Forming a corporation can be exciting, but it also requires following the appropriate steps. While the process can certainly be done on your own, many business owners partner with a trusted resource, like ZenBusiness, to offer guidance and assistance during the corporation setup process.
In this guide, we’ll walk you through everything you need to know about forming an Alaska corporation, offering key insights and tips along the way.
Steps to Incorporate in Alaska
- Name Your Corporation
- Appoint Directors
- Choose an Alaska Registered Agent
- File the Alaska Articles of Incorporation
- Create Corporate Bylaws
- Draft a Shareholder Agreement
- Issue Shares of Stock
- Apply for Necessary Alaska Business Permits or Licenses
- File for an EIN and Review Tax Requirements
- Submit Your Corporation’s First Report
To start a corporation in Alaska, you must file the Articles of Incorporation with your state’s Secretary of State office. To simplify the process of forming a corporation in Alaska, we’ve put together 10 easy steps for you to form your business:
Step 1: Name Your Corporation
Naming your corporation is the first step you’ll take to form your company officially. You might have a name in mind or several ideas swirling around in your head. We recommend writing down any names you or your partners are interested in pursuing, so you can run them through the next step.
Once you have your list, it’s time to see if your business name options are available. In Alaska, your corporation name should be distinguishable from other corporations. This means you’ll want to perform a quick search to ensure no other Alaska company has already secured your name.
You can do this by searching the Alaska Department of Commerce, Community, and Economic Development corporation database. Keep in mind that corporations in Alaska cannot contain certain words such as “city,” “village,” or “borough” and should not contain offensive words according to Alaska Corporation Statutes and Regulations.
After you find an available name that you and your partners have agreed upon, it’s time to add a corporation designator to the end of your name. This designator can be “Corporation,” “Incorporated,” “Company,” or “Limited.” You can also opt for abbreviations of these four words. For example, “Last Frontier Fishing” could become “Last Frontier Fishing, Corp.” or “Last Frontier Fishing, Incorporated.”
Now that you have your official corporation name chosen, you can reserve it if you wish, so no one else takes it before you’re ready to register officially. You’ll visit the Alaska Division of Corporations, Business, and Professional Licensing website to reserve your name. You can reserve your corporation name directly online for $25. Once reserved, your corporation name will be held for 120 days. If you need to extend this reservation, you can do so twice, for an additional $25 per renewal.
Here are some other factors to consider once you have your corporation name:
- DBA: If you intend to do business under another name, you may want to secure a DBA (“doing business as”) name, often referred to as a trade name or assumed name. You can easily handle this online with the Alaska Secretary of State’s website by filing for a new business license for your trade name. We’ll cover business license questions later in this guide, so stay tuned if you have questions.
- Trademarks: Next, you’ll want to consider trademarking your name. For broader protection — especially if you plan on doing business outside of Alaska — you can register any trademarks on the federal level, but you’ll need to conduct a quick search using the U.S. Patent and Trademark Office (USPTO) database to see if your name is already federally trademarked. It’s often easier and quicker to file for a trademark on the state level. If no trademarks exist for your business name, you can register a state trademark for $50 through the Alaska Division of Corporations, Business, and Professional Licensing. You’ll need to file a hard copy to:
State Office Building
333 Willoughby Avenue, 9th Floor
P.O. Box 110806
Juneau, AK 99811-0806
Step 2: Appoint Directors
The next step you’ll take is appointing directors to your corporation. You’ll need to specify at least one director (by Alaska law) to oversee your corporation’s interests. Your director(s) will help manage the corporation and must act in the best interest of the company and the shareholders.
Some states have requirements on who can serve as a director, but Alaska does not have any restrictions. You’ll need to have at least one director selected before you can file your Articles of Incorporation, although you do not have to specify your director(s).
You’ll also need to specify an incorporator, who will serve as the person to sign the Articles of Incorporation. An incorporator can also be a director in Alaska but does not have to be. An owner in the company will typically serve as the incorporator.
Step 3: Choose an Alaska Registered Agent
Now that you have a corporation name, an incorporator, and directors, you’re ready to select an Alaska registered agent. Your registered agent will serve as a third party between your corporation and the Alaska Secretary of State’s office, receiving important paperwork and communications on your behalf. You must designate a registered agent to register your corporation with the state of Alaska.
The registered agent must be an individual resident of Alaska or a corporation authorized to transact business in Alaska. To become a registered agent in Alaska, you must have a primary operating address within the state and be available between the hours of 9 a.m. and 5 p.m. to receive sensitive documents in person. You cannot use a P.O. box as your registered agent’s operating address.
While you (or a director in your corporation) can act as your company’s registered agent, you might want to work with an outside party. Although it’s legal to serve as your own registered agent, partnering with an outside agent service has its benefits. A few to consider include:
- Setting your own working hours. By Alaska law, your registered agent will need to be available and at their primary office in Alaska between 9 a.m. and 5 p.m. Acting as your own agent may leave you tied to a location or specific working hours.
- Protecting you from public subpoenas. Since legal documents can be delivered to your registered agent, having an outside party ensures these documents will be served to your agent on your behalf. If you act as your own agent, you could be served paperwork in front of clients or prospective investors, which could hurt your business deals and relationships.
Step 4: File the Alaska Articles of Incorporation
Once you’ve selected a registered agent, you’re ready to file your Articles of Incorporation. This document legitimizes your business with the state of Alaska and allows the government to officially recognize you as a corporation, so you can begin handling business.
If you are forming your business in Alaska, you’ll file as a domestic corporation (standard). If you already have a corporation that was formed outside Alaska and now want to register to do business in Alaska, you’ll file as a foreign corporation (less typical).
- The corporation name. This will include your designator.
- Your North American Industry Classification System (NAICS) code. This code designates your corporation’s industry. You can find the correct code for your business by reviewing Alaska’s full list of NAICS codes.
- Your registered agent’s name and address. You’ll need their full, legal name and operating address (must be in Alaska).
- Alien affiliates’ names and addresses. If the incorporator or directors are located outside of the U.S., they’re considered alien affiliates. If everyone is located in the U.S., you’ll write “none.”
- The number of authorized shares. You’ll need to decide on your total number of authorized shares, which will also be included in your bylaws. There must be more than zero. If there’s more than one class or series of authorized shares, you need to indicate that on the form.
- The incorporator’s name, mailing address, and signature. At least one incorporator must supply this information and sign.
There is a $250 filing fee ($350 for foreign corporations), which can be paid online or via the mail. Filing online will ensure fast authorization while filing via mail can take 10 to 15 days (or longer, depending on the time of year you file).
You can mail payments to:
State of Alaska
Department of Commerce, Community, and Economic Development
Division of Corporations
Business and Professional Licensing
P.O. Box 110806Juneau, AK 99811
Please note that as of June 2020, Alaska has waived “almost all Corporations fees” and “almost all business licensing fees” due to COVID-19 through Nov. 15, 2020, or “at the expiration of the disaster declaration, whichever is sooner.” That includes the $250 fee for filing your Articles of Incorporation. Check the Alaska Department of Commerce, Community, and Economic Development website for updates before filing.
Step 5: Create Corporate Bylaws
Next, you’ll want to hold a meeting with all shareholders, directors, and the incorporator. Here, you should discuss how your company will be run, set up shareholder rules and regulations, and denote any additional operational agreements or clauses. This discussion should be put into writing when finalizing your corporation’s bylaws.
While Alaska does not legally require corporations to have bylaws, this important document can help you secure business bank accounts and loans. You’ll also want to set up a corporate records book to keep all of your corporation’s important papers together, such as the minutes of director or shareholder meetings, stock certificates, and stock certificate stubs.
Step 6: Draft a Shareholder Agreement
Another contract you’ll want to create is a shareholder agreement. This document will contain the rules and regulations that exist between the company and its shareholders. A shareholder agreement helps ensure that shareholders are treated fairly and that their rights are protected. This is a private document that can only be accessed by the parties involved.
Your shareholder agreement should fall in line with your company bylaws and cover additional topics, such as shareholder rights and obligations, voting structures, financial regulations, and terms of adding or removing shareholders. Every shareholder must sign and agree to this document.
Step 7: Issue Shares of Stock
Next, it’s time to issue shares of stock for your company. This is a requirement and requires company oversight. When filling out your Articles of Incorporation, you noted the number of shares authorized by your company. You’ll want to make sure you issue shares at or below this amount.
To get started with issuing stocks, you’ll need capital (or funding). It’s important to understand how much capital you need to get started. From there, you can divide this amount across the available number of shares you’ll issue.
You can choose to issue your company’s shares privately or publicly. If you opt for private stock, the shares are typically dispersed across the company’s founders, shareholders, or investors, while anyone in the marketplace can purchase public stock.
Shares can only be issued one time and must be indicated on your biennial reporting. Once issued, shares can be sold or traded.
If you choose to issue public stocks, you’re required by Alaska law to file quarterly statements with the U.S. Securities and Exchange Commission (SEC). These filings will keep track of how many stocks are being issued and the parties who purchase them. You can file this form online or via the mail.
Step 8: Apply for Necessary Business Permits or Licenses
Next, it’s time to apply for a general business license. Just about every corporation in Alaska must apply for a business license before engaging in business activity. You can apply for a business license online or via mail.
To obtain your corporation’s license, you’ll need to fill out the business license application denoting your corporation name, operating address, phone number, license term, and type of company (corporation). You’ll also need to provide the NAICS code you provided in your Articles of Incorporation.
There is a $50 filing fee to obtain your state license each year. (Note that due to the current pandemic, fees are suspended through Nov. 15, 2020, or when the disaster declaration expires, whichever is sooner.)
If you choose to mail your application, you’ll send it to the below address:
State of Alaska
Department of Commerce, Community, and Economic Development
Division of Corporations, Business and Professional Licensing
P.O. Box 110806
Juneau, AK 99811
Depending on your industry, you may need additional licenses or permits. You can learn more on the Alaska corporations licensing page and perform a search to determine if your industry requires additional filings. It’s important to note that there are licenses and permits on the federal, state, and local levels, so you’ll have to do some research to determine what licensing your company needs or hire a service to do it for you.
Step 9: File for an EIN and Review Tax Requirements
Now, it’s time to set your corporation up with the Internal Revenue Service (IRS). This gets your business set up to file taxes and move money around. To get started, you’ll request an Employer Identification Number (EIN) for your corporation.
This is a mandatory step that will allow the government to identify your corporation. Think of it as your company’s Social Security number — you’ll use this number to open financial accounts, hire new employers, and fill out tax paperwork.
Applying for an EIN is fast and easy and can be completed online. Get started by visiting the IRS website and filling out the online form. The entire process takes minutes, and you’ll receive your EIN directly afterward.
Step 10: Submit Your Corporation’s First Report
To stay compliant with Alaska state laws, you’ll need to file regular reports with the state. Alaska requires corporations to file an Initial Report six months after filing your Articles of Incorporation. After that, you’ll be required to file biennially by Jan. 2.
Your Initial Report can be filed online (recommended) or via mail. You’ll need to include your corporation’s name; your operating address; directors’ names, addresses, and signatures; your registered agent’s signature; and share information. There is no fee to file this report.
Your Biennial Report can be filed online (recommended) or via mail. You’ll need to include the name of your corporation; your operating address; directors’ names, addresses, and signatures; your registered agent’s signature; and share information. There is a $100 filing fee.
How much does it cost to start a corporation in Alaska?
The administrative cost to form a corporation in Alaska can vary depending on how you file, whether you’re working with a business partner or consultant to process all paperwork, and how quickly you need your paperwork filed.
Here’s a quick look at the typical costs to create a corporation in Alaska:
- Reserve a name (optional): $25
- Register a trademark (optional): $50
- File your Articles of Incorporation: $250
- Apply for a business license: $50
This means you should expect to pay a minimum of $300 when forming your corporation, just to establish your company. This does not include the $100 biennial report filing fee you’ll need to pay two years after establishing your corporation or business license renewal fees, which vary by industry.
By partnering with ZenBusiness, you can receive help processing the above paperwork, avoiding headaches and frustrating, costly errors. With our affordable plans, we can file your paperwork with the state, serve as your registered agent, and provide a customizable template for creating your corporate bylaws.
What are the benefits of a corporation in Alaska?
When forming a company, you’ll want to be sure you choose the right company type. Forming a corporation has many benefits that can offer protection and options to increase your company’s earnings.
Some of the main benefits include:
- Protection from personal liabilities. When you form a corporation, your personal finances are separated from corporate finances, offering you full separation and protection. Even if your business went bankrupt, your personal finances would be secured.
- Creating an official business. Many clients and investors will feel more secure working with you once you’re recognized as an official corporation versus an independent contractor or consultant.
- Ability to issue stocks. Corporations allow you to have unlimited owners, which makes it easier to sell more stocks over time. This can help you raise the capital you need to get started initially and offers the ability to grow and expand over time.
- Recognition outside of the country. If you’re interested in doing business globally, forming a corporation is your best option since it allows you to operate outside of the United States.
Some disadvantages to forming a corporation include:
- Double taxation. Whenever your company earns a profit, you must pay corporate taxes on this profit. Any amount of profit distributed to shareholders will also be taxed on the individual level, resulting in double taxation.
- Comprehensive reporting and record keeping. It’s essential that you stay on top of business reporting requirements with a corporation and may even need to hire a full-time accounting company or outside partner like ZenBusiness to handle all filings required to keep you compliant. One important bookkeeping regulation regards shareholder meetings. Under section 10.06.430 of the Alaska Corporation Statutes and Regulations, all minutes, names, and records from shareholders meetings must be kept on file.
- Strict management structure. Whenever your company earns a profit, you must pay corporate taxes on this profit. Any amount of profit distributed to shareholders will also be taxed on the individual level, resulting in double taxation.
How is an Alaska corporation taxed?
The way your corporation is taxed in Alaska varies based on your corporation type. There are three main types of corporations: C corporations, S corporations, and nonprofit corporations. By default, you’ll be registered as a C corporation and can switch to an S corporation.
A C corporation is taxed as a separate entity, meaning the company is required to fill out a corporate tax return. Typically, this would mean all incorporators and shareholders are also required to file individual tax returns for their corporate profits, essentially being taxed twice. However, there is no personal income tax in Alaska, so business owners would only pay corporate taxes.
An S corporation is also called a “pass-through entity,” which means no corporate taxes are due — profits pass through to incorporators and shareholders, who claim them on their individual tax returns. Since there is no personal income tax in Alaska, S corporation owners would not pay taxes on their profits.
Lastly, if your corporation is a nonprofit, and you adhere to nonprofit regulations, you will be exempt from paying corporate taxes. Any individuals who earn a salary from the corporation will report their earnings on their individual taxes. In Alaska, this means nonprofit corporation owners would be exempt from corporate and personal taxes.
Although Alaska has no statewide sales tax, some municipal governments do. You’ll need to check with your local government to see what, if any sales tax exists in your area.
Alaska Corporation FAQs
- What are the Alaska Native Corporations?
The Alaska Native Claims Settlement Act of 1971 created Alaska Native Corporations. These corporations are intended to allow Alaska Natives to economically benefit from Alaska’s natural resources and have become a very large and important part of the Alaskan economy.
- Does running a corporation in Alaska involve more paperwork than running other types of businesses?
Corporations require filing more paperwork than other company types, such as LLCs. There are more reporting requirements (an Initial Report and Biennial Reports) and bookkeeping requirements, as well as more upfront paperwork (shareholder agreement, incorporators’ agreement, etc.).
- What is the difference between an LLC and a corporation in Alaska?
An LLC is a limited liability company, which is viewed as a pass-through entity with one or more partners. LLCs have a more flexible operational structure and do not issue shares, unlike corporations.
- How do I get an Alaska entity number?
When you file your Articles of Incorporation with the state of Alaska, you’ll be assigned an entity number.
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