their wages or salaries.
Register for Unemployment Insurance (UI) tax.
All businesses with employees are required to pay UI taxes to fund unemployment compensation programs in the state. UI taxes are comprised of employment security tax, job development tax, and temporary disability insurance (the latter being withheld from employees' earnings).
Register for Corporation Income (CI) tax.
All corporations, limited liability companies, and limited partnerships in Rhode Island are subject to a minimum annual tax of $400.00.
Other taxes include those for fuel, property, healthcare, alcoholic beverages, cigarettes, meals and beverages, real estate conveyance, and more. Refer to the Taxpayer Portal for more information.
Hire employees and report them to the state.
Report to the Rhode Island New Hire Reporting Directory.
All businesses with new or rehired employees are required to report them to the Rhode Island New Hire Reporting Directory within 14 days of hiring or returning to work, regardless if they are full-time, part-time, or temporary workers.
Fill out the registration form on the Rhode Island New Hire Reporting Directory website.
Sign in to your account, and fill out the new hire reporting form.
After you submit, you will receive a confirmation note.
Obtain Workers' Compensation Insurance.
Employers with one or more employees are required to carry workers' compensation insurance to provide assistance for those injured at work.
Display mandatory posters at your place of work.
There are eight mandatory labor law posters in Rhode Island to be displayed prominently in the workplace. They are available free of charge at the Department of Labor and Training (DLT).
Rhode Island Business Filing Fees:
Filing Type | Cost |
|---|---|
Reservation of Entity Name | $50.00 |
Corporation, Benefit Corporation, Workers' Cooperative | $230.00 |
Limited Liability Company | $150.00 |
Nonprofit Corporation | $35.00 |
How to Start a Business in New York State
Rhode Island Business Structures:
1. Sole Proprietorship.
A sole proprietorship is the simplest business structure. The business is owned and operated by one individual who receives all profits and is personally liable for all the debts of the business.
2. General Partnership.
A general partnership is run by at least one general partner and one limited partner. These partners manage the day-to-day business operations and are personally liable for all of the company's debts. This is the simplest form of a partnership with minimal paperwork.
3. Benefit Corporation.
A benefit corporation is run by one or more owners/shareholders and has a board of directors. Benefit corporations differ from regular corporations in that they consider the environment and society in addition to seeking profit. Shareholders have limited liability for the debts of the business.
4. Workers' Cooperative.
A workers' cooperative is owned and managed by the workers of a business. The members share the decision-making and profits of the business. The benefits of this type of business structure are that it provides better wages, offers extensive training for employees, as well as opportunities for participation in management.
5. Corporation.
A Corporation is a formal business structure with unlimited shareholders. The business is authorized to act as a single entity and is recognized as such in law, meaning that the owners are not personally liable for the debts of the business. A corporation is costly to set up and has a lot of paperwork.
6. Limited Liability Company.
A Limited Liability Company (LLC) is the most common business structure. It separates the owner/s and the company from a business and liability perspective. An LLC is the best option for a small business as it is flexible, easy to set up, and requires minimal paperwork.
7. Limited Partnership.
A Limited Partnership (LP) is similar to a General Partnership except that limited partners do not manage the business and are only liable for the amount they invest in the company.
8. Limited Liability Partnership.
A Limited Liability Partnership (LLP) is similar to a General Partnership but each partner is protected from other partners' debts and obligations.
9. Nonprofit Corporation.
A nonprofit corporation has no owners. Instead, it is governed by a board of directors. Nonprofit corporations are funded by grants, public donations, and fees for services. All funds are retained by the organization for the advancement of a social cause.
