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S 2959Civil Procedure

Courts and Civil Procedure - Procedure Generally - Causes of Action

Pauses the deadline to sue businesses that fail to register with the state until they become compliant.

Held for study
Population
Affected
15
Introduced Mar 4, 2026Committee Senate Judiciary

Plain-English Summary

This legislation changes the rules regarding the "statute of limitations," which is the deadline for filing a lawsuit. Specifically, it states that if a business or sole proprietor is required to register with the Rhode Island Secretary of State but fails to do so, the deadline to sue them is paused (tolled). The clock on the deadline will not start running until they properly register. It also includes an incentive: if a business voluntarily registers before being sued or investigated, the deadline clock starts on the date of their registration.

For younger readers

When someone needs to confront a business in court, there is usually a time limit to do so. This bill says that if a business is supposed to sign up with the state government but forgets or refuses to do so, that time limit pauses. The clock won't start ticking until the business follows the rules and signs up. This stops businesses from hiding or ignoring the rules to avoid getting in trouble for things they did in the past.

Who & Where It Applies

Impacted groups
Unregistered businessesSole proprietorsConsumersAttorneysSecretary of State
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Ensures that "bad actor" businesses cannot escape accountability for harming consumers or workers simply by failing to register with the state and waiting out the clock.
  • Strengthens the rule of law and fairness by ensuring that unregistered shadow businesses do not have legal advantages over legitimate, compliant businesses.
  • Provides a longer window for victims of corporate negligence or fraud to seek justice, particularly when dealing with entities that try to operate under the radar.
  • Could disproportionately impact small, low-income sole proprietors who may lack the resources or knowledge to navigate complex state registration bureaucracies, rather than acting with malice.
  • May allow for "zombie" lawsuits to be brought up years after an event, potentially destabilizing small business owners who made simple administrative errors long ago.
  • Does not address the underlying barriers (fees, complexity) that prevent small, marginalized entrepreneurs from registering with the Secretary of State in the first place.
For Conservatives
  • Levels the playing field for law-abiding businesses by removing a potential loophole used by competitors who operate illegally without registering.
  • Upholds the sanctity of contracts and the rule of law by penalizing entities that fail to comply with basic state registration statutes.
  • Includes a "voluntary compliance incentive" that offers a fair path to redemption for businesses to self-correct without facing immediate, indefinite liability.
  • Creates a climate of indefinite liability for business owners, removing the certainty and finality that statutes of limitations are intended to provide.
  • Could serve as a trap for the unwary, where a minor administrative oversight (forgetting to register) results in severe long-term legal exposure.
  • Expands the power of the state judicial system to dictate business timelines, potentially discouraging entrepreneurship due to fear of past liabilities resurfacing.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 22 additions

SECTION 1. Section 9-1-18 of the General Laws in Chapter 9-1 entitled "Causes of Action" is hereby amended to read as follows: 9-1-18. Effect of absence from state on limitations.

(a) If any person against whom there is or shall be cause for any action, as enumerated in this chapter, in favor of a resident of the state, shall at the time the cause accrues be outside the limits of the state, or being within the state at the time the cause accrues shall go out of the state before the action is barred by the provisions of this chapter, and does not have or leave property or estate in the state that can be attached by process of law, then the person entitled to the action may commence the action, within the time before limited, after the person has returned into the state in such a manner that an action may, with reasonable diligence, be commenced against him or her by the person entitled to the action; provided, however, that no action shall be brought by any person upon a cause of action accruing outside this state which was barred by limitation or otherwise in the state, territory, or country in which the cause of action arose while he or she resided in the state. (b)(1) Notwithstanding any other provision of law, if any person or entity, including an individual or sole proprietor required to file under § 6-1-1, is required to register with the secretary of state under title 7 ("corporations, associations, and partnerships") or § 6-1-1 and fails to do so, the statute of limitations for any cause of action arising out of the business activities of that person or entity shall be tolled regardless of whether that person or entity maintains a physical presence in this state as defined in § 7-1.2-1401 (b), and shall not begin to run until the date the person or entity becomes duly registered or authorized to transact business in this state.

(2) Voluntary compliance incentive. If the person or entity becomes duly registered or authorized to transact business in this state before the earlier of:

(i) Receipt of written notice asserting a claim arising out of such business activities; or

(ii) Receipt of written notice from any state agency of a compliance inquiry or enforcement action relating to such registration obligation, then the applicable statute of limitations for any such cause of action shall begin to run on the date of such registration or authorization; provided, however, that any such action shall be commenced within three (3) years after the date of such registration or authorization, or within the otherwise applicable limitations period measured from the date the cause of action accrued, whichever is later.

(3) For purposes of this subsection:

(i) "Person" has the same meaning as provided in § 6-1-1.1 and includes a natural person acting as a sole proprietor who is required to file under § 6-1-1.

(ii) "Written notice" includes notice delivered by electronic mail.

SECTION 2. This act shall take effect upon passage.