How to Start an LLC In Alaska
By Bazal Razzaq
Updated: July 26, 2023, 12:30pm
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- Pick A Name For Your Alaska LLC
- Draft A Business Plan
- Obtain Your NAICS Code
- Appoint A Registered Agent For Your LLC
- File your Articles of Organization Document with The Secretary of State
- Prepare an LLC Operating Agreement
- Get the necessary Business Licenses and Permits
- Apply for Your Federal EIN (Employer Identification Number) with the IRS
- Submit Your Initial and Biennial Report
- Final Word
- How To Form An LLC In 50 States
- Frequently Asked Questions (FAQs)
Thinking of forming an LLC in Alaska? Well, you’re at the right place! The state is not just famous for being the largest state in the US, offering diverse and vast wildlife, raw wilderness beauty, and multiple outdoor adventures, but also for being the top #5th state for forming a Limited Liability Company.
Just like any other state, starting an LLC in Alaska is extremely easy and easier if you follow our step-by-step guide listed below.
Pick A Name For Your Alaska LLC
When starting an Alaska LLC, your top priority should be choosing a perfect name for your company. As a business owner, this is probably the most necessary decision you’ll make in your entrepreneurial journey.
Later on, you’ll also have to include this name in your Articles of Organization form. So, it’s best to come up with a name that’s both legally compliant and reflects your brand image.
A great LLC name that’s unique and memorable enough creates a solid business identity for your company.
Some Alaskan LLC naming rules and guidelines you should take note of before making decisions are:
- Name Availability: Your chosen name should be distinct, unique, and, most importantly, different from any other business entity registered in Alaska. We understand how it may sound confusing since there are many businesses enlisted with the state. To counter that, you can head over to the Alaska Division of Corporations, Business, and Professional Licensing website to check if your desired name is available or check the existing businesses on the Alaska Department of Commerce, Community, and Economic Development.
- LLC Designation: Your LLC’s name should reflect it’s a limited liability company. It’s a good idea to end the name with abbreviations like “LLC,” “LLC,” or “Ltd.” Most people just use “LLC.”
- Restricted Words: When naming your LLC, please keep in mind that some words/terms may require additional approval or documentation. For example, terms like “bank,” “university,” “insurance,” etc, might need to get consent from the Alaskan state government. You may also need to provide any additional documentation to prove your eligibility to use such words.
- Obscene/Prohibited Words: You also need to make sure that your chosen LLC name doesn’t include any prohibited terms. They may be misleading or violate existing trademarks or copyrights. Although it goes without saying, but you should also avoid using any rude or abusive language in your business name.
- Professional LLCs: If your LLC provides professional services (e.g., legal, medical, accounting), remember that there might be additional needs or restrictions on using certain words. You may need to comply with licensing or regulatory agencies that are specific to your profession. Some words like “lawyer,” “credit union,” and “attorney” have special restrictions given their professional nature. You’d need to provide additional documents and licensing to the state government.
Once you’re completely sure about your chosen name, you can consider reserving it. Why? Because you wouldn’t want another business entity claiming it. In Alaska, you can reserve a new business name for up to 120 days for a fee of $25.
Draft A Business Plan
A well-drafted business plan acts like a roadmap to your company’s success and helps you sort out priorities and trace back your professional goals as an entrepreneur. Using it, you can also calculate the estimated business startup costs and if your LLC can cover its ongoing expenses.
A well-mapped business plan also helps you catch the investors’ attention. How? Well, investors like to see a strategic plan as it helps them decide if your business can make any profits. This brings us to our next question,
What Should A Business Plan Include?
- LLC name and business address
- A brief summary of your company
- Business Description
- An overview of your products and services
- Market Analysis and Sales and Marketing Plans
- Financial goals and how you intend to achieve them
- Monetary Needs
- Management Structure
- Competitor Research
Obtain Your NAICS Code
The NAICS(North American Industry Classification System) Code is a six-digit number that sorts and groups the type of business activities done by your Alaska LLC. It helps classify and categorize US businesses for statistical purposes. This classification is usually done on the type of economic activities the company is engaged in. You may need this code when filing your annual tax returns.
Appoint A Registered Agent For Your LLC
In Alaska, in fact, in most states of America, every business, including LLCs, is required to assign a registered agent. A registered agent(statutory agent/ resident agent/ agent for service of process) is an individual or a professional service authorized to handle important legal and financial documentation and official mail for your LLC.
Generally, you have three options for appointing a registered agent:
- Be your own registered agent
- Choose an employee, manager, or partner of your LLC
- Hire a third-party person or service that’s authorized to operate in the state.
The registered agent should have a physical address in Alaska, not just a PO box. Also, they must be available at their location during regular business hours to receive and sign important documents.
Some requirements to serve as a registered agent in an Alaska LLC are:
- If it’s an individual, they should be at least 18.
- The agent/service should have a physical street address in Alaska and a registered office(PO boxes are unacceptable).
- They also need to have official authority to work in Alaska, which may involve being a state resident or having a permit to conduct business there.
- They need to be available during normal business hours to receive legal documents and official mail on behalf of their LLC.
- They should provide written consent to serve as the registered agent.
File your Articles of Organization Document with The Secretary of State
Next, you need to file your Articles of Organization form with Alaska’s Division of Corporations. But before we begin, we’ve heard enough complaints from friends and family about how they always get confused when it comes to the document. Apparently, the Articles of Organization form has multiple names, like,
- Certificate of Organization
- Certificate of Formation
- Certificate of Registration
- Certificate of Incorporation (used in some states for LLCs)
- Certificate of Authorization
- Articles of Formation
- Articles of Registration
- Articles of Incorporation (used in some states for LLCs)
- Articles of Association
- Articles of Establishment
So you needn’t be confused the next time you find one of the above synonyms.
Coming back to the topic, you need to file your Articles of Organization document with the Alaska Division of Corporations to officially register your LLC with the state. The document can be sent either by mail or through online applications.
You’ll need the following details to prepare your document:
- The name and address of your LLC.
- The name and address of your registered agent.
- A brief summary of LLC’s main objective.
- Reason for initiation. It can be a simple statement explaining why you started your LLC.
- How long your LLC will exist. Most LLCs last forever, but if yours has a specific end date, you can mention it.
- Who will run the LLC: members or managers?
- Signature of the person starting the LLC.
You need to pay a fee of $250 to obtain your Alaska Articles of Organization.
Once you submit your paperwork, the secretary of state will review the filing. If everything is okay, your LLC officially becomes a legal entity.
Prepare an LLC Operating Agreement
As an entrepreneur, it’s important to understand that you should have an operating agreement for your LLC, as state or federal law requires. An Operating Agreement is a document that outlines how your LLC will make decisions, how it’ll run, and how you’ll handle accountability and goal-setting within your organization. It’s like a rulebook that keeps things organized and running smoothly.
An agreement includes the ownership percentages, rights, roles, and responsibilities of each member/owner of the LLC. It can also include profit-sharing rules, decision-making, and dispute resolution.
An operating agreement can include(but isn’t limited to) the following details,
- LLC Information
- Members’ Contributions
- Ownership Percentage
- Management and Voting
- Duties and Responsibilities of Members/Owners and Managers
- Profit and Loss Allocation
- Transfer of Membership Interest
- Admission of New Members
- Taxation and Financial Matters
- Dispute Resolution
- Buyout and Dissolution
Get the necessary Business Licenses and Permits
You need to obtain a general state business license issued by the Alaska Department of Commerce, Community, and Economic Development to carry out your LLC operations and activities legally and without any kind of intrusion or disturbance. You can apply for it online or by mail by filing a New Alaska Business License Application. The filing fee is $50, and you must submit one every two years for renewal.
Depending on the location and the kind of business your LLC runs, you might also need other licenses or permits. You can visit the Division of Corporation’s Professional Licensing webpage to learn more.
Apply for Your Federal EIN (Employer Identification Number) with the IRS
A Federal Employer Identification Number, more popularly known as EIN, is a unique nine-digit number(formatted as XX-XXXXXXX) issued by the IRS (Internal Revenue Service) in America. It provides official identification for taxation and is quite similar to the SSN. This identification number recognizes the business for legal and financial purposes and tracks your LLC’s tax obligations.
You need an EIN if,
- Your business has employees,
- Functions as a corporation or partnership,
- Or withholds taxes on income paid to a nonresident alien.
It also comes in handy,
- when filing tax returns,
- opening business bank accounts,
- applying for business licenses and permits,
- and conducting other business operations.
Not just this, but it also helps you separate personal and professional finances.
The easiest way is to apply online through the IRS website. You also have the option to apply through mail or fax.
Submit Your Initial and Biennial Report
Once your LLC is set up, file an Initial Report within six months of organizing it. You generally have two options, either submit it by mail or through online applications. Either way, there’s no filing fee involved.
Additionally, all LLCs must also file a report form every two years in Alaska. The deadline is before January 2 of the filing year, and you can choose to file it online or send it by mail. The fee is $100 for local LLCs, while for foreign LLCs, the fee is $200.
Here’s what you need to include in your Biennial Report,
- Your LLC’s legal name and business address
- The name your company actually uses, in case it uses a fictitious name file for a DBA.
- The name, address, and contact details of your LLC’s registered agent
- The names, addresses, and contact information of managers and shareholders/members
- EIN and Identifications like your state entity number
- The main objective of your LLC
- A list of authorized signatories
- Details about any changes to the business’s details during the year.
By now, you may have the idea that creating an LLC in Alaska is a relatively straightforward process that offers many perks and protections for entrepreneurs. Using our step-by-step guide, you can walk through the complexities and formalities of starting an LLC and set your business up for success.
But don’t bid goodbye just yet! Running an LLC is a full-time job. So once your LLC is officially a registered entity, you can complete the formalities included below:
- Register with the state’s tax agency.
- Open a professional business bank account.
- Apply for a business credit card.
- Purchase business insurance.
- Protect your name and logo with a trademark.
Also, when hiring employees for your Alaska LLC, you need to follow these steps:
- Confirm their eligibility to work in the US.
- Report them as “new hires” to the state.
- Provide workers’ compensation insurance for your employees.
- Withhold employee taxes.
- Display workplace compliance posters visibly in your workspace.
Lastly, we suggest conducting deep research, seeking professional advice when needed, and staying compliant with state regulations to ensure a smooth and prosperous journey as an LLC owner in Alaska, The Last Frontier.
Frequently Asked Questions
Non-U.S. citizens and non-residents can own and operate an LLC in Alaska. There are no citizenship or residency requirements for LLC ownership.
After forming your LLC, you’ll have to:
- File an Annual Report and pay the required fee.
- Renew any business licenses or permits as and when required.
- Comply with Alaska’s tax regulations and file necessary tax returns.
- Keep accurate records and maintain your LLC’s good standing.
While you can form an LLC by following the state’s guidelines, consulting with an attorney can be beneficial. An attorney can cover all legal aspects, help you draft an Operating Agreement tailored to your needs, and provide professional advice.
To start an LLC in Alaska, follow these steps:
- Choose a unique business name
- Obtain Your NAICS Code
- File Articles of Organization
- Designate a registered agent with a physical address in Alaska.
- Create an Operating Agreement outlining the company’s internal rules and ownership structure.
- Obtain any necessary permits or licenses required for your specific business activities.