How to Start a Business in Rhode Island


With its small population, diverse economy, and low costs of living, Rhode Island is an ideal place to start a business. The state’s unemployment rate is below the national average and its taxes are lower than average as well. You’ll need to register your company with the state and file tax forms each year.

Determine the type of Business Entity

There are several different types of business structures you can choose from, including sole proprietorships, partnerships, corporations, and limited liability companies (LLCs). These structures can have an impact on what type of taxes you pay and how much liability protection you have.

Here are some things to consider when deciding which entity is right for your business:

  • Sole proprietorship: This is the simplest form of organization and offers the least amount of liability protection. As a sole proprietor, all profits and losses flow through your personal income tax return until such time as you incorporate or form an LLC.
  • Partnership: Partnerships share ownership between two or more people who contribute assets to the partnership and share in its profits. Partners may also be held personally liable for debts incurred by the partnership if their contribution does not equal their percentage interest in the company.
  • Corporations: Corporations offer greater legal protections than other entities because they limit personal liability while protecting investors from corporate dissolution through bankruptcy proceedings.

Pick a Name for your Business

Pick a name for your business. It should be simple and easy to remember. Don’t pick a name that’s too similar to another company’s name, or one that is too close to a government agency’s name. You also want to make sure you’re not infringing on any trademarks either, so it’s best to do some research before selecting a name.

Apply for an EIN.

An EIN (Employer Identification Number) is a tax identification number for businesses. To apply for an EIN, you must have a Federal Tax ID Number or Social Security Number. The IRS website has a page dedicated to applying for one. You can also visit your local Rhode Island DMV office to get it in person or call them at 888-982-4965 (Rhode Island residents) or 800-829-4933 (Out of state residents). The state requires that you provide the following information:

  • Your full name
  • Your business name
  • Your address
  • A phone number where they can reach you

Local Licenses or Permits

Once you’ve completed the steps above, it’s time to see if there are any other local licenses or permits you need to acquire. This one is easy enough: just call up your city or town hall and ask them what the local laws are. They should be able to tell you whether or not there are any requirements for businesses in general, as well as for specific kinds of businesses. In some cases, these laws won’t apply until after your business opens its doors—but they’re worth checking anyway!


The process of starting a business in Rhode Island isn’t nearly as hard as you might think! The state offers a lot of resources to help you navigate the process and get started, including a state-funded website that provides all the information needed to begin.


You’ve done all the work to get your business started, and now you have a few options. You can keep your business small and local, or you can decide to expand into other areas. Either way, we hope these tips helped!

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