This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the Rhode Island Division of Taxation and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris’ and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the city or town where the business will operate.
Start with a statewide corporate business name search.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+Rhode Island” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
Note: Rhode Island provides a one-stop business portal through the Rhode Island Business Assistant. Based on answers to questions about your new business, the Business Assistant will recommend forms and links to local, state and federal agencies.
Sole proprietors and general partners should register for Trade Names or DBAs (“doing business as” names) for their business with the Rhode Island city or town clerk where the business will be based. Find a Rhode Island City Clerk.
In the state of Rhode Island, filing a Trade Name with a City Clerk does not guarantee a business sole rights to the use of that name. Other businesses in the county and state may also register the same Trade Name. Registered businesses are expected to legally defend their trade names.
Business License Registration
Sole proprietors and general partners do not have to apply for a state business license in Rhode Island. Residential house cleaning businesses should check with the local city clerk’s office for licensing requirements.
In Rhode Island, a general partnership is created when two or more owners form an oral or written agreement to start a business together. General partners are not required to file any documents with the Secretary of State. It is advisable for general partners to file a Trade Name or DBA in the city or town where the business is based. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Sole proprietors and general partners are not required to register with the Rhode Island Division of Taxation. According to the Division of Taxation “Entity Filing Requirements” form, “the filing of the first return is sufficient notice to establish an account”.
Cleaning services are not taxable in the state of Rhode Island. Residential house cleaning businesses do not have to collect and send sales taxes to the Division of Taxation.
Sole proprietors and general partners pay tax on business income to the state of Rhode Island through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in Rhode Island (on Form RI-1040ES) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the Rhode Island Division of Taxation at (401) 574-8829 (select option #3).
Rhode Island general partnerships that file a Federal partnership information Form 1065, may need to file state income tax Form RI-1065. Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected Rhode Island City Licenses
Cranston Business License: The city of Cranston does not require a business license (or trade name registration) for housecleaning services.
Pawtucket Business License: http://www.pawtucketri.com/business-pawtucket-english
Providence Business License: https://council.providenceri.gov/city-clerk/trade-names/
Warwick Business License: https://www.warwickri.gov/city-clerks-office/pages/general-questions-and-forms (trade name certificate)