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Limited liability companies (LLCs) mix corporation and partnership features. For instance, an LLC can avoid double taxation by being taxed as a partnership; corporations often have their earnings taxed and then their shareholders are taxed on dividends. But unlike general partnerships, LLCs establish lower liability for owners. You can set up a LLC on your own or with other parties. |
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Step 1 Determine whether you must register as a domestic or foreign LLC. If your principal place of business is in Rhode Island, then you are a domestic LLC. If the principal place of business is based outside of Rhode Island, then the company is considered a foreign LLC in Rhode Island. Step 2 Prepare articles of organization with Form 400. The form is available free online, though make sure that an authorized person signs the form. You must disclose the company's name, address and registered agent. A registered agent is usually an executive or a lawyer who accepts a service of process (court notice) on behalf of a company when it has been sued. Step 3 Identify whether the LLC will be member or manager managed. Members run a member-managed LLC while managers, who may or may not be members, run a manager-managed LLC. Step 4 Send the articles of organization to the office of the secretary of state along with a filing fee. In November 2009, the fee is $150. File online or send the articles by certified mail. Keep a copy of the articles for yourself. Step 5 Execute an operating agreement, which describes the LLC's purpose and other important details. For example, the agreement should discuss how a member can be added or withdrawn (e.g., death, retirement, desire to sell his interest). Although a LLC can be set up without it, the agreement will help you minimize disputes by maintaining a written reference. |
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