As an entrepreneur, one of the most important decisions that you have to make is the choice of entity type. If you are not familiar with the different types of business entities, then a limited liability company can be a great choice for you.
But, before you make that decision, there are a few things that you should know in order to make an informed decision and that is the essence of this guide on how to start an LLC in Rhode Island.
By the end of this guide, you will know everything that you need to know about the LLC in Rhode Island in order to make an informed decision. That way, you will not end up getting any unnecessary expenses or spending a lot of money that you might not want to invest in your new business venture.
Rhode Island has the advantage of having a small population and lots of large companies come from the state, so they are always looking for innovative methods and ways to make their small state a better place to live in.
Steps to Start an LLC in Rhode Island
1. Choose your business name
The first thing that you should do is choose your business name. In Rhode Island, there are quite a few rules and regulations that you need to follow in order to choose the right business name. You should choose something that is unique, recognizable, and an identifiable name so that people will know who the company is.
You also need to make sure that you have a good brand identity because this will help you out later on when you want to expand your business in the future. Also, it is important to make sure that your business name does not infringe on any existing copyright or trade names. The name must not contain the words “bank”, “insurance”, “trust”, “audit”, or any other restricted words.
After deciding on a name to go with, it is important that you reserve the name and secure the domain name for your business. This is done by signing with a domain name registrar and paying the required amount of money that corresponds to the name.
2. Decide on a Registered Agent to Use
One of the most important things that you need to take into consideration when you are starting an LLC, is who knows about the existence of your company. It is best for you to choose a Registered Agent in Rhode Island that can provide a physical address where correspondence can be sent and can also answer your clients’ questions and requests.
It is recommended that you choose an individual who has a good reputation in the industry and who also knows what they are doing when it comes to dealing with clients. Otherwise, you will probably end up having some problems with your clients because they will not get the services that they are supposed to receive.
In order to choose the right Registered Agent for your company, you should make sure that he or she can provide the service at a reasonable cost and also understand what type of entity you are starting.
3. File your Articles of Organization
One of the first steps in the process is to file your articles of organization for your company. In Rhode Island, you only need to file a very simple form that requires the name of your company, business address or address where correspondence will be sent, and the type of entity that you are registering. You should definitely have a registered agent before you file the articles of organization with the Rhode Island Secretary of State.
This process allows you to confirm that the company is officially registered and you are able to start operating. It also gives you a legal entity that allows you to take certain actions that your sole proprietorship cannot do.
4. File the LLC Operating Agreement
After the articles of organization have been filed, you need to file the LLC operating agreement. This is a document that will help you establish the rules and structure of your company. The operating agreement should include information such as what other owners should be allowed to take part in decisions, how profits should be distributed amongst its members, and more.
The operating agreement is also a way for you to protect your company in case of disagreements between the members. It is a contract that makes sure that all the terms of the agreement are upheld. You also need to make sure you keep an updated copy at hand in order to be able to respond when any issue arises in your company.
5. Get Your EIN
When you have your operating agreement and articles of organization filed, it is important to get a Federal Tax Identification Number known as an EIN. This number is used to identify the company when it receives any kind of financial or tax benefit.
This number can be obtained through mail or online on the IRS website. It is important to keep this number with you at all times so that if you need to apply for any financing, tax credit, or even a loan, you will be able to do so.
6. Set up your Business Bank Account
Once all the paperwork has been filed and you have your EIN ready, it’s time to open a bank account for your company. You should make sure that this account is only used for business purposes and that you do not use it for personal expenses. The only type of account that is good for a business will be a business checking account.
In order to open this account, you will need to make sure that you have all the required documentation such as a copy of your EIN and business name. You will also need to give them some information about your business so they can know what the purpose of your account is and how it is supposed to be used.
7. Protect your business with trademark and logo
One of the most important things that a business owner or entrepreneur should do is to protect their brand and their trademark. So in order to do this, you should make sure to register trademarks for your company’s products and services.
This will prevent anyone from using the same name or copying what you are doing and making money by selling the rights to it. You also need to make sure that you are using your logo properly and making sure that it is visible all over your business.
With this information on how to start an LLC in Rhode Island, you’ll discover the whole process is relatively easy. The phases of registering and doing paperwork do not take that long, but it is crucial that you make sure that you have everything in order because this will help you out in the future. This includes having an EIN and a business checking account.
If you are planning to start your own business, you should definitely keep these rules in mind and register your business with the Rhode Island Secretary of State promptly so that you can get the protection that you need.