Starting a small business in Rhode Island often means registering with several federal, state, and local agencies. Let’s review common Rhode Island business license registrations so your business starts off right.

Related: Guide to starting a business in Rhode Island

Setting Up the Business

Before you can apply for business licenses, you should first establish the business structure. This decision impacts your legal responsibilities, taxes, and how much personal liability you might face. Here’s a brief explanation of each type of structure:

Sole proprietorship: This is the simplest form of business structure, where one person owns and runs everything. There’s no separation between the owner and the business, meaning the owner is personally responsible for all debts and legal actions against the business. Taxes are straightforward as the owner reports business income on their personal tax return.

General partnership: Similar to a sole proprietorship, but with two or more people running the business. Partners share profits and losses, and like sole proprietors, they are personally responsible for the business’s debts and legal issues. Partnerships also don’t pay taxes as a separate entity; instead, each partner includes their share of profits or losses in their personal tax filings.

Corporation: A corporation is a more complex entity that is separate from its owners, providing personal liability protection. Owners, known as shareholders, are not personally responsible for the corporation’s debts or legal problems. Corporations can raise money by selling stock and are taxed separately from their owners. This entity requires more requirements, like having board meetings and record-keeping.

Limited Liability Company (LLC): An LLC blends elements of sole proprietorships, partnerships, and corporations. Owners (members) have limited personal liability for business debts and actions. Like sole proprietorships and partnerships, an LLC can pass income directly to owners to avoid double taxation, a common issue with corporations. This structure offers flexibility in management and less strict requirements than a corporation.

What Licenses Do Rhode Island Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Rhode Island may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

Business License

There is no general state of Rhode Island business license, however, many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does.  Below are a few cities that have licensing requirements. 

• Providence: The City of Providence licenses businesses such as mobile vendors, private detectives, pawnbrokers, and several others. The cost of a business license in Providence varies depending on the type of business being licensed.
• Cranston: The Cranston Committee on Safety Services and Licenses issues licenses for businesses such as establishments selling alcohol, bowling alleys, flower vendors, antique sellers, and several others. 
• Pawtucket: Business licenses in Pawtucket are only required for certain businesses such as second-hand shops, auto repair shops, mobile food vendors, businesses selling alcohol, and a few others.  

Trade Name Registration

While not a business license, it’s common for sole proprietorships and partnerships in Rhode Island to operate under a business name that is different from the full name of the owner(s). You can register for a Trade Name (also known as a Doing Business As or DBA) with the City or Town Clerk’s Office where the business is located.

Building & Zoning Permits

• Zoning: Zoning regulations in Rhode Island are established by local governments (cities and towns) to control land use and development within their jurisdictions. Depending on the business’s location, it’s important to verify whether it needs an occupancy permit or has specific zoning regulations to follow. Also, depending on city requirements, home-based businesses may need to apply for a home occupation permit. Zoning permits are typically obtained from the local planning or zoning department within the city or town’s government offices.
• Building Permit: If a facility is being constructed or renovated, a building permit may be needed from the city or county building and planning department. Permit applications are typically submitted to the local building department where the project is located. In Rhode Island, these departments are usually found within the city or town’s government offices.
• Signage Permit: Signage regulations in Rhode Island are primarily governed by local ordinances, which may vary by city or town. These regulations control the size, placement, and type of signs to ensure public safety and community aesthetics. Sign permit applications are usually submitted to the local building department or zoning office, depending on the jurisdiction.

Sales Tax Permit

Retailers of tangible personal property need to register for a sales tax permit (also called a seller’s permit) from the Rhode Island Division of Taxation.

Resale Certificate

Businesses purchasing merchandise to resell will usually want to obtain a Rhode Island Resale Certificate (also called a wholesale license) from the Rhode Island Department of Revenue to not pay sales tax for merchandise they are ressling to their customers.

Professional License

A variety of occupations in the state are regulated and need to be registered, such as accountants, landscapers, auto body repair, brewpubs, and many more.  Additional information, fees, and licensing requirements for professions are available from the State of Rhode Island Department of Business Regulation.

In addition to professional licenses from the Department of Business Regulation, businesses in a variety of industries, such as food establishments, daycares, salvage yards, and many others also require licensing.

Employer Identification Number (EIN)

Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.

There is no cost for an EIN, and it only takes a few minutes to get.

Learn how to apply for an EIN

Next Steps

These are some of the most common business licenses a new business in Rhode Island will need to register for. While it’s a good start, there are so many different licenses that may be needed, be sure to double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.