How to Dissolve an LLC in Rhode Island in 7 Steps

How to Dissolve (Close) an LLC in Rhode Island

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Carolyn Young has over 25 years of experience in business in various roles, including bank management, marketing management, and business education.

Reviewed by: Sarah Ruddle

For over 15 years, Sarah Ruddle has been a noteworthy leader in the business and nonprofit world.

How to Dissolve (Close) an LLC in Rhode Island

How to Dissolve (Close) an LLC in Rhode Island

If you have a limited liability company (LLC) in Rhode Island, you may need to shut down the business at some point. On the other hand, maybe you’ve started another company or decided to relocate to another state — whatever the reason, you’ll need to follow the somewhat complicated LLC dissolution process. 

If done incorrectly, you’ll still be responsible for annual reports and fees and could face additional penalties. But, lucky for you, this handy guide explains how to dissolve an LLC in Rhode Island. 

Properly shutting down an LLC involves several crucial steps, as detailed below.  

1. Vote for Dissolution

LLC owners, known as members, must vote to dissolve the LLC. Hopefully, you have an operating agreement that details the process to do so. If not, Rhode Island law requires a majority vote of the members based on their percentage of capital values or a judicial decree made at the request of one of the members. 

Once one of these events has occurred, you’ll draft a resolution to dissolve the LLC and keep it in your records. 

2. Cancel Business Licenses and Permits

If you were required to get licenses and permits for your business, you’d need to contact the issuing agencies to cancel them so that you’re not charged renewal fees. If you have any outstanding fees, you’ll likely need to pay them before you are allowed to cancel.

3. Notify Creditors

If you owe money to any creditors, you’ll need to notify them in writing of the dissolution and give them detailed instructions on filing any claims for the outstanding debt. Rhode Island has no clear law about how claims against the LLC are handled. You should have an attorney involved to ensure it is done correctly.

In Rhode Island, this must be done before you formally dissolve your LLC with the state.

4. Notify Tax Departments

Notify any relevant tax authorities of the dissolution and pay any outstanding taxes due.

5. Cancel Contracts and Settle Financial Obligations

If you have contracts with vendors, lessors, or any other outstanding financial obligations, you’ll need to ensure all your obligations are fulfilled and all contracts are canceled. 

6. Distribute Assets to Members

If the LLC has any assets remaining in any form after all financial obligations have been settled, they must be distributed to members based on LLC ownership percentages. If the assets are equipment, property, or other non-cash assets, they’ll need to be sold first so distributions can be made in cash. 

7. File the Dissolution Papers with Rhode Island

In Rhode Island, the process to officially dissolve your LLC is to download the articles of dissolution and mail them to the Department of State, Business Services Division. On the form, you must certify that all taxes and fees of the LLC have been paid.

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The mailing address is:

Business Services Division
148 W. River Street, Ste. 1
Providence, RI 02904.

The fee for filing the dissolution papers in Rhode Island is $50.

In Closing

Regardless of the reason, LLC dissolution must be done right to avoid legal issues and financial penalties. Therefore, it’s highly recommended that you employ the services of an attorney to ensure everything is done correctly and all bases are covered. 

FAQs

How much does it cost to dissolve an LLC in Rhode Island?

The fee for filing articles of dissolution in Rhode Island is $50.

How long does it take to dissolve a Rhode Island LLC?

The processing time in Rhode Island for articles of dissolution is generally seven to ten business days.

Should I close an unused LLC in Rhode Island?

If you have no plans to operate the LLC in the future, you should dissolve the LLC. However, you’ll still be responsible for annual reporting and fee requirements if you don’t.

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

You will remain responsible for all your LLC’s filings and fees. If you don’t keep up with them, penalties may accrue.

What is the difference between the dissolution and termination of an LLC in Rhode Island?

In Rhode Island, dissolution begins with the triggering event, such as a vote of members per the operating agreement. Termination is when all LLC activities stop, including winding up affairs and filing dissolution paperwork with the state. The filing of those documents finally terminates the LLC.