Find out how to qualify your LLC to conduct business in Rhode Island.
If you own a company that was founded in a state other than Rhode Island, you must qualify or register it in Rhode Island in order to conduct business there. Here’s a rundown of the criteria for qualifying your international (non-Rhode Island) limited liability corporation (LLC) to conduct business in Rhode Island.
What exactly is a Foreign LLC?
If your LLC is founded in a different state, it is referred to as a foreign LLC in Rhode Island. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. In Colorado, for example, an LLC founded in Arizona is a foreign LLC.
Doing Business in Rhode Island
If you are “transacting business” in Rhode Island, you must register your foreign company with the state of Rhode Island, according to the LLC Act. What exactly does this mean? As with other states, Rhode Island’s LLC Act does not define “transacting business” in connection to international registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
The LLC Act in Rhode Island, as in other states, stipulates some actions that do not constitute doing business in the state. Among the objects mentioned are:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts creating as borrower or lender or acquiring evidences of deficiency
The LLC Act clearly states that this list is not exhaustive; additional activities may be exempt as well. Check Section 7-16-54 of the Rhode Island General Laws for a complete legal definition of each of the listed things. If your LLC’s only operation in Rhode Island is one or more of the activities mentioned above, you should not be required to register with the state.
Registration Application
You must submit an Application for Registration with the Rhode Island Secretary of State to register your business in Rhode Island (SOS). The application form may be downloaded on the SOS website.
To complete the form, you must supply the same information that you would need to incorporate an LLC in your home state. More precisely, for a Rhode Island registration application, you must provide:
if different, the name of your LLC as registered in the state where it was formed, the name under which your LLC will conduct business in Rhode Island (a new name is required if your LLC’s original name is currently being used by a Rhode Island registered firm)
the state in which your LLC was formed, the date your LLC was formed, and the Rhode Island street address of your LLC’s resident agent
the name of your LLC’s Rhode Island resident agent
a declaration stating the Rhode Island Secretary of State will serve as your LLC’s resident agent if it lacks one or the agent cannot be located if the state in which your LLC is founded requires the LLC to maintain an office in that state the requisite office address the mailing address for your LLC a statement stating whether your LLC is member-managed or manager-managed if your LLC is manager-managed, the names and addresses of all managers
If different than the filing date, a copy of a certificate of good standing from the secretary of state or other authorized authority of the state where your LLC is established, an effective date for the application, and an authorized signature are required.
If your LLC will be providing certain sorts of professional services, you may be required to produce extra documentation. Details may be found in the application instructions. The price for filing is $150.
What Happens If You Do Not Sign Up?
If your LLC does business in Rhode Island without authorization, it will be unable to file a case in any of the state’s courts. However, not being registered does not render your LLC’s obligations null and void or bar it from defending a lawsuit in Rhode Island. Furthermore, a member of the LLC is not accountable for the debts and liabilities of the LLC only because the corporation performed business in Rhode Island without permission.
How to Form a Foreign Corporation in Rhode Island
The regulations and standards for international qualifying in Rhode Island are identical whether your company is structured as a corporation rather than an LLC. However, you will need to utilize a new Application for Registration (Form 450). For paperwork, information, and filing requirements for registering a foreign company in Rhode Island, visit the Rhode Island Secretary of State website.