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Establishing a business in Rhode Island with all the required licenses and permits can be a complicated endeavor, with specific requirements varying by location, operating structure and industry. Understanding where to look for the information you need to begin the process can help you focus your efforts and get the ball rolling.
We researched state laws, local ordinances and federal regulations to create this guide to obtaining and maintaining a Rhode Island business license.
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1. Legally Form Your Business
When applying for a Rhode Island business license, you should establish a business entity. You’ll need to select a business structure, such as a limited partnership or limited liability company (LLC). Some types of businesses must apply to the IRS for an employer identification number (EIN). While not all businesses are legally required to obtain an EIN, it can be helpful, as many business license applications ask for one.
Registration starts at $150 when you officially file your business with the Rhode Island Department of State’s Business Services Division. While registering is not required for all business forms (e.g., it’s not required for sole proprietorships or general partnerships), choosing to set up a corporation or an LLC in Rhode Island can lead to tax benefits and legal protections.
To simplify the process, those looking to establish an LLC should consider working with one of the best LLC services in Rhode Island. This can help ensure your paperwork is complete and meets all state requirements.
2. Determine Which Licenses You Need
There are different levels of licensing authorities for businesses within Rhode Island, including state, local and federal bodies. Which licenses your business needs and at which tier depends on elements such as the type of the business, its location and local laws and ordinances.
State Licenses
In Rhode Island, businesses operating in the state do not need to apply for a state-level business license. Nevertheless, they may be obligated to acquire other kinds of licensure, as laid out below.
Sales and Use Tax Permit
Whether operating in person or online, a business selling taxable goods or services in Rhode Island may need to obtain a sales and use tax permit through the Rhode Island Division of Taxation’s Department of Revenue. This credential authorizes the collection of sales tax on such goods or services for payment to the state.
The business may need to get such a permit in other states, as well. In 2018, the Supreme Court’s decision in South Dakota v. Wayfair, Inc. opened the door for states to collect sales tax from any businesses that are selling online to their residents and that have a sufficient economic connection to the state (e.g., meet a certain threshold of sales in the state in a set period).
If your Rhode Island business is selling goods or services online and/or between states, consider speaking with a qualified attorney or tax professional to determine your sales tax obligations.
Professional Licenses
Some businesses in Rhode Island require more than just a standard business license. If your business involves specialized training, public safety or regulated expertise—such as in health care or finance—you may need to meet additional requirements.
Anyone engaging in business requiring a professional license must meet certain licensing standards set by a state board or regulatory agency. This often includes passing a state or national exam, paying fees and undergoing a background check. For instance, applicants for physician licensure in Rhode Island must pay a fee of $1,090. Maintaining your license may require renewal fees or continuing education.
Examples of professions that require professional licensure in Rhode Island, along with the licensing entities, include:
City, Town or County Licenses
Some geographic areas within Rhode Island have separate credentialing requirements for businesses that apply in addition to state or federal laws. For example, businesses in Providence require a business license from the local board of licenses.
The specifics of these ordinances and regulations vary widely, so it’s wise to consult local government offices for more information.
Federal Licenses
Some types of businesses require federal licenses in addition to state or local requirements. This usually applies to industries regulated by the federal government. For example, businesses involving firearms, agriculture or transportation across state lines are subject to federal licensing.
You can visit the U.S. Small Business Administration website for a complete list of industries requiring federal licensing.
3. Gather Required Documents
A significant phase of applying for a Rhode Island business license is collecting all the documentation and evidence required to demonstrate that your business meets the legal, regulatory and operational requirements for licensure, such as getting an EIN for your LLC—whether you’re running a sole proprietorship or a formally registered entity.
Depending on the nature and structure of your business, such supporting documentation might include:
- Proof of professional licensure (if applicable)
- Business entity certificate (evidencing creation of your LLC, corporation, etc.)
- Employer identification number or Social Security number
- Zoning approval (if operating a storefront)
- Proof of insurance coverage
- Recent bank statements
Make sure to read your application instructions closely to ensure you gather all necessary paperwork.
4. Apply for Licenses and Permits
After you’ve collected the needed documentation and identified the licenses your Rhode Island business needs, you can begin the application process. You might be able to submit each application online, by phone or in person, but the options vary by the issuing authority.
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5. Maintain Compliance
Securing your business license is enough to get started, but every license comes with ongoing compliance requirements. Staying on top of your obligations can ensure your license stays active and will help you avoid penalties or suspension.
Follow these suggestions to stay compliant.
- Check your license expiration dates and pay any renewal fees on time. For example, attorneys actively practicing in Rhode Island must renew their license each year for a fee of $200.
- Keep your contact details and business information current with the appropriate state agencies.
- Submit required filings such as annual reports or financial disclosures as mandated.
- Complete any continuing education course requirements. Report and/or certify course completions through the licensing agency’s reporting system.
- Stay up to date on state, federal or local regulatory changes that may impact your business.
- Respond promptly to any notices of violations or other compliance issues.
Frequently Asked Questions (FAQs)
How many steps are there to get a business license?
The number of steps to get a business license varies by location and industry, but it generally includes the five steps outlined above. Some business forms may be subject to additional licensing requirements.
How can I get a copy of my business license?
You can request a formal business license copy through the licensing entity. This can often be requested online or by contacting their office directly. Some agencies have created business account portals that allow you to download a license copy without filing a request. There may be a payment required for license copies.
Is a business permit the same thing as a business license?
A business permit and a business license are often used interchangeably. The name used often depends on the issuing government agency. In general, a license typically grants general permission to operate, while a permit applies to specific activities such as building use or signage.