Registering a New Business in Rhode Island
Starting a Business in Rhode Island? Here’s Everything You Need When Registering Your Business in the Ocean State.
Rhode Island is a historically rich and unique location to visit and settle down. The state offers urban hubs like Providence and Newport, collegiate cities such as Bristol, and small towns like Warwick. This landscape offers the perfect home base for all kinds of businesses. No matter where you choose, we have the resources to register a business in the state. So if starting a business in Rhode Island is on your agenda, read on for our clear and simple Nine-Step Guide to Registering a Business in Rhode Island.
Ready to jump-start this process and skip all the reading? Reach out to one of our PRIME advisors for a free consultation!
Forming a Business in Rhode Island: Nine Easy Steps
When it comes to helping you register a new company, this state is ready to help. The Start Your Rhode Island Business Guide educational guide is a comprehensive, state-specific resource for forming your new entity. However, to speed up the process, we have narrowed down the main points into a simple nine-step plan.
- Plan your business concept
- Organize funding and designate a financial model
- Designate a business structure
- Register your business entity with the state
- Set up business accounts and cards
- Obtain insurance
- Organize licenses and permits
- Hire employees
- Promote and market your Rhode Island business
Step 1: Plan Your Rhode Island Business Concept
The first step in the creation of a new entity is to write a thorough business plan. This process encourages the owners to consider a strategy for setting the business apart from other Rhode Island entities. Some important factors to consider are the purpose, value proposition, and how to model your finances. The U.S. Small Business Administration (SBA)’s site is a great resource for concept modeling. Another option is to schedule a consultation with a PRIME advisor for personalized help setting up your business in Rhode Island.
You must choose a name when creating a business entity. You can check to see if your desired name is available through the Rhode Island Business Portal. Additionally, you should complete a Google search to make sure your desired name does not get confused with another business.
Other important factors to consider before starting a business are finding a location and conducting market research. It is important to do research on these topics to make sure you are optimizing foot traffic physically and online. Some good research options are conducting surveys and doing SEO research.
*Note—although the business name is important, it’s ok to pick a name now and decide later that you want to expand to new markets or do business under another name. In that case, you will simply file for a DBA, which allows you to legally operate your business under multiple names. You can check out this article for more information about DBAs, or schedule a consultation with a PRIME advisor for more information.
Step 2: Organize Funding and Designate a Financial Model For Your Rhode Island Business
Business entities can not become a reality without proper and sustainable funding. To account for all of the potential costs, you will need to choose a reliable funding source. The best way to move forward in this process is to create a detailed financial plan. Will the savings come from your current job? Will you use outside funding? Will you apply for a loan from your local bank or through the SBA (Small Business Administration)?
No matter what route you take, PRIME advisors always recommend establishing business credit and keeping your business and personal funds separate when possible. To help our clients with that goal, we’ve developed a unique business credit program designed to help you build an attractive financial profile for your business quickly and efficiently.
Two Funding Options:
- Bootstrapping: This funding option requires you to use your personal savings combined with your current income to build your business
- Small business loans: This funding option is usually provided by banks or lending institutions. Although it would require repayment, it will provide you with your initial financial push.
Step 3: Designate a Business Structure
There are many advantages to registering your business as a legal entity with the state of Rhode Island. Two of these advantages include personal liability protection and increased credibility in the marketplace.
Some options for registering your business structure in Rhode Island include a sole proprietorship, a partnership, an LLC, or a corporation. These different setups come with various costs and filing requirements, so it is important to do some research.
If you’ve spent any time exploring the information on our site or had a free consultation with a PRIME advisor, you know we normally recommend registering as an LLC (Limited Liability Corporation). This option provides individuals asset protection by creating a separate legal entity. To file an LLC in Rhode Island, the cost is $150 online, by mail, or in-person. Sole proprietorship requires an individual to be an employee of the business, accepting all the risks and rewards of the business. Partnerships encourage the same structure, except the responsibility is split between two people. Finally, corporations are another option but require more intensive reporting requirements.
If you have questions about which business entity structure is right for your Rhode Island start-up, reach out to one of our advisors for a free consultation!
Step 4: Register Your Business Entity with the State of Rhode Island
No matter what business structure you choose, following these basic steps to register your business in Rhode Island will set you up for success:
- Choose a registered agent: A registered agent is an individual or entity that is designated to accept legal and tax documents on behalf of your business.
- Obtain an Employer Identification Number (EIN): The IRS will assign an EIN to identify your business for tax purposes.
- File formation documents: The required formation documents, and the associated fees, will be determined by the business structure you choose.
Reach out to a PRIME advisor and let us handle the entire process for you! Our experts know all the nuances and regulations involved in setting up businesses in Rhode Island, and we can make the entire process fast and painless.
Step 5: Set Up Business Accounts and Cards
To protect your personal assets, PRIME advisors always recommend establishing business credit. To help our clients with that goal, we’ve developed a unique business credit program designed to help you build an attractive financial profile for your business quickly and efficiently.
Regardless of the path you choose to fund your entity, there are three basic steps that all new business owners should take to optimize their financial future:
- Open a business bank account: Protect your personal assets by separating them from your company’s assets. This will also make accounting and tax filing easier and more straightforward.
- Obtain a business credit card: Build credit and access funds by opening a business credit card. This step will help you separate personal and business expenses and build your company’s credit history.
- Set up business accounting: You can use business accounting software such as QuickBooks to help you handle the books yourself, or you can hire an expert to keep things simple and clean. Whether you use specialized software or hire a business accountant, having a dedicated process makes annual tax filings much easier and helps you track the performance of your business. Looking for an expert? PRIME has an experienced staff of CPAs who specialize in helping businesses in Rhode Island and around the country keep more of their earnings through smart tax planning and strategies.
Step 6: Obtain Insurance
Business insurance helps you keep your risk under control and in the background to protect your assets.
Types of insurance include general liability insurance, workers’ compensation insurance, and professional liability insurance. A general liability policy is the most common. It is important to note, in Rhode Island businesses are required to have workers’ compensation insurance if they have one or more employees.
Step 7: Organize Licenses and Permits
To move forward with the legal entity process, you must comply with the federal, state, and local mandates. Oftentimes, this requires obtaining specific permits and licensing.
Depending on the type of business you are running, you will need to conduct a business license search.
One helpful resource to use is the US Small Business Administration (SBA) guide.
Step 8: Hire Employees
To create a successful business, you must curate a strong team. To ensure you meet Rhode Island’s’ hiring requirements, you must ensure you are legally registered with the IRS to manage hiring reporting and employee taxes.
To attract qualified candidates, think about the hiring benefits on behalf of the employees. What kind of compensation and benefits will you offer? How will you find candidates? Make sure you follow all of the relevant federal and state employer requirements.
Step 9: Promote and Market Your Rhode Island Business
Here are a few factors to consider when promoting and creating marketing material for your Rhode Island business.
Brand Development: Before advertising, you should be clear on the core values, purpose, and customer return for your company’s products and/or services.
Marketing: Tell the world about your new Rhode Island business with a great website and attractive branding and signage. Don’t forget the power of good old-fashioned word of mouth and excellent online reviews. Google My Business is a great tool to help generate online reviews and bring traffic to your business.
Social Media: There are many social media platforms that allow your business to reach its potential audience. Some of the most important include Facebook, Instagram, and Youtube.
Take advantage of the large library of information and resources on our blog, or jump on a call with one of our advisors for a free consultation. We’ll help you bring your business to life and stay with you as your business grows, offering comprehensive tax and planning services.
Registering a Business in Rhode Island: FAQs
How much does it cost to start an LLC in Rhode Island?
Registering an LLC or a Limited Partnership in the state of Rhode Island costs $150 online, by mail, or in-person.
What Type of Business Insurance Should I Get?
Types of insurance include general liability insurance, workers’ compensation insurance, and professional liability insurance. A general liability policy is the most common. It is important to note that Rhode Island businesses with 1+ employees are mandated by law to have workers’ compensation insurance.
What is a “Doing Business As” Name?
A DBA or trade name is a certificate that allows a business to run under a different name than its registered name. This is used primarily for branding purposes, and it doesn’t provide liability protection. This certificate must be filed in the county in which the business is located.
Where Can I File the Certificate for a “Doing Business As” Form?
You can find instructions for filing and the certificate here.
Registering a Business in Rhode Island: More Resources
Benefits of Using the LLC Structure