Start an LLC in Alaska

Today, a limited liability company is one of the most popular business structures. Many business owners choose to form an LLC in Alaska after evaluating the economic and tax advantages of the state. 

To effectively form an LLC in Alaska, it is important to follow the procedure and comply with the law. If you don’t know yet how to apply for an LLC, there’s no problem! 

In this article, we’ll take a brief look at the basic steps to help you start an LLC in Alaska easily, including the necessary forms and fees. In addition, we’ll talk about the benefits of hiring a registered agent LLC for your company.  

Choose a Unique Business Name for an LLC

A successful Alaska business name should be memorable and concise, reinforcing the identity of the company. But creativity is only half the battle. To start an LLC, you have to make sure your name complies with state law.

According to Alaska’s LLC name rules and requirements, an appropriate name should meet the following basic criteria:

  • The presence of words or acronyms such as:
    • “limited liability company”;
    • “limited company”;
    • “L.L.C.”
    • “LLC”, etc.
  • The absence of vulgar words, as well as allusions to the connection of the company with state agencies;
  • The use of the words “attorney”, “university”, “bank”, “insurance” requires special permission, as well as the presence of an LLC licensed person;
  • The name chosen must be different from the names of other registered Alaska LLCs.

Lack of uniqueness is the most common reason for a company registration application to be rejected. Therefore, before filing formation documents, be sure to select a Distinguishable Name.

Check Name Availability

To check if the name you have chosen as an LLC in Alaska is available, perform a free Corporations Database Search.

If the check shows that the desired name is available, you may confidently add it to the Articles of Organization. However, if the name is already taken, you should improve its uniqueness by choosing a new name.

There are several ways to improve the uniqueness of the name:

  • Changing the order of the keywords;
  • Changing one or more of the keywords;
  • Adding, removing, or rearranging one or more letters or numerals;
  • Making a keyword singular, plural, or possessive;
  • Using a “creative, unusual, or artistic” spelling in one or more keywords;
  • Expressing a number differently (as Arabic numerals, Roman numerals, or words).

On the other hand, the following edits will not be considered to be major changes:

  • Special Characters;
  • Punctuation;
  • Capitalization;
  • Spacing;
  • Singular, plural, or possessive forms of the same word.

Reserve Business Name

Have you already chosen the perfect name but don’t plan to register your company yet? To protect the name from third parties, you can reserve an LLC name for 120 days for $25.

You can apply for a reservation in 2 ways:

Online

If you do not want to wait, filing online is the best option. Just fill in all the required information and pay the required fee with your credit or debit card. 

Mail

If you prefer to work with paper documents, the printed Business Name Reservation form can be mailed to:

Department of Commerce, Community, and Economic Development
Division of Corporations, Business and Professional Licensing
PO Box 110806
Juneau, AK 99811

Reservation is not a required step. You can skip this and start conducting an LLC in Alaska right away by filing Articles of Organization, which will automatically secure all rights to the company name.

Prepare an LLC Operating Agreement

After registering an LLC, you should take care of an Operating Agreement. It is an internal document of the company, setting forth the rights and responsibilities of the participants, as well as the basic operating procedures.

While Alaska law does not require LLCs to have an operating agreement, it is recommended by experts and experienced business owners. 

Here are a few reasons why you might want to get it:

  • Recognition of LLCs by the courts;
  • Increasing the efficiency of the company and standardizing its procedures;
  • Avoiding default rules by having your own ones (in case of situations such as voting, dissolution, etc);
  • Avoiding management conflicts by clearly differentiating the roles of the participants; 
  • Facilitating the resolution of disputes related to financial agreements, etc.

As a rule, the Operating Agreement contains the following points:

  • Information about the Articles of Organization;
  • Name and address of the registered agent;
  • Duration of the LLC;
  • Management;
  • Members and their contribution;
  • Procedure for admitting new members, as well as outgoing members;
  • The way profits and losses will be divided;
  • Indemnification and liability clauses, etc.

Since it is a non-binding document, you can write an Operating Agreement in two ways:

  1. By yourself. You don’t need any experience or legal training to write it. You can easily do it with one of the free templates from the Internet. However, it is better to use a template provided by a professional online business startup and customization service company. For example, LegalZoom;
  1. Hire a lawyer. If you want the most elaborate and personalized document possible, it is better to entrust its preparation to an experienced business lawyer. A professional will take into account all the peculiarities and needs of the LLC. However, many startup companies cannot afford the services of attorneys, as they can cost several hundred dollars.

Appoint a Registered Agent in Alaska

To do business in Alaska, the LLC owner should select and appoint a registered agent to ensure a smooth interaction between the state and the business. This is an essential step in LLC registration since the registered agent ensures that the company receives all official mail addressed to it on time.

According to the law, the role of a registered agent in Alaska is suitable for both individuals and legal entities authorized to do business in the state.

Individual as an Alaska Registered Agent

Any person who has a physical address in Alaska and is at least 18 y.o. may become a Registered Agent. However, he or she should be available during regular business hours to receive official correspondence in person.

If you want to learn more about this, visit the Registered Agents FAQ on the state’s official website.

Registered Agent Service in Alaska

Most professional online companies provide a registered agent service, offering excellent quality at an affordable price.

Also, if you haven’t started an LLC yet, you can get a 1-year free registered agent service by hiring a company like ZenBusiness or Northwest Registered Agent.

Obtain an Employer Identification Number

Does your company hire employees, pay taxes, or plan to open a separate bank account? Then you need to get an EIN, which is a unique 9-digit code. It is a required step in Alaska LLC formation for most LLCs.

As it is in other states, getting an EIN in Alaska is completely free. You can apply to the Internal Revenue Service (IRS) in one of 3 ways:

Fax

To get an EIN in 4 business days, download Form SS-4 to your computer, fill it out, print it, and send it to:

(855) 641-6935

Online

The fastest method to get an EIN in just a few minutes is to apply online. However, applications are only accepted between 7 a.m. and 10 p.m. EST, Monday through Friday. You will also need a valid Social Security number for a business to complete it. 

Mail

If you don’t mind waiting about 4 weeks, you can file Form SS-4

by mail. The form should be mailed to:

Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999

Open a Bank Account

Once your company is officially incorporated, it’s a good time to open an LLC business checking account, providing features such as:

  • Simplification of employee payroll;
  • Protection of the corporate veil and limited liability by clearly separating business assets from the owners’ assets;
  • Simplification of accounting, etc.

You will probably need the following documents when submitting your Bank application:

  • EIN;
  • Operating Agreement;
  • Banking resolution (for multiple members LLCs);
  • A copy of the Articles of Organization to prove operating an LLC in Alaska, etc.

File the Alaska Articles of Organization

The process of creating an LLC in Alaska begins with filing LLC formation documents, called Articles of Organization. This is the main company document of incorporation. It contains the most important information. You will probably need the following basic information to fill it out:

  • LLC name;
  • A reason why you formed the LLC (general statement);
  • An LLC’s duration or period over which the LLC will exist;
  • The name and address of registered agent;
  • Management structure;
  • The person forming the LLC is required to sign the Articles.

The cost of processing LLC Articles of Organization is $250. There are 2 ways to apply:

Online 

Visit the Department of Commerce, Community, and Economic Development’s website and open the forms page. Select “Articles of Organization” in the Limited Liability Company section, go to the online filing page, and follow the instructions.

By Mail

Download the PDF file to your computer, fill it out, and print it. Be sure to include a check or credit card payment form for the mandatory fee. Mail to:

State of Alaska
Division of Corporations, Business and Professional Licensing
Corporation Section
P.O. Box 110806

If mailed, your application will be processed within 10-15 business days. Once it is approved, you can officially begin your business in Alaska and conduct your first transactions.

Keep an Alaska LLC Compliant

Complete Tax Requirements

State Taxes

After forming an LLC in Alaska, paying business taxes becomes one of the main responsibilities of the company. However, the good news is that the state’s Tax Filing Requirements are fairly simple. LLCs do not file separate returns, nor do they pay taxes for the right to do business.

Federal Taxes

Most LLCs choose “pass-through” tax treatment, which helps to avoid double taxation. The company’s tax liability shifts to the owner who reports income and expenses on his/her personal 1040 tax returns and/or Schedule C.

Nevertheless, participants have the right to apply to the IRS to switch to the corporate tax regime.

Additional Taxes

In addition to the federal and state taxes listed, a company has to pay taxes in Alaska if it meets certain conditions. For example, if you have salaried employees, you have to file Unemployment Security Tax.

In addition, although Alaska LLC taxes do not include Sales or Use Taxes, it may be a requirement at the city or county level. Visit your local government website for more information or consult with the clerk.

Get Alaska Business Permits and Licenses

Most companies need to obtain some business licenses and permits to do business in Alaska. 

A general business license costs $50. It is valid for one year and should be renewed. To get a license, you can submit a paper application or fill out an online application.

There are also several licenses that vary depending on the business sphere. Check out the List of professional/occupational licenses

Additional Licensing in Alaska may be provided by some cities and counties. Generally, information about this is available on your local website.

File an LLC Biennial Report

To keep your business in good standing, it’s important to file an LLC biennial report in Alaska every 2 years by January 2. For example, if your LLC was incorporated in an even-numbered year, you have to file an LLC report in each subsequent even-numbered year. The same is with odd-numbered years. 

If you don’t remember the year of incorporation, you can check the Articles of Organization for this information.

Alaska charges a $100 state fee for processing the annual report, regardless of the method of filing.

Online

Filing online is a great way to save time and effort. Simply fill out the digital form and pay the required fee by card.

Mail

If you prefer the paper form, an annual report and a check for the state fee can be mailed to:

State of Alaska
Division of Corporations, Business and Professional Licensing
Corporation Section
P.O. Box 110806

In person

If you live in Anchorage, all materials may be delivered in person to:

550 W 7th Ave, Ste 1500
Anchorage, AK 99501-3567
333 Willoughby AVE, 9th FL
State Office Building
Juneau, AK 99801-1770

If you miss the annual report deadline, the state may impose penalties. The company will receive a penalty for filing after February 1. If the violation is not corrected after that, the LLC may be administratively closed.

Conclusion 

More and more entrepreneurs are choosing to hire an online service for opening an LLC in Alaska and setting it up. This is a great solution if you don’t want to be distracted or don’t like doing paperwork. 

A professional LLC service will take care of all the necessary formalities, making the launch of your business in Alaska quick and smooth. The prices of most of these websites are quite affordable. You can even form an LLC online for free by hiring an online company like IncFile. For $0, they will set up your business in full compliance with state requirements and also provide a 1-year free registered agent service.