How to set up an LLC for your rental property in Rhode Island

If you’re a landlord or real estate investor in Rhode Island, you’ve probably heard many times that setting up an LLC for your rental property can be a smart move. But what does that really mean in the Ocean State? How do you form an LLC here, and is it worth it for your rental business? 

In this guide, we’ll walk you through everything you need to know about how to set up an LLC for a rental property in Rhode Island. We’ll cover the basics of what an LLC is, the specific steps and costs involved in Rhode Island, and some important considerations unique to landlords in the state. Plus, we’ll touch on related topics like annual reports, EINs, and how an LLC compares to other options like an S corp or umbrella insurance.

Let’s dive in so you can make an informed decision about protecting and managing your rental property business.

What is an LLC and what does it protect you from as a landlord?

An LLC, or limited liability company, is a type of business structure that combines the simplicity of a sole proprietorship or partnership with some liability protection benefits usually associated with corporations. For landlords, this means your rental property business is considered a separate legal entity from you personally. 

This separation may help protect your personal assets—like your home, savings, or car—from lawsuits or debts related to your rental properties. For example, if a tenant sues over an injury on your rental property, your personal assets might be shielded because the LLC owns the property, not you directly, but this depends on proper LLC use and circumstances. It’s a good idea to consult an attorney for specific advice.

However, it’s important to remember that an LLC does not protect you from all risks. It won’t shield you from personal negligence or fraud, and it doesn’t replace the need for solid insurance coverage.

How to set up an LLC for a rental property in Rhode Island: a step-by-step guide

Setting up an LLC in Rhode Island is a straightforward process, especially if you’re comfortable handling some paperwork. Here’s how to do it:

1. Choose a name for your LLC

Your LLC’s name must be unique and comply with Rhode Island naming rules. This means it must include “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.” It cannot be deceptively similar to existing business names registered in Rhode Island.

You can check name availability using the Rhode Island Secretary of State’s business search tool.

2. Designate a registered agent

Rhode Island requires your LLC to have a registered agent with a physical address in the state. This person or business is responsible for receiving legal documents and official mail on behalf of your LLC. You can act as your own registered agent if you have a Rhode Island address or hire a registered agent service.

3. File articles of organization

The Articles of Organization is the official document that creates your LLC in Rhode Island. It includes basic info like your LLC’s name, address, registered agent, and the LLC’s purpose (which can be broad, such as “to engage in any lawful business”).

You can file the articles online through the Rhode Island Secretary of State’s business portal or by mail. 

4. Pay the LLC filing fee

Along with your Articles of Organization, you’ll pay a filing fee the first time you set up your LLC. More on costs below.

5. Create an operating agreement (optional but recommended)

Rhode Island doesn’t require an operating agreement, but it’s a good idea to have one. This document outlines how your LLC will be managed, ownership percentages, and other important rules. It helps prevent disputes down the line.

6. Obtain an EIN for your LLC

An EIN, or Employer Identification Number, is like a Social Security number for your LLC and is required if you plan to open a bank account or hire employees. You can get an EIN for free from the IRS online. More on this later.

7. Register for state taxes (if applicable)

While rental income is typically reported on your personal tax return, if your LLC has other business activities or employees, you may need to register with the Rhode Island Division of Taxation.

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

Understanding the financial side is important when deciding how to set up an LLC for a rental property. Here are the main costs to consider in Rhode Island:

• LLC filing fee: The fee to file your Articles of Organization is $150 as of 2025. This is a one-time cost when you form your LLC.
• Annual report fee: Rhode Island requires all LLCs to file an annual report each year with the Secretary of State. The fee for this report is $50. The report is due by November 1 each year.
• Registered agent fees: If you hire a registered agent service, expect to pay between $100 and $300 annually.
• Operating agreement: If you hire a lawyer to draft this, costs can vary widely. You can also create a simple one yourself using templates.

Compared to other states, Rhode Island’s fees are moderate. Keep these ongoing costs in mind when budgeting for your LLC.

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

In Rhode Island, processing times for forming an LLC are generally quick. If you file your Articles of Organization online, you can expect approval within 3 to 5 business days. Paper filings mailed in may take up to two weeks.

Rhode Island also offers expedited processing for an additional fee if you want your LLC formed faster.

What are articles of organization and how to file articles of organization in Rhode Island

The Articles of Organization is the foundational document that officially creates your LLC. Think of it as the LLC’s birth certificate. It includes:

• The LLC’s name
• The address of the principal office
• The registered agent’s name and address
• The LLC’s duration (usually perpetual)
• The purpose of the LLC (can be general)
• The names and addresses of the LLC’s organizers

To file the Articles of Organization in Rhode Island, you can:

• Submit online via the Rhode Island Secretary of State’s business filing portal
• Mail a completed form to the Secretary of State’s office with your filing fee
• Deliver in person to their office in Providence

Filing online is the fastest method.

Do I need a lawyer to start an LLC in Rhode Island?

You do not need a lawyer to start an LLC in Rhode Island. Many landlords and investors complete the process themselves, especially if they have just one or two properties and a straightforward ownership structure.

That said, while many start LLCs without a lawyer, consulting one can be valuable for personalized advice, especially if you want help drafting your operating agreement, have multiple owners, or want to understand liability protections, tax considerations, and compliance requirements specific to Rhode Island.

For most landlords, the official state resources and guides are sufficient to get started on your own.

How to get an EIN for an LLC that owns rental property

Once your LLC is formed, you’ll want to get an EIN from the IRS. This number is necessary if you want to open a bank account in your LLC’s name, hire employees, or file certain tax forms.

Getting an EIN is free and can be done quickly online through the IRS EIN application page.

You’ll need your LLC’s formation details handy, including the name and address.

Do LLCs need annual reports and other ongoing compliance in Rhode Island?

Yes, Rhode Island requires LLCs to file an annual report every year by November 1. The report confirms or updates your LLC’s contact information, registered agent, and other details.

The annual report fee is $50. Failure to file can result in penalties or administrative dissolution of your LLC.

Besides annual reports, keep good records of your LLC’s finances and activities. While Rhode Island doesn’t have a separate business license requirement for most LLCs, your rental properties may require local permits or inspections.

S corp vs LLC for landlords: a quick comparison

Some landlords wonder if an S corp might be better than an LLC for holding rental properties.

• An LLC is simpler to set up and maintain, provides liability protection, and offers flexible management.
• An S corporation is a tax election you can apply to an LLC or corporation. It can offer tax advantages for active businesses with employees, but rental income typically doesn’t qualify for those benefits.

Many landlords find that holding rental properties in a standard LLC is often easier and more suited to real estate investing. For specific tax questions, always consult a tax professional.

LLC vs umbrella insurance for rental property risk management

An LLC offers legal separation between your personal assets and your rental property business, but it doesn’t replace insurance. 

Umbrella insurance policies provide extra liability coverage on top of your Rhode Island landlord insurance, protecting you from large claims or lawsuits that exceed your primary policy limits.

For a detailed look at the differences, check out our article on LLC vs umbrella insurance. Combining both an LLC and strong insurance coverage can be an effective way to protect your rental investments in Rhode Island.

When does it make sense for landlords in Rhode Island to use an LLC?

An LLC often makes sense if:

• You want to separate your personal assets from your rental properties
• You own multiple properties and want to keep them organized
• You want to simplify property management and estate planning
• You want to present a professional business entity to tenants and lenders

It may be less necessary if you own only one property and have minimal liability concerns, but even then, many landlords find the peace of mind worth the small costs.

If you’re unsure, consider consulting a qualified Rhode Island real estate attorney or tax advisor who understands local laws for personalized guidance.

Next steps: protect your rental property the Rhode Island way

Now that you know how to set up an LLC for a rental property in Rhode Island, consider reviewing your insurance coverage to match your risk profile. Combining an LLC with the right landlord insurance can help protect your investments and your personal finances.

Setting up an LLC in Rhode Island can be a smart step for many landlords. With a bit of preparation, you may help protect your rental properties and enjoy the benefits of a formal business structure.