In Rhode Island (RI), owners of small businesses and rental or investment real estate should form a Rhode Island Limited The liability Company (LLC) to possess and operate the business or real estate. The most important basis for establishing a Limited Liability Company (LLC) is that the owners of the Limited Legal responsibility Company, who are referenced to as Members, are not accountable for the debt of the corporation. Article by David Slepkow (401-437-1100) Rhode Island DUI Attorney
This kind of limited liability feature is important when a company is not able to pay its bills or if there is a legal action for damages or personal injuries resulting from the activities of the company or the ownership of its properties. It is a good idea to hire a Rhode Island business and corporate law lawyer/attorney to set up the LLC. Many attorneys will not only organize your LLC but will also document your twelve-monthly report over a yearly basis.
The limited liability feature also is applicable to Rhode Island corporations, yet , the significant difference between a company and an LLC is the simple fact a limited liability company would not pay income income taxes on its profits as a corporation is necessary to do. Rather, if there is merely one member of the limited liability company or if the members are husband and wife, the limited liability company will be disregarded for duty purposes and the income or losses of the company will be reported on the member’s duty return. If there are members of the small liability company who are not married to each other, the limited the liability company is treated as a partnership and, again, there would be no taxation of income on the company level, but profits or losses would be reported on each member’s tax return as gains or losses from a partnership.
Forming a Rhode Island limited the liability company (LLC) requires that the following be done:
1. Pick a name for the company and verify with the Rhode Area Secretary of State’s Workplace that the proposed name is not being employed by or similar to another Rhode Island limited responsibility company.
2. Draft and file with the Rhode Island Secretary of Point out the Articles of Business of the llc. The current filing payment is $150. 00 payable to the Rhode Island Secretary of State.
3. Prepare an Operating Agreement which will establish the rules for management of the partial liability company. The Working Agreement may provide for a manager who typically is one of the members and is energized to operate the organization. A large number of limited liability companies, particularly if they are owned with a single member or a husband and partner, are member managed, that means that there would be no named manager, but that in fact the company would be controlled by its members. The Operating Agreement would also contain provisions about who is authorized to take out a loan for the company, sign actions or bills of sales, and do other activities which can be not part of the day-to-day procedure of the company. Typically, these kind of actions require the permission of all the people.
4. Get a Federal Id Number from the Interior Revenue Service. Although, there is no income taxes due from the company, a Federal Tax My spouse and i. D. Number is required to be able to file the Rhode Island Division of Taxation Pass-Through Tax Come back and would be necessary if the company has any employees. There is a minimum Rhode Isle cost as a result of Division of Taxation for every single llc in the amount of 500 usd. 00 per year.
5. Annually, a limited responsibility company must file an Annual Report. Currently, a cost of $50. 00 is payable with each Total Report.
It is important that all commercial or residential real estate held by the LLC be transferred by deed to the limited liability company. The real estate action should be prepared by a RI lawyer.