Guide to Rhode Island’s New Limited Liability Company Act
- Rhode Island has enacted a comprehensive new Limited Liability Company Act that will overhaul the statutory framework governing business operations, operating agreements, and fiduciary duties across the state.
- The updated framework modernizes decades-old statutes by drawing upon the Revised Uniform Limited Liability Company Act.
- The legislation is scheduled to take effect on January 1, 2028, establishing specific guidelines for both new and existing corporate entities.
Rhode Island has enacted a comprehensive new Limited Liability Company Act that will overhaul the statutory framework governing business operations, operating agreements, and fiduciary duties across the state. The legislation, enacted through 2026 Rhode Island Public Laws Chapters 246 and 247, creates a new Chapter 7-16.1 of the Rhode Island General Laws, bilodeaucapalbo.com reported.
The updated framework modernizes decades-old statutes by drawing upon the Revised Uniform Limited Liability Company Act. It introduces detailed rules for management structures, voting requirements, business transactions, and member relations, signaling a major shift for closely held corporations, real estate investment firms, and family-owned enterprises.
Statutory Implementation and Transitional Deadlines
The legislation is scheduled to take effect on January 1, 2028, establishing specific guidelines for both new and existing corporate entities. Under R.I. Gen. Laws § 7-16.1-110, the new statutory framework applies directly to newly formed limited liability companies starting on that date. For companies established prior to January 1, 2028, the legislation provides a designated transition window allowing existing firms to elect coverage under the new rules. Beginning on January 1, 2029, the statute generally governs all existing Rhode Island LLCs subject to the statutory transitional provisions. Business owners are advised to evaluate their current operating agreements well before this final transition deadline occurs.
Rhode Island has enacted the Revised Uniform Limited Liability Company Act! Thank you to @GovDanMcKee for signing the bill into law, and to sponsors Representative @BrandonVoas and Senator @LaMountainLaw for their advocacy.More: https://t.co/K4cMmDdkUg pic.twitter.com/FFshxsJWLF
Fiduciary Standards and Operating Agreement Adjustments
The new Rhode Island Limited Liability Company Act addresses fiduciary duties among the important issues it covers. These obligations vary depending on whether an entity operates as a member-managed or manager-managed business.
Management Authority and Structural Restructuring
Gen. Laws § 7-16.1-407. Under the default statutory rules, extraordinary business transactions and operating agreement amendments may require unanimous member consent. Furthermore, the updated framework modifies provisions for corporate formation through a certificate of organization, replacing older terminology and governing structural changes such as mergers, conversions, interest exchanges, and domestications.