Have you decided to start your new business in Alaska finally? Congratulations! While you’re probably excited to get your company up and running, you might have questions about the legal side of forming a limited liability company (LLC). The process might seem overwhelming at first, but it’s fairly straightforward once you know the right steps.
Every state has different expectations for LLCs, so it’s important to understand Alaska’s rules and regulations for starting a business.
To help, we’ll walk you through each step of the LLC creation process. Not looking forward to all of the legal paperwork you’ll have to file? Don’t worry — we’ll also explain how an LLC partner like ZenBusiness can be a helpful part of this process, so you can focus on your new business without worrying about the administrative stuff.
The 5 steps to form an LLC in Alaska:
When forming an LLC in Alaska, you’ll first want to register your company with the Secretary of State. When you do this, you’ll be creating a public record of your company with the state government, making it easier for them to contact you and keep you updated on any legal changes.
But first, you’ll need to make a few important decisions about your LLC, such as coming up with a name and deciding on a registered agent. Then, you’ll file paperwork to establish your LLC, create an Operating Agreement, and get your business taxes up to date.
After you file the required paperwork, you’ll still have some other boxes to check. For example, you’ll likely want to draft an Operating Agreement and register your company with the IRS.
There’s no need to feel overwhelmed by these requirements. Below, we’ll break everything down into six simple steps. By taking care of each component, you’ll have your new LLC in no time.
Step 1: Name Your Alaska LLC
Deciding on a name for your LLC in Alaska is very important. This name will help you attract new customers and also serve to legitimize your business in the eyes of the state government. Before you can register your LLC officially, you’ll need a business name.
When choosing a name, you might want to go with something that’s catchy or easily explains what your business does or sells. It’s best to come up with a list of a few names, and if you have partners, ask them to provide a few, as well.
Once you have your list, it’s time to lock down your final name, and you’ll want to start by looking at existing company names in Alaska. One of the primary reasons you want to have a few names handy is that, in Alaska, your LLC’s name must be unique and cannot already belong to another business. You can use the Alaska Department of Commerce, Community, and Economic Development Corporations Database to determine if your name is available.
You’ll then want to decide on an LLC designator. All LLCs need a designator at the end of the business name. If you decide to name your business “Sue’s Salads,” your official business name would need a designator added, such as “Sue’s Salads, LLC.” There are several designators you can choose from. Here’s a full list of approved options:
- Limited Liability Company
- Limited Company
- Ltd. Liability Company
- Limited Liability Co.
- Ltd. Liability Co.
Note that you’ll also want to check the state statute on what words can’t be used in your LLC name.
Once you’ve decided on a name, you’re ready to reserve your business name. You can get answers to questions regarding your business name on the Alaska Division of Corporations, Business, and Professional Licensing website. All name reservations can be made online through the Business or Corporation Name Reservation page. For a $25 fee, this reservation will hold your business name for up to 120 days. You may renew your name reservation twice for a fee of $25 per renewal.
Your business name is automatically registered when you file your Articles of Organization, so there’s no additional fee for registration. You also don’t need a business license to register your business name.
A few other things you’ll want to think about when it comes to your Alaska LLC name:
- Apply for a DBA: A DBA (“Doing Business As”) or “trade name” is another name you can register to use for your business. Use the Division of Corporations, Business, and Professional Licensing website to learn more about registering your trade name.
- Register your trademark: While looking into your DBA, you’ll want to visit the United States Patent and Trademark Office website to see whether your business name or logo is federally trademarked. Trademarks also happen at the state level. You can find out more about trademarks within Alaska here.
- Reserve a domain name: You’ll need a website for your business, so be sure to do a quick domain name search, and use someone like ZenBusiness to reserve your website domain name.
Step 2: Appoint a Registered Agent in Alaska
Now that your name is reserved, it’s time to decide who should be your LLC’s Alaska registered agent. Like most states, Alaska requires LLCs to assign a registered agent to their company. This position can be filled by a person or corporation. If it’s a person, that person must be a resident of Alaska only, defined under AS 01.10.055(a) as “being physically present in the state with the intent to remain in the state indefinitely and to make a home in the state.”
Your registered agent will work on your behalf to receive all legal paperwork. They’ll then pass these documents along to your LLC.
Since a registered agent can receive sensitive documents at any time during the business day, they’re required to have a physical office address within the state of Alaska. They’re also expected to keep regular business hours at this location. A P.O. box address is not allowed.
If you’re wondering if you can act as your company’s registered agent, the answer is yes (provided you’re a resident of Alaska, as we outlined above). However, many companies often decide to work with an outside registered agent service that can pass along legal paperwork to their LLC.
Some additional benefits of a registered agent service include:
- Partnering with a registered agent service means that their name and address and not yours will be the business’s registered office. This often has the added benefit of shielding your name and address from appearing in public records.
- You’ll have more flexibility when you hold business hours, as someone will be available during the week from 9 a.m. to 5 p.m.
Step 3: File Alaska Articles of Organization
Once your name is selected, and your registered agent has been appointed, you’re ready to go ahead and submit the paperwork to register your LLC with the state of Alaska. Luckily, this paperwork is pretty minimal and shouldn’t take long to fill out or submit.
The form you’ll need to submit is called the Articles of Organization, and it can be filled out online or via mail. You’ll need to pay a $250 fee when filing online or through the mail.
For those who choose to mail in the Articles of Organization, send it to:
State of Alaska
Department of Commerce, Community, and Economic Development
Division of Corporations, Business and Professional Licensing
PO Box 110806
Juneau, AK 99811-0806
When filling out your form, you’ll need the below information ready:
- Name of the limited liability company. This is your LLC’s official name (with the designator).
- The primary purpose of this company and the NAICS code. This refers to your line of business. You can find your six-digit NAICS code here.
- Name and address of your registered agent. This is your registered agent’s legal name and office or operating address.
- Business address. You’ll need to list where your principal place of business is if filing online. If filing by paper, you’ll need to include it when you file your Initial Report (more on that below).
- Management structure. You’ll indicate if you and the other owners manage the company or if a manager is in charge.
- Name and address of all organizers. You’ll list the name and address of all the organizers of your LLC, if applicable.
- Organizer signature. This is where you’ll sign. At least one organizer must sign this form.
Within six months of your LLC being approved, you’ll also need to file an Initial Report with the state. See “Additional Business Requirements” below for instructions.
Step 4: Create an Operating Agreement
In Alaska, you’re not required to create an Operating Agreement to register your LLC. However, having an LLC Operating Agreement is a smart move that can protect your business and avoid any potential conflicts from management, other owners, or employees.
An Operating Agreement covers the terms of your LLC’s ownership and management hierarchy to better protect all parties involved in the LLC. For multi-member LLCs, this is particularly important, as it can detail voting structures and help determine different rules for members. Even if you’re the sole member of your LLC, an Operating Agreement is important to have in case you’re incapacitated or otherwise unable to run your company.
In addition, Operating Agreements make a stronger separation between your business and personal assets, which can protect your personal savings accounts from any legal liability if your company is ever sued.
If you have a multi-member LLC, all members in your LLC should review, agree to, and sign your Operating Agreement. You might also want to review some terms with your company’s managers or employees.
Step 5: Apply for an EIN
Now that the initial paperwork for your LLC is out of the way, it’s time for you to get your business set up with the Internal Revenue Service (IRS). The first step you’ll want to take is registering for an Employer Identification Number (EIN).
Your company’s EIN works like your personal Social Security number. It identifies your company to the federal and state government and allows you to file taxes and hire new employees.
If you’re the only member of an LLC and have no employees, you might not have to apply for an EIN, even though it can be helpful. Your EIN can help you separate business and personal accounts and may make it easier to handle your taxes. To apply for an EIN online, visit the IRS website. Your number should be available immediately after applying, and there’s no charge for this process. Once you have it, it will help you get your business up and running by allowing you to obtain a business bank account, for instance.
How much does it cost to start an LLC in Alaska?
When planning for your LLC, you’ll want to make sure you factor in the initial costs of filing the important paperwork needed to establish your business. We’ll walk you through the top costs you can expect, so you’ll have an accurate estimate when you’re ready to get moving. Summary of costs:
- Reserving your business name — $25
- Filing your Articles of Organization — $250
Therefore, the total cost of state fees for forming your LLC in Alaska will be roughly $275. This price can increase if you have to pay for special permits or request rushed processing on any filings. 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 LLC Articles of Organization! However, you’ll still need to pay the fee associated with reserving your business name.
What are the benefits of an LLC in Alaska?
Many new and small businesses decide to form LLCs because of the flexible and simple structure this business type allows. LLCs let you separate personal assets and liabilities from the company’s and offer many other protections. Setting up an LLC is also fairly simple and easy for first-time business owners to tackle.
Here are a few of the main benefits you’ll receive by setting up an LLC in Alaska:
- Separation of personal finances and liabilities from your LLC’s legal liability and/or business debts
- An easily adaptable business and management structure that lets you set up your business for success
- Only pay personal taxes rather than paying taxes on both your company profits and individual earnings
- Pay only personal taxes, rather than paying taxes on corporate profits and individual earnings.
- Fewer reporting requirements and regulations than most corporations
Want more information on the LLC business structure? Check out our comprehensive guide on LLCs.
How is an LLC taxed in Alaska?
Thankfully, by starting an LLC, you’re exempt from double taxation, but there are a few more things you should know about LLC tax rules. Managing the taxes for your LLC might seem complicated if you’ve never handled them before. While the rules are fairly straightforward, you can’t go wrong by partnering with an experienced accountant or tax specialist who’s fully versed in Alaska’s small business laws and requirements.
Here are some of the main federal and state tax requirements for LLCs in Alaska:
- If you’re the only member of your LLC, you’ll by default be taxed as a sole proprietorship, meaning you’ll include all of your business income and expenditures on your individual tax return.
- If your LLC has more than one member, your LLC will be treated as a partnership by default. As mentioned above, an EIN will be mandatory, as will a yearly filing of an information return that will specify the exact amounts that every member of your LLC invested in or received from the business.
- Some LLCs might choose to be taxed as a C corporation. If that’s the case, you’ll want to fill out an 8832 tax form with the IRS. Every year, you’ll file your state and federal business tax returns, listing all of your business investments, profits, losses, expenses, and employee salaries. Profits from the business will be taxed on the business tax returns, and your share of the business profits will be taxed again on your individual tax return. To be taxed as an S corporation, you’ll need Form 2553.
- As an LLC, you’ll be responsible for paying quarterly taxes. You can avoid tax penalties when paying at the end of the year by making estimated quarterly tax payments for your state and federal taxes. If your company has employees, you’ll also be responsible for withholding federal, Social Security, and Medicare taxes from their paychecks. These withholdings will then need to be submitted to the IRS. This will not need to be done on the state level since Alaska does not have personal income tax requirements.
Additional Business Requirements for LLCs in Alaska
There are also a few other business filing requirements you should be aware of for your Alaska LLC.
- Initial Report. After your LLC is established and running, you’ll need to file an Initial Report with the state of Alaska. This report is due six months after your LLC is registered to keep your information up to date with the local government. You can fill out the form online or access a PDF to print and mail on the state website. There’s no filing fee for your Initial Report.
- Biennial reports. Every two years, Alaska requires LLCs to file a biennial report. This report is submitted to keep your company’s information up to date with the state government. Your biennial report is due by July 2 every other year and can be mailed in or filed online. If filing via mail, you’ll need to search for your business on the Alaska Department of Commerce, Community, and Economic Development website to access the form. The cost to submit is $100.
If you’re worried about remembering to file and manage any of these business requirements, you don’t have to do them alone. ZenBusiness has a host of services intended to help keep you in compliance and give you the support you need to run and grow your business.
Alaska LLC FAQs
- What is the processing time to form my Alaska LLC?
It can take between 10 to 15 business days to process your Articles of Organization when filing a hard copy. Online filing is usually processed immediately. You can also pay for expedited processing if you have a rush request.
- Do I need to file my Operating Agreement with the state of Alaska?
No, an Operating Agreement is not required in Alaska to register an LLC. Although this isn’t mandatory, an Operating Agreement can serve an important function in detailing how your company management and voting structure works, which can resolve conflict in the future.
- What tax structure should I choose for my Alaska LLC?
Most LLC owners decide to have their business taxed the default way, which is as a sole proprietorship or “disregarded entity” (for single-member LLCs) or a partnership (for multi-member LLCs). This method only requires members to pay taxes on their percentage of the profits on their personal tax returns. The LLC itself is not taxed. This avoids the “double taxation” that corporate shareholders pay, in which profits are taxed both at the business level and the personal level. In Alaska, you’ll only pay taxes on your income at the federal level, as Alaska doesn’t have a personal income tax requirement.rnrnLarge LLCs or high-earning companies might choose to be taxed as a corporation. If you’re not sure which method is best for your LLC, you can learn more about the differences in filing as a corporation in this guide.rnrnLastly, be sure to reach out to an experienced tax preparer or accountant if you have any additional questions about the best way for your business to pay taxes.
- Does Alaska allow a Series LLC?
A Series LLC, which refers to one or more LLCs under the umbrella of a parent LLC, is a concept that appeals to many business entrepreneurs. However, Series LLCs are not legal in all states. Currently, Alaska does not allow you to form a Series LLC.
- Which licenses and insurance are required for an LLC in Alaska?
You are required to have an Alaska business license before conducting business in the state. You can do this online or by mail. In either case, the fee is $50. The business license must be renewed either once a year for $50 or twice a year for $100, depending on your initial application. Regardless of the date you purchased the license, it expires on December 31. Alaska has a FAQ on business licensing here.rnrnAs we mentioned above, as of June 2020, Alaska has waived “almost all business licensing fees” due to COVID-19 through Nov. 15, 2020, or “at the expiration of the disaster declaration, whichever is sooner.” Check the state website for updates before applying for your license.rnrnYou can find more information on what types of industries require special licensing on the state website. If you are required to obtain a business license, you can file your request online by selecting your specific licensing form. Permit and licensing fees will vary depending on your line of business.rnrnIt’s important to note that the federal government as well as your city and county could require special permits or licenses based on your industry. You’ll want to reach out to your local government office to find out your LLC’s requirements and research what federal or industry-specific licensing you may need.rnrnIn any case, we recommend hiring a professional service like ZenBusiness, which will provide you with a comprehensive package of all the licenses and insurance required for your Alaska LLC to ensure your business remains in good standing.
- How do I dissolve my LLC in Alaska?
If you find you need to dissolve your LLC at any time, you can do this easily online in Alaska. Before dissolving your LLC, you’ll want to close any business accounts or tax accounts in your LLC’s name since this can be hard to do after the LLC is dissolved.rnrnOnce your accounts have been canceled, you’re ready to file your Articles of Dissolution. This form will ask for the name of your LLC, the date or organization (and dates of any amendments made), the reason for the dissolution, the date of dissolution, and your signature.rnrnThere is a $25 filing fee for this form. You can mail your Articles of Dissolution or submit a signed copy online.rnrnOnce accepted, your LLC will be dissolved.