Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of Alaska. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Alaska yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:
If you are caught operating without foreign qualification in Alaska, the good news is that it won’t invalidate your current LLC contracts or prevent your LLC from defending a lawsuit in the state. But the potential price tag of $10,000 per year should be enough to dissuade any business owner from trying to fly under the radar. That’s a huge hit to your budget.
You can read more about possible penalties on the Alaska Corporations Statutes section 10.50.700 and 10.50.710.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Alaska? The state’s Corporations Statutes do not specify what exactly constitutes transacting business. However, the Department of Commerce, Community, and Economic Development website states that doing business generally includes:
Take note of the warning in the second paragraph: it’s your responsibility to determine if your LLC needs to foreign qualify, not the state’s. If you’re unsure whether or not you need to file for a foreign qualification in Alaska, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Alaska. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some common examples are:
Take a look at the full list of exemptions in section 10.50.720 of the Alaska Corporations Statutes. If you find that your LLC’s only business activities are on the list, you’re likely off the hook. But once again, if you’re unsure, it’s better to seek legal counsel than to risk the penalties.
Foreign qualification in Alaska is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Alaska, you’ll need to file a Certificate of Registration with the state. You can find this document on the “Forms & Fees” page by selecting the “Limited Liability Company,” then “Foreign (Non-Alaskan)” dropdown boxes. You’ll also find an option to file online, which is the quickest and easiest way to go about it. Just click the computer icon next to the form and follow the on-screen instructions.
To file by mail, print and complete the form. Then send it, along with your filing fee, to:
State of Alaska Division of Corporations, Business and Professional Licensing
PO Box 110806
Juneau, AK 99811-0806
The Certificate of Registration for foreign entities, found here, includes detailed instructions on how to gather the necessary information for its completion. Standard processing time is 10-15 days after your complete and correct application has been received.
Whether filing online or by mail, foreign qualification requires a $350 application fee. For mailed applications, the state accepts payment by check or any major credit card (you can include your card info on the form). But if you’re filing online, you can only use a Visa or Mastercard.
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is foreign qualified and you’re embarking on another chapter in the life of your business.
With the paperwork, fees, and rules top of mind, it’s easy to forget about Alaska’s business name requirements, but they’re important! Here’s a quick rundown. Your LLC name must:
You can also reserve your Alaska business name if you’re not quite ready to foreign qualify your LLC.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a state where you don’t have permission to do so.
You’ll typically need to wait roughly 10-15 business days from the date of receipt for Alaska to process your application.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Alaska state law. For more information about business licenses and more in this state, check out the state’s highly convenient Business Licensing page.
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file an Alaska LLC Biennial Report.
The overall costs of operating an Alaska LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Alaska registered agent.
The service then registers your Certificate of Registration with the state to qualify your LLC to do business in Alaska.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Alaska Business Resources
Foreign Qualification by State
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