How to Dissolve an LLC in Rhode Island

Dissolving a business often involves complex procedures. However, for a limited liability company in Rhode Island, dissolving it takes a handful of paperwork. When an LLC is formed in Rhode Island, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in Rhode Island. LLCs must file the Articles of Dissolution with the Rhode Island Secretary of State like the formation certificate was filed at the time of forming an LLC in Rhode Island. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

How to Dissolve an LLC in Rhode Island

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: Rhode Island LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started.

Dissolution of Rhode Island LLC requires three broad procedural steps. Having a Rhode Island LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the Rhode Island Secretary of State.

Step 1: Follow the LLC Operating Agreement in Rhode Island

When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-

First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.

All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
After that, a formal date for dissolving the LLC will be decided.
The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
Finally, the creditors of the business are notified, and the debts of the business are settled.

This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC in Rhode Island.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. Rhode Island registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services in Rhode Island that we strongly recommend for you.

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Step 2: Close All Tax Accounts

Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts, especially business entity tax accounts, are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.

You must contact all government entities and clear the amount of outstanding taxes due by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the process of shutting down your LLC.

Some of the common taxes that limited liability companies have to pay are:

Unemployment insurance tax
Employee withholding tax if your LLC has employees.
If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.

Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close their accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required. That is why the LLC owner should go through the sales tax guide and hire an accounting service.

Tax clearance

While dissolving the Rhode Island LLC, the owner is not required to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.

The IRS form for the LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in Rhode Island to file the BOI Report. The Beneficial Ownership Information (BOI) in Rhode Island is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

Step 3: File Articles of Dissolution

There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a Rhode Island Articles of Organization, one has to file Rhode Island LLC Articles of Organization. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.

First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the Rhode Island Secretary of State physical office along with the state filing fee.
If you want to dissolve Rhode Island Foreign LLC then look for the Foreign LLC Dissolution process.
You must fill in all the important and legal information in the form, so you should be extra careful.
After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
After filling in every detail, one should submit the form through an official mail address and make a payment.

Filing	Forms and Details
Online Applications	Sign in to SOS
Offline Applications	LLC Articles of Dissolution
SOS Contact (if offline application is available)	Division of Business Services, 148 W. River Street, Providence, RI 02904
Filing Time	5 to 10 working days
Filing Fee	$50

The LLC you own is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in Rhode Island

Apart from these three steps, no major dissolution rules are there in Rhode Island. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.

Winding Up

Some purposes of LLC require some attention even after dissolution, known as winding up. The task of winding up includes.

For a certain period, the property of a business requires preservation.
If there is any civil case against the LLC, then the owner needs to finish them.
Settle all the existing disputes of LLC.
Transfer all the property of the LLC to the names of partners.
Release all the liabilities that the LLC owes to others.
Rightful distribution of all the assets among members, according to their percentage of partnerships.

Cost of Dissolving LLC

LLC costs in Rhode Island include the formation as well as dissolution fees. To dissolve an LLC in Rhode Island, LLCs have to file an Article of Dissolution. The filing fee is $50. The details are mentioned in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for direct account transfer through your prepaid accounts.
LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction the state will make.

After Dissolving Your LLC

After you dissolve an LLC in Rhode Island, you can reinstate or revive the same within a given time. In Rhode Island, the LLC name will be available up to 1 year. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in Rhode Island if that is available. According to the Rhode Island SOS, you can revive your LLC within 10 years.

Reasons Behind Dissolving an LLC in Rhode Island

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in Rhode Island, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in Rhode Island

With the population of 1,110,822, Rhode Island is one of the favorable places to start an LLC. According to several reports, starting an LLC for Electronics Repair can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in Rhode Island.

Electronics Repair
Tourist Activities
Business Consulting
Short-Term Stay Rentals
Professional Services

Rhode Island LLC Dissolution Review – A Quick Recap

Here’s a recap of the steps you must follow when dissolving your Rhode Island LLC. Click on the steps in this list if you want to read the full details.

Follow Your Rhode Island LLC Operating Agreement: Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
Close All Tax Accounts: Make sure you close all your tax accounts to avoid incurring further costs.
File Articles of Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

How do I dissolve an LLC in Rhode Island?

To dissolve an LLC in Rhode Island, you must file Articles of Dissolution with the Rhode Island Secretary of State.

What forms do I need to file to dissolve an LLC in Rhode Island?

You will need to file the Articles of Dissolution form with the Rhode Island Secretary of State.

Is there a filing fee to dissolve an LLC in Rhode Island?

Yes, there is a filing fee to dissolve an LLC in Rhode Island. Currently, the fee is $50.

What information do I need to include in the Articles of Dissolution in Rhode Island?

You will need to provide the name of the LLC, the date of dissolution, and the signature of an authorized person.

How long does it take to dissolve an LLC in Rhode Island?

Once the Articles of Dissolution are filed, it usually takes a few business days to process.

Can I file the Articles of Dissolution online in Rhode Island?

Yes, you can file the Articles of Dissolution online through the Rhode Island Secretary of State’s website.

Do I need to notify all members and creditors when dissolving an LLC in Rhode Island?

Yes, it is recommended to notify all members and creditors of the LLC’s dissolution.

What happens if I don’t properly dissolve my LLC in Rhode Island?

If you fail to properly dissolve your LLC in Rhode Island, you may still be responsible for filing annual reports and taxes.

Are there any tax implications when dissolving an LLC in Rhode Island?

There may be tax implications when dissolving an LLC, so it’s recommended to consult with a tax professional.

Can I reinstate a dissolved LLC in Rhode Island?

Yes, you can file an Application for Reinstatement with the Rhode Island Secretary of State to reinstate a dissolved LLC.

Do I need to close all business accounts when dissolving an LLC in Rhode Island?

Yes, it is important to close all business accounts and notify banks of the LLC’s dissolution.

Can I transfer assets out of the LLC before dissolving it in Rhode Island?

It is advisable to consult with legal counsel before transferring assets out of the LLC to avoid any liabilities.

How do I notify the IRS when dissolving an LLC in Rhode Island?

You will need to file a final tax return and check the box indicating that it is the final return for the LLC.

Can I dissolve an LLC in Rhode Island if it has outstanding debts?

Yes, you can dissolve an LLC in Rhode Island even if it has outstanding debts, but you will still be responsible for settling those debts.

What is the process for distributing assets to members when dissolving an LLC in Rhode Island?

You will need to follow the distribution procedures outlined in the operating agreement of the LLC or state law if no agreement exists.

Can I dissolve an LLC in Rhode Island if it is involved in active lawsuits?

It is recommended to resolve any pending lawsuits before dissolving an LLC in Rhode Island to avoid any legal complications.

Do I need to cancel my LLC’s registered agent when dissolving it in Rhode Island?

Yes, you should notify the registered agent of the LLC’s dissolution and cancel their appointment.

Can I convert my LLC into a different business entity when dissolving it in Rhode Island?

Yes, you can convert your LLC into a different business entity during the dissolution process in Rhode Island.

Do I need a certificate of good standing to dissolve an LLC in Rhode Island?

A certificate of good standing is not required to dissolve an LLC in Rhode Island, but it may be beneficial when settling debts or obligations.

Can I dissolve a foreign LLC doing business in Rhode Island?

If your LLC is registered as a foreign entity in Rhode Island, you will need to follow the state’s dissolution procedures for foreign entities.

Do I need to notify the Rhode Island Department of Revenue when dissolving an LLC?

Yes, you should notify the Rhode Island Department of Revenue of the LLC’s dissolution to settle any outstanding tax obligations.

Can I dissolve an LLC in Rhode Island if it has employees?

If your LLC has employees, you will need to settle any outstanding payroll taxes and notify employees of the dissolution.

Do I need to submit a final report to the Rhode Island Secretary of State when dissolving an LLC?

You do not need to submit a final report, but you should keep records of the dissolution for your own records.

Can I dissolve an LLC in Rhode Island if it owns real estate?

If your LLC owns real estate, you will need to transfer or sell the property as part of the dissolution process.

Can someone else dissolve my LLC in Rhode Island on my behalf?

Only an authorized person, typically a member or manager of the LLC, can file for dissolution on behalf of the company in Rhode Island.

Do I need to notify vendors and suppliers when dissolving an LLC in Rhode Island?

Yes, it is recommended to notify all vendors and suppliers of the LLC’s dissolution to settle any outstanding debts.

Do I need to publish notice of the LLC’s dissolution in a Rhode Island newspaper?

There is no requirement to publish notice in a newspaper when dissolving an LLC in Rhode Island.

Can I distribute assets to members before filing the Articles of Dissolution in Rhode Island?

It is recommended to wait until after the Articles of Dissolution are filed before distributing assets to ensure all liabilities are settled.

Can creditors object to the dissolution of an LLC in Rhode Island?

Creditors have a limited window to object to the dissolution of an LLC in Rhode Island, but they must do so in writing to the Secretary of State.

Can I withdraw my Articles of Dissolution after filing in Rhode Island?

Once the Articles of Dissolution are filed, you cannot typically withdraw them, so it’s important to be sure of the decision before filing.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. This article shared the general steps. Let us know if you have any queries.

How to Dissolve an LLC in Rhode Island