Rhode Island C Corporation Formation
How it Works
Lauren Roberts, Esq.
Joshua C. Black
Rhode Island C Corporation Formation
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Why use UpCounsel to form an S-Corp in Rhode Island
Starting an S-Corp in Rhode Island with a business startup attorney on UpCounsel is easy, informative, and cost-effective. In just three simple steps, our S-Corp attorneys will help you protect your business and personal assets, and help you organize your business for state and federal compliance for an S-Corp.
When forming an S-Corp in Rhode Island with UpCounsel, the attorney you choose to help you will conduct a business name search for your Rhode Island corporation and assist you in preparing your S-Corp Operating Agreement, along with providing other legal services based on your needs. Once your Articles of Incorporation have been prepared and successfully filed with the Rhode Island Secretary of State, your Rhode Island corporation has been formed and begins its existence as a Corporation entity.
Requirements for Forming a Rhode Island S-Corp
Choosing a Company Name for Your S-Corp
One of the first steps in the process of forming your CA S-Corp is to choose your business name.
The business name that you choose must contain the words "Incorporated" or "Inc." It must be distinguishable (not the same as or deceptively similar to) the name of an S Corp or foreign S-Corp reserved or registered.
Your S-Corp name may contain the name of one or more members.
By using UpCounsel, you can choose several business names in order of preference. Your attorney of choice can then conduct a name check for your Rhode Island S Corp before filing to see which names are available. Once you have chosen an available name, your chosen S-Corp attorney can help you properly register your name with the State of Rhode Island.
Articles of Incorporation: When forming an S-Corp in Rhode Island, the Articles of Incorporation must be filed with the Rhode Island Secretary of State. Rhode Island state law requires that certain information be included in your Articles of Incorporation when forming your Rhode Island S-Corp.
This information must include:
- The S-Corp's name.
- The effective start date of the Articles.
- The S-Corp must appoint a statutory agent designated to for its' service of process. The Original Appointment of Statutory Agent (incorporated into the Articles form) must provide the agent's name and address as well as the agent's signature accepting the appointment.
- The number of shares the S-Corp is authorized to issue.
- The amount of initial stated capital.
Additionally, a Rhode Island S-Corp formation generally requires inclusion and/or consideration of the following:
S-Corp Operating Agreement: Although the S-Corp Operating Agreement is not required with the Articles of Incorporation, it is a good idea for every S-Corp with more than one member to have one. The Articles of Incorporation may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. Rhode Island recognizes operating agreements as governing documents.
Membership: A S-Corp must have one or more members.
Eligibility Requirements: A natural person or an entity.
Procedure for Membership: The member may acquire an interest in the S-Corp directly from the S-corp at the time of formation and, after formation, at the time provided in and upon compliance with the Articles of Incorporation or the operating agreement or, if not provided, only upon the vote of a majority in interest of the S-Corp members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the S-Corp's operating agreement.
Business Licenses: Business licenses and/or permits are required for most S-Corp's offering specific professional services. Contact the Rhode Island State Corporations Commission for specific licenses.
Resident Agent needed for a Rhode Island S-Corp
Remember every Rhode Island S-Corp must have a registered agent in Rhode Island, which is the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit. The statutory agent may be a Rhode Island resident or business entity authorized to do business in the state. However, the registered agent must have a physical Rhode Island street address.
Rhode Island Secretary of State
Once you create an S-Corp in Rhode Island, the Rhode Island Secretary of State will require that certain recurring responsibilities and duties be fulfilled. The most important of these are explained below.
For further information, contact the Rhode Island Secretary of State.
Annual Report: Each S-Corp shall provide an annual report to the Rhode Island Secretary of State regarding its financial condition to each of its members. The report must be filed each year between January 1st and March 1st, starting the year following the S-Corp's filing of the Articles of Incorporation with the Secretary of State. The filing fee is $50.
Records: Each Rhode Island corporation must keep the following records open to inspection at its office:
- Accounts of record
- Minutes of the proceedings of the incorporators, shareholders, directors and committees of the directors.
- A record of the shareholders, including their name and addresses and listing number and class of shares issued or transferred to them.
- A signed "Incorporator's Statement" showing the names and addresses of the initial directors who will serve on the board until the first annual meeting of shareholders.
Filing Fees for a Rhode Island S-Corp
The minimum filing fee is is $230.00 for less than 75,000,000 shares of authorized stock. Also, the filing and reservation of the S-Corp's name is $50. These fees can change so it would be best to check with the Rhode Island Department of State on what the latest fees are. You may pay these fees in many different forms including cash, check, money orders, or debit and credit cards.
Taxes for a Rhode Island S-Corp
Rhode Island C Corporation shareholders do not report any of the business income and expense on their individual tax return. The corporation files tax returns and pays its income taxes (at generally lower tax rates than would individuals) while the individual shareholders report and pay personal income taxes only on monies paid them by the corporation.
It should be noted that shareholders are required to pay personal income taxes on income from dividends paid by a C Corporation even though income taxes have previously been paid by the corporation. This leads to what is commonly referred to as "double taxation".
Rhode Island state law follows federal law for income tax purposes. Therefore if a corporation is classified as an association taxable as a C Corporation for federal income tax purposes, so will it be taxable as a corporation for state tax purposes.
Federal Income Tax: For federal income tax purposes, a C Corporation is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.
Rhode Island State Income Tax: Rhode Island imposes both a business corporation tax and a franchise tax.
Federal Tax Identification Number: Your corporation will need to obtain a federal tax identification number, which is also known as an Employment Identification Number (EIN). You do not need to get a new EIN after the corporation choose to become a S-Corp. An EIN is similar to an individual's social security number. You will need an EIN for your S-Corp as long as there is one member, even if the S-Corp does not have employees. For certain tax filing requirements the attorney you choose on UpCounsel can help prepare your Federal Tax ID Application, if you have not done so already.
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