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How to Set Up a New Business in Rhode Island

Published By Janet Gershen-Siegel at June 24th, 2019

How to Set Up a New Business in Rhode Island

Starting a Business in Rhode Island

A new business in Rhode Island is not out of reach. So have you been wondering: how do I start a business in Rhode Island? And more importantly, can I do so no matter what the economic conditions are? Can I start a new business in Rhode Island during a recession?

New Business in Rhode Island: Advantages and Disadvantages

Business Insider puts Rhode Island in its middle ten states for starting a new business, per a 2016 article. This is for the whole country. There are few startup companies in Rhode Island. But opportunity is high.

This small state is also close to Connecticut and Massachusetts. Therefore, it can easily draw highly educated employees from either neighboring state.

Rhode Island has a high ranking for key economic indicators like economic output per job, productivity growth, and high tech share of all businesses. The state also has an extremely educated and tech-savvy workforce.

Recent Declines

In 2018, Forbes names Rhode Island to its number 43 slot. Also in 2018, Fit Small Business says Rhode Island belongs in the number 40 spot. Of course keep in mind the three sites all have differing methodologies.

Forbes says Rhode Island has a better than average quality of life. But for all of the other metrics, it’s worse than the average.

Fit Small Business agrees that Rhode Island has a good quality of life. Access to capital is in the top ten for the nation. The labor market is better than average. Labor market is a measure of the desirability of an area and the number of people with bachelor’s degrees. But the costs of starting a business are worse than average. And Rhode Island stumbles in three other areas: taxes, cost of living, and startup activity.

In fact, for cost of living, Rhode Island doesn’t rank much better than neighbors Connecticut and Massachusetts, both of which rank far better according to Fit Small Business.

Only you can decide if it’s worth it to start a business in Rhode Island.

Start a New Business in Rhode Island – Top Industries in Rhode Island

While the high tech sector in Rhode Island is one of the state’s brighter spots, manufacturing is increasingly gaining strength there. This is as a result of the state’s commitment to supporting its continued development. Rhode Island also has taken solid steps to specifically help small businesses.

New Business in Rhode Island: Initiatives

These include launching an initiative to support job creation in the small business sector. It also includes putting strong support behind a program meant to increase credit accessibility for small startup businesses.

Rhode Island Business Ideas

Smart business owners can find new opportunities. Work with bigger industries in the state. Offer goods or services such as trucking for any industry and computer support.

Here is exactly how to start a new business in Rhode Island.

Rhode Island New Business Secretary of State Requirements

Register a Business Name

Check business name availability on the Rhode Island Secretary of State’s website.

Business Permits and Licenses

A list of professional licenses is on the State of Rhode Island webpage. A list is also on the Rhode Island Department of Business Regulation.


Corporation names must be unique. Do an extensive search to find out a name is available.

Start by searching online records and other archives and catalogs such as the database of registered Rhode Island corporations. It is available at the official Rhode Island government website.

Corporate Name Reservations

If business owners want to reserve a corporate name, they will need to submit a name reservation application to the office of the Rhode Island Secretary of State.

Download this application form at Reserve a Rhode Island Corporate Name on the Rhode Island Secretary of State website. There is a fee of $50.00 to reserve a name and then the name remains reserved for 120 days.

Local Permits and Licenses

Check with your local municipality, city or county office or website. See if there may be any local licensing or permit requirements.

For example, in Providence, go to the Board of Licenses page on the city of Providence website.

Start a New Business in Rhode Island – Business Registration

Be sure to visit the Rhode Island Department of State online business portal. It will guide you through the steps and forms that you will need.

Tax Registration

So go to the Business Registration page of the Division of Taxation.

Start a New Business in Rhode Island – Virtual Offices

Alliance offers Rhode Island virtual business office space in Providence and Warwick only. However, the state is so small that these cities should fit most if not all business owners’ purposes.

For other areas of the state, if a business owner absolutely cannot travel, they can try Regus. Note: virtually all of Rhode Island is within a one hour drive of every other part of Rhode Island.

Or ask local business owners. Also, try computer user groups for help in this area. More options may be virtual business office space in neighboring states. These are Connecticut and also Massachusetts.

Start a New Business in Rhode Island – Establish Business Credit

Small business credit is credit in a business’s name. It doesn’t link to an entrepreneur’s individual credit, not even if the owner is a sole proprietor and the sole employee of the small business.

As such, an entrepreneur’s business and consumer credit scores can be very different.

The Benefits

Because business credit is distinct from personal, it helps to secure a small business owner’s personal assets, in case of court action or business bankruptcy.

Also, with two distinct credit scores, a business owner can get two different cards from the same vendor. This effectively doubles buying power.

Another benefit is that even new ventures can do this. Visiting a bank for a business loan can be a recipe for frustration. But building company credit, when done properly, is a plan for success.

Individual credit scores depend upon payments but also additional considerations like credit use percentages.

But for company credit, the scores really only depend on whether a business pays its invoices timely.

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Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

The Process

Growing business credit is a process, and it does not occur without effort. A small business needs to actively work to build business credit.

However, it can be done readily and quickly, and it is much more rapid than developing individual credit scores.

Vendors are a big aspect of this process.

Accomplishing the steps out of order will lead to repetitive denials. No one can start at the top with business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Start a New Business in Rhode Island – Company Fundability

A small business must be fundable to credit issuers and merchants.

Hence, a small business will need a professional-looking website and e-mail address. And it needs to have website hosting from a company such as GoDaddy.

Additionally, company telephone numbers must have a listing on

Additionally, the business telephone number should be toll-free (800 exchange or the equivalent).

A company will also need a bank account dedicated solely to it, and it needs to have all of the licenses essential for operation.

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Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Working with the IRS

Visit the IRS web site and acquire an EIN for the company. They’re free of charge. Select a business entity such as corporation, LLC, etc.

A business can begin as a sole proprietor. But they will most likely want to switch to a form of corporation or an LLC.

This is in order to diminish risk. And it will make the most of tax benefits.

A business entity will matter when it involves tax obligations and liability in the event of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and tax obligations. Nobody else is responsible.

Sole Proprietors Take Note

If you run a small business as a sole proprietor, then at least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the business name. As a result, you can wind up being personally liable for all business financial obligations.

Also, according to the IRS, by having this structure there is a 1 in 7 chance of an IRS audit. There is a 1 in 50 chance for corporations! Prevent confusion and significantly decrease the chances of an Internal Revenue Service audit simultaneously.

But don’t look at a DBA filing as being anything more than a steppingstone to incorporation.

Starting Off the Business Credit Reporting Process

Begin at the D&B website and obtain a cost-free D-U-N-S number. A D-U-N-S number is how D&B gets a small business in their system, to produce a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the small business. You can do this at If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.

By doing so, Experian and Equifax will have activity to report on.

Vendor Credit

First you should build trade lines that report. This is also known as vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.

new business in Rhode Island Credit Suite2 - How to Set Up a New Business in Rhode Island

And with an established business credit profile and score you can start to get retail and cash credit.

These varieties of accounts tend to be for the things bought all the time. Like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are generally Net 30, versus revolving.

Hence, if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, such as within 30 days on a Net 30 account.


Net 30 accounts need to be paid in full within 30 days. 60 accounts have to be paid completely within 60 days. In comparison with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you used.

To launch your business credit profile the proper way, you ought to get approval for vendor accounts that report to the business credit reporting agencies. Once that’s done, you can then make use of the credit.

Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit – It Makes Sense

Not every vendor can help like true starter credit can. These are vendors that will grant an approval with negligible effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want . of these to move onto the next step, which is retail credit.

Retail Credit

Once there are 3 or more vendor trade accounts reporting to at least one of the CRAs, then move onto retail credit. These are companies which include Office Depot and Staples.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the business’s EIN on these credit applications.

Fleet Credit

Are there more accounts reporting? Then move to fleet credit. These are businesses such as BP and Conoco. Use this credit to buy fuel, and to repair and maintain vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the business’s EIN.

952082  CTA Request Recession Business Credit Building 1 1 012121 - How to Set Up a New Business in Rhode Island

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Cash Credit

Have you been responsibly handling the credit you’ve up to this point? Then move onto more universal cash credit. These are companies such as Visa and MasterCard. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

These are often MasterCard credit cards. If you have more trade accounts reporting, then these are doable.

Start a New Business in Rhode Island – Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any mistakes as soon as possible. Get in the practice of checking credit reports. Dig into the details, not just the scores.

We can help you monitor business credit at Experian and D&B for 90% less.

Update Your Information

Update the information if there are mistakes or the details is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to dispute any errors in your records. Errors in your credit report(s) can be taken care of. But the CRAs usually want you to dispute in a particular way.


Disputing credit report mistakes usually means you send a paper letter with copies of any proof of payment with it. These are documents like receipts and cancelled checks. Never send the original copies. Always mail copies and keep the original copies.

Fixing credit report mistakes also means you specifically spell out any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.

Start a New Business in Rhode Island – A Word about Business Credit Building

Always use credit smartly! Never borrow beyond what you can pay back. Monitor balances and deadlines for repayments. Paying on time and completely will do more to boost business credit scores than almost anything else.

Building company credit pays off. Good business credit scores help a small business get loans. Your loan provider knows the small business can pay its financial obligations. They know the company is authentic.

The company’s EIN connects to high scores and loan providers won’t feel the need to ask for a personal guarantee.

Business credit is an asset which can help your small business for years to come.

Learn more here and get started toward opening a new business in Rhode Island.

Want to start a new business someplace else in America? Then check out our handy guide to starting a business in any state in the country.

Rhode Island’s Response to COVID-19

The SBA announced it is offering low-interest federal disaster loans for working capital to Rhode Island small businesses suffering substantial economic injury as a result of COVID-19.

For businesses, municipalities, K-12 and other entities, Microsoft is providing six months of Office 365 tools for free to enable remote collaboration, file sharing and video conferencing. They’re also offering free assistance to set up these tools.

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