As an entrepreneur in Rhode Island, starting a new business is both exciting and daunting. On the one hand, you get to realize your dream of becoming your own boss, with no limits to how much you can succeed. On the other hand, you must also consider all the various legal paperwork and back-end details to get your new venture off the ground.
One of the most important elements to get done as quickly as possible is licensing and permitting. Without the right business license, it’s impossible to run a company in Rhode Island or any other state. But how can you be sure you’re getting the right documents, and what are the processes for obtaining them?
Well, we’re here to help you determine which licenses you need and go through the proper channels to ensure your business starts on the right track. Here is everything you need to know about how to get small business licenses and permits in Rhode Island.
Business licensing is a crucial step when starting a new company, and there are several reasons why it’s so vital. First, licensing requirements are often designed to protect consumers. For example, some licenses require testing or verification to ensure you know what you’re doing and that you’re selling high-quality products or services. So, in a way, a license helps build trust between your customers and your brand.
The second purpose of business licensing is to ensure proper taxation and fee collection for the government. Some industries are taxed more than others (e.g., alcohol and tobacco), so businesses within those industries must get the right permits. Simply put, if you don’t, your company may get dissolved by the state.
Although the terms license and permit may seem interchangeable at first, there are two specific differences between the two:
The types of licenses and permits you need will vary based on different criteria, such as:
Business Type – Some industries have more requirements than others. For example, food service and alcohol sales are tightly regulated and require specialty licenses.
Entity Type – When forming your business, you must determine the entity type, such as a sole proprietorship, partnership, LLC, or corporation. If you need help figuring out which entity works best, you can review the structure comparison from the Rhode Island Department of State (DOS).
Number of Locations – If you expand and open multiple offices or storefronts, you’ll likely need separate licenses for each location. For example, if you’re starting a restaurant and open a new location, you’ll need another food service permit and seller’s permit to collect sales tax.
Some industries are regulated at both the state and federal levels. For example, if you sell alcohol, you may need a permit from the Alcohol and Tobacco Tax and Trade Bureau as well as the Rhode Island Division of Taxation. You can browse a complete list of industries and federal agencies that oversee them, along with application requirements for each permit.
Most Rhode Island businesses will need specialty licenses and/or permits to exist legally within the state. The best tool to help you determine what you need is the Rhode Island Business Assistant. With this tool, you can choose your industry and see which state-specific requirements are necessary. Here are some common examples, though.
General Business License – Rhode Island does not require a general business license to operate within the state. Instead, you must register with the Secretary of State before opening your doors. The application form and processing fee vary based on which entity type you choose. For example, the fee for registering an LLC is $150, while a business corporation costs $230.
Seller’s Permit – If you sell products or services, you must collect sales tax on behalf of the government. For this permit, you must apply through the Rhode Island Division of Taxation. As we mentioned, you’ll need separate seller’s permits for each location of your business.
Food Service Permit – Food permits are broken down into several sections within the Department of Health. For example, if you’re opening a restaurant, your license application and fee are dependent on the number of seats. Even if the number is zero, you still use the same permit for take-out or delivery services. Food trucks and other mobile operations have a different set of requirements.
Liquor License – Liquor licenses are regulated by each city and county rather than the state of Rhode Island itself. However, you still need to obtain a Certificate of Good Standing from the state to maintain your license.
Contractor’s License – Rhode Island has a statewide licensing requirement for all general contractors operating with the state. Additionally, some cities or counties may set their own regulations. You can obtain a license from the Contractors’ Registration and Licensing Board.
Again, the Rhode Island Business Assistant is the best resource for determining which licenses you need. Some examples of other industries that require licensing include child care, healthcare, cosmetology, accounting, and many more. Simply answer basic questions about your business, and the assistant will help you with the rest.
If you need federal permits, the list provided by the Small Business Administration will connect you with the right agency and permit protocols. Keep in mind that only certain industries are regulated by the federal government, such as alcohol (and tobacco), fishing, mining, broadcasting, and energy. Industries like food service or professional services are only regulated by the state.
Thankfully, you can submit almost all licensing and permitting documents online. For example, for food service businesses, you can fill out and submit paperwork to the Department of Health. Better yet, you can submit payments online too, although there may be additional fees if you use a credit card to pay.
Before doing this step, you should read through all pertinent applications to ensure you have all the correct information. You don’t want your application to be denied because you missed a section or filled something out improperly.
Because you can submit applications online, you can also check your approval status online as well. You’ll need to create an account with the department or agency overseeing the application when you submit your paperwork. The length of time it takes to get approved varies based on the type of business you’re starting, the agency handling it, and the diligence of your application. For example, a liquor license can take as little as 40 days to process or as long as six months.
All business licenses and permits expire, but the expiration date can vary from one license to the next. Usually, you have 12 months from the date your application was approved. However, some permits (like the Certificate of Good Standing for liquor licenses) must be renewed on a specific day (December 1st), regardless of when you got it.
While most agencies will send a reminder notification about your renewal, it’s always a good idea to keep track of these dates in your own records. If you miss a renewal deadline, you’ll have to re-apply as a new business, which is often more time-consuming and expensive.
Starting a business in Rhode Island is relatively easy and straightforward. Now that you know more about the licensing and permitting process, you can move through it more efficiently and get your venture off the ground that much sooner. If necessary, it helps to get assistance from a third-party business formation service. These services ensure you don’t miss any paperwork and that you submit everything on time and in full.
If you don’t get the right permits or licenses for your business, the state can shut you down and dissolve your company. Additionally, you may be hit with fines and penalties for breaking the law.
Generally speaking, sole proprietors don’t need a business license as long as they’re conducting business as themselves. However, if you want to form an actual company with a different name, you’ll have to register with the city or county in which you operate. Sole proprietorships do not register with the Department of State.
Because there is no general business license requirement in Rhode Island, there’s nothing to renew. However, you must file an annual report with the Secretary of State. The filing period is between February 1st and May 1st every year.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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