How to Start a Limited Liability Partnership in Rhode Island | 2024 Guide

Start a Limited Liability Partnership in Rhode Island

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Rhode Island. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Rhode Island, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Rhode Island LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Rhode Island, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Rhode Island General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Rhode Island

To form a limited liability partnership in Rhode Island, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Resident Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Rhode Island, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Rhode Island business registry. Ensure that your chosen name follows Rhode Island naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Rhode Island Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Rhode Island- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Rhode Island Secretary of State business name database and Rhode Island Business Name Search. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of Not available and mail name reservation fee of $50. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, by mail and in person, which costs around $50. In addition, the DBA’s validity in Rhode Island is Indefinite, which you can file in the Rhode Island Secretary of State.

You can check out how to file a DBA in Rhode Island for clearer understanding.

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Step 3: Designate a Resident Agent

In Rhode Island, you’ll need to designate a Resident Agent for your LLP. The Resident Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Rhode Island Resident Agent Services to serve as your LLP’s Resident Agent, ensuring that they meet Rhode Island requirements.

However, If you plan to become a Resident Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Rhode Island Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Rhode Island Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Rhode Island laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Rhode Island. The default laws in Rhode Island might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Rhode Island Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Rhode Island Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Rhode Island.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Rhode Island LLP. Additionally, obtain the necessary Rhode Island Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Rhode Island to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Rhode Island Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Rhode Island, and local levels.

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Advantages of Forming a Limited Liability Partnership in Rhode Island

While the specific advantages of forming an LLP in Rhode Island can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Rhode Island:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Rhode Island.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Rhode Island may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Rhode Island.

Cost of Forming an LLP in Rhode Island

The cost of forming an LLP in Rhode Island may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Rhode Island Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Rhode Island instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership (LLP) in Rhode Island?
A limited liability partnership is a business structure in Rhode Island where partners have limited personal liability for the company’s debts.
How many partners are required to form an LLP in Rhode Island?
Rhode Island requires at least two or more individuals to form an LLP.
How do I register an LLP in Rhode Island?
You need to file a Registration of a Foreign Limited Liability Partnership form with the Rhode Island Secretary of State’s office.
What fees do I need to pay to register an LLP in Rhode Island?
The filing fee for registering an LLP in Rhode Island is $200.
What is required for naming my LLP in Rhode Island?
Your LLC name must be unique to Rhode Island, end in either “Limited Liability Partnership” or “LLP,” and cannot include certain words.
What documents do I need to file to register an LLP in Rhode Island?
You will need to file a Certificate of Limited Partnership with the Rhode Island Secretary of State’s office that includes the LLP’s official name, address, and details about each partner.
Do I need a registered agent for my LLP in Rhode Island?
Yes, Rhode Island requires an LLP to have and maintain a registered agent who lives or works in the state.
Can I change my LLP’s partner structure after registration in Rhode Island?
Yes, partnerships can add or remove partners from the LLP by submitting an amendment filing with the Rhode Island Secretary of State.
What is the liability shield for partners of an LLP in Rhode Island?
In Rhode Island, partners have limited personal liability for the LLP’s debts.
What are the advantages of forming an LLP in Rhode Island?
LLP’s offer a less rigid management structure, allows partners to separate their personal assets from those of the business, and protect individual partners from the legal actions of one another.
What’s the difference between an LLP and a general partnership in Rhode Island?
Limited Liability Partnerships in Rhode Island have more protections and restrictions than general partnerships, including limited personal liability protection.
Are LLP’s taxed in Rhode Island?
No, LLP’s are not subject to Rhode Island franchise taxation.
Is there an annual report requirement for LLP’s in Rhode Island?
Yes, Rhode Island requires LLP’s to file an Annual Report that is due every year before March 1st.
Can I convert my partnership to an LLP in Rhode Island?
Yes. You can convert your existing partnership to an LLP in Rhode Island by filing a Certificate of Conversion with the Rhode Island Secretary of State.
How do I dissolve my LLP in Rhode Island?
You can dissolve your Limited Liability Partnership in Rhode Island by filing a Certificate of Cancellation with the Rhode Island Secretary of State.
What rules apply when publishing legal notices for an LLP in Rhode Island?
LLP’s in Rhode Island must follow the guidelines set forth by the state legislature regarding publication of legal notices for partnership changes/records.
Do I need to provide financial statements with my LLP application in Rhode Island?
Though it is not a general requirement; assistance with navigating your state’s specific rules, as well, associated financial requirements may vary by state
Can an LLP be taxed as a corporation in Rhode Island?
No, limited liability partnerships in Rhode Island is not viewed as a separate taxable entity, but you should consult a tax professional to review your specific taxation rules.
How long does it take to form an LLP in Rhode Island?
It can take up to 7-10 business days to form an LLP in Rhode Island, depending on the promptness of filing and efficiency of approval.
Are LLP’s required to obtain business licenses in Rhode Island?
Yes, depending on the scope of business activities, partnerships in Rhode Island may need to obtain state and local business licenses.
Can an LLP qualify for S Corporation taxation status in Rhode Island?
No, a Limited Liability Partnership is not viewed as a separate entity for tax purposes, though you may choose some other entity type, that’s compliant for S corporation taxation status.
How much does it cost to file an annual report for an LLP in Rhode Island?
As specified by Rhode Island’s Secretary of State’sā€™ the filing fee for annual LLP report in Rhode Island is $50.
Do sate provide any id-free online resource for conducting a business entity search in Rhode Island?
Yes, to research Limited Liability Partnership in Rhode Island, you can access Secretary of State of Rhode Island’s online tool-Business search engine.
How frequently is it mandatory to file annual reporting liabilities in Rhode Island?
Like almost in all US states, filing annual reports in Rhode Island is an annual requirement.
What types of signature on the incorporation paperwork will be allowed in Rhode Island?
Rhode Island similarly allows a choice for electronic signatures. But identities will be verified by Rhode Island Secretary of State ID and access.
Who exactly oversees regulating LLP’s in Rhode Island?
Rhode Island Secretary of State bureaucrats and representatives regulate every form of limited liability company or partnership, in a continuous manner.
What is a limited liability partnership in Rhode Island?
A limited liability partnership in Rhode Island is a form of business where the partners have protection against personal liability for business debts or obligations.
How is a limited liability partnership formed in Rhode Island?
A limited liability partnership is formed in Rhode Island by registering with the Secretary of State and filing necessary forms.
What are the advantages of forming a limited liability partnership in Rhode Island?
The advantages of forming a limited liability partnership in Rhode Island include personal asset protection for the partners, pass-through taxation, and flexibility in management and ownership.
Is there a minimum number of partners required to form a limited liability partnership in Rhode Island?
No, there is no minimum number of partners required to form a limited liability partnership in Rhode Island.
Can a limited liability partnership be dissolved or transferred in Rhode Island?
Yes, a limited liability partnership can be dissolved or transferred in Rhode Island by filing the proper forms with the Secretary of State.
How much does it cost to form a limited liability partnership in Rhode Island?
The fee to form a limited liability partnership in Rhode Island is $250.
How is a limited liability partnership taxed in Rhode Island?
In Rhode Island, a limited liability partnership is taxed as a pass-through entity where the profits and losses are attributed to the individual partners.
Are there any residency requirements for partners of a limited liability partnership in Rhode Island?
There are no residency requirements for partners of a limited liability partnership in Rhode Island.
Can a limited liability partnership have a corporation as a partner in Rhode Island?
Yes, a limited liability partnership can have a corporation as a partner in Rhode Island.
How is liability of partners determined in a limited liability partnership in Rhode Island?
In a limited liability partnership in Rhode Island, partners are not personally liable for the debts or obligations of the business.
Do all limited liability partnerships in Rhode Island require a registered agent?
Yes, all limited liability partnerships in Rhode Island are required to have a registered agent.
Can partners in a limited liability partnership in Rhode Island be held liable for personal negligence?
Yes, partners in a limited liability partnership in Rhode Island can be held liable for personal negligence.
Is there a limit on the number of partners in a limited liability partnership in Rhode Island?
There is no limit on the number of partners in a limited liability partnership in Rhode Island.
Does a limited liability partnership in Rhode Island have to file an Annual Report?
Yes, a limited liability partnership in Rhode Island is required to file an Annual Report.
Are there any management restrictions for limited liability partnerships in Rhode Island?
There are no management restrictions for limited liability partnerships in Rhode Island.
What is the difference between a limited liability partnership and an LLC in Rhode Island?
A limited liability partnership in Rhode Island is typically used by professionals who engage in professional services, while an LLC is used for businesses in any industry.
Do limited liability partnerships in Rhode Island require a business license?
Yes, a limited liability partnership in Rhode Island is required to obtain a business license.
Can a partner in a limited liability partnership in Rhode Island be a corporation or LLC?
Yes, a partner in a limited liability partnership in Rhode Island can be a corporation or LLC.
Can partners in a limited liability partnership have different ownership percentages in Rhode Island?
Yes, partners in a limited liability partnership in Rhode Island may have different ownership percentages.
Who can serve as a registered agent for a limited liability partnership in Rhode Island?
A registered agent for a limited liability partnership in Rhode Island can be a person or a business entity that has a physical address in Rhode Island.
Can partners in a limited liability partnership in Rhode Island be held personally liable for certain acts?
Yes, partners in a limited liability partnership can be held personally liable for certain acts in Rhode Island, like damages caused by intentional misconduct.
What is the operating agreement for a limited liability partnership in Rhode Island?
An operating agreement for a limited liability partnership in Rhode Island is a written contract that outlines the structure, ownership, and operations of the partnership.
Is there a residency requirement for all partners of a limited liability partnership in Rhode Island?
There is no residency requirement for all partners of a limited liability partnership in Rhode Island.
What is the liability distinction between partners and employees of a limited liability partnership in Rhode Island?
In a limited liability partnership in Rhode Island, partners are not personally liable for the debts of the business, but employees can be held personally liable.
Can a limited liability partnership convert to another entity, such as a corporation in Rhode Island?
Yes, a limited liability partnership in Rhode Island can convert to another entity, such as a corporation, if the proper filings are made with the state.
Can a limited liability partnership in Rhode Island be sued as a business entity?
Yes, a limited liability partnership in Rhode Island can be sued as a business entity.
What is the difference between a limited partnership and a limited liability partnership in Rhode Island?
A limited partnership in Rhode Island has one or more general partners who are personally liable for the debts of the business, while a limited liability partnership shields all partners from personal liability for certain obligations of the business.
Are there any specific requirements for naming a limited liability partnership in Rhode Island?
Yes, the name of a limited liability partnership in Rhode Island must include the words “limited liability partnership,” “LLP,” or “L.L.P.” to distinguish it from other types of business entities.
How long does it take to form a limited liability partnership in Rhode Island?
It takes approximately 7-10 business days to form a limited liability partnership in Rhode Island after all necessary documentation is submitted.

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Conclusion

Starting an LLP in Rhode Island may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Rhode Island.

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