You might decide to launch a business company one day. If you live in Rhode Island and consider working here, one of the essential legal forms you should consider is the Rhode Island LLC operating agreement template, created for companies with limited liability (LLC).
The principal rationale of making such agreements is to describe your company and establish a set of rules that proprietors should obey. An operating agreement is a handy add-on for your business that grows mutual understanding between its members.
This legal form contains certain sections that are irreplaceable. You should include the company’s and owners’ details, including each owner’s contribution to the business, rules for managing the company, members’ functions, dissolution policies, and miscellaneous conditions. These are the basics to add to your agreement, regardless of the American state where you draw the template.
In most American states, the government will not request your operating agreement because you are not obliged to form it for your business. Despite that, entrepreneurs usually debate the company’s norms and policies and create a template.
After the template is complete, everyone who has a share in the company signs the document. Then, each member should get a copy signed by other partners. Additionally, such forms are verified by a notary public agent.
If you assume that limited liability companies cannot have only one owner, let us dispel this fallacy. Operating agreements can be either single-member or multi-member. The second type exists for a group of partners, while the first type is for those who form an enterprise independently.
A multi-member LLC operating agreement shows each member’s share and funds in a company besides the operating rules. For a businessperson who starts an entity independently, the agreement is proof of the funds invested in the business, which are separate from private properties and money.
If you are sure that you need the Rhode Island LLC agreement template, our easy-to-use form-building software will generate one for you. Use it to download the file.
In case you still have doubts about the document’s content, let’s see all compulsory sections in detail. When designing your form, ensure you have added:
The terms and features of limited liability companies are understood similarly in all states of America. However, there are slight discrepancies in the related laws in each state. Let’s begin with the basic description of such companies before we proceed to Rhode Island laws.
As it comes from the name, these entities have limited liability: their owners do not face significant risks and are liable only for their investments. This is a positive feature taken from giant corporations.
Another bonus is the possibility to choose a simplified tax regime. This is a characteristic that such companies share with smaller enterprises. The taxes are lower than they could be if it were otherwise.
Finally, the members of LLCs can include individuals and other companies alike. This can attract numerous investors to support your business.
Title 7 of the Rhode Island General Laws contains all matters tied to partnerships, corporations, and associations in the state. Chapter 7-16 is entirely dedicated to companies with limited liabilities. All definitions linked to the theme are added in Section 7-16-2.
Unlike other states, Rhode Island asks business people to have an operating agreement for their business by law. According to Section 7-16-22, each company with limited liability must keep an agreement in its office’s archives. This section also outlines other items and records each company should store.
We will mention more sections further when learning how to create such a company in Rhode Island.
The creation of companies in Rhode Island is not that hard. Read our informative guide to find out what one should do to finish the process successfully.
Create a Name
Section 7-16-9 of the Rhode Island General Laws sets requirements for your business’s name. There are two vital points:
Booking your company’s name in Rhode Island will cost you $50.
Nominate Your Company’s Resident Agent
You have to choose someone to be the resident agent for your business. This person or entity is responsible for undertaking various tasks. Usually, these tasks are tied to receiving mail from public authorities and lawsuits (if your company faces such trouble).
You can nominate yourself as a resident agent, ask someone among other members, or choose any individual who is a resident of the state. Finally, many people prefer to delegate such responsibilities to professional agencies. In Rhode Island, you can sign a contract with those having permission to operate in the state.
Remember that the person or entity you appoint should be trustworthy and responsible. If your company skips any legal letter, you may have problems in the future.
Submit the Articles of Organization or Application for Registration
Before submitting one of these forms, you have to define whether you are forming a domestic (in the state) or a foreign (outside of the state) company. The Articles for Organization is a form for domestic enterprises, while foreign entities require the Application for Registration.
These documents include the details about your company (its location, name, resident agent, specialty, and so on).
The fee remains the same for both types: when filing, you should pay $150. It is possible to apply both online and offline (via regular mail). Another way is to have an appointment in the Secretary of State office.
Make an Operating Agreement
You are already aware of the operating agreement’s importance for your business. So, the next step is to make your agreement.
Talk to your partners, create a set of norms, reflect all details in the template, sign the form, and spread the copies to other members. The content to include in such agreements is described above.
Apply to IRS for the Company’s Tax Number
Before your company starts working, you have to obtain its unique tax number. You can also see various abbreviations (EIN, FEIN, and FTIN), but do not worry: they all mean the same.
To get your business number, you have to apply to the Internal Revenue Service (or IRS). You do not have to pay for it. Application is available through the website, and we recommend doing so because your number will be ready in just 15 minutes.
After getting your entity’s EIN, it is time to work. Now, your company can pay taxes, have a bank account, get licenses and permissions for specific services and goods, hire workers, sign contracts, and do other crucial things without which no business can exist.
Remember about Reports
Some states in the US require sending reports at a specific time. Such reports reflect the company’s activity and its results during a particular period.
Rhode Island is no different: you have to report each year. The fee for Annual Report submission is $50. There is a deadline for such records. Ensure you send them in September or October. If you are late, public authorities will apply various sanctions.
You will be notified about the report two months before the submission period—your entity’s resident agent will receive a notification.