Start An LLC In Alaska
Starting an LLC (Limited Liability Company) in Alaska is a great option to consider, as it’s relatively more affordable than other types of companies, and because it allows you to easily separate your business funds from your personal ones.
However, you’ll be required to do some research regarding the paperwork necessary for forming an LLC in Alaska.
But first, let’s see how Alaska ranks in comparison to its neighboring states as a place to form an LLC.
|LLC Filing Fee||$250||$200||$100||$100||$130.38|
|LLC Annual/Biennial Fee||$100 (every 2 years)||$60 (every year)||$0 (however, an information report must be filed every year)||$100 (every year)||$89.34 (every year)|
|Corporate Tax Rate||0-9.4%*||0%*||6.50%||6.6-7.6%||5.60%|
|Nominal GDP per capita||$75,027||$86,265||$49,616||$62,867||$64, 773.08|
Before You Start An LLC In Alaska
Unlike other states that have more specific rules, starting an LLC in Alaska is a rather straightforward process, based on the standard procedure for filing Articles of Organization with the Alaska Division of Corporations, Business, and Professional Licensing.
How Much To Start An LLC In Alaska?
Creating an LLC in Alaska should only cost you $250. While it is not as cheap as it would be in other states, the fact that it’s the only thing that you will have to pay for makes it quite affordable.
A thing to remember is that reserving your LLC name with the Alaska Division of Corporations, Business, and Professional Licensing might cost you an additional $25.
So, for those wondering how to start an LLC in Alaska for free, there is no such option, hence the mandatory fees have to be covered.
Steps To Start An LLC In Alaska
Pick A Name For Your LLC
The first step that you would need to take is to choose a name for your LLC. Now, there are two basic requirements that it needs to comply with:
- It needs to be a unique and distinguishable name, as per the State of Alaska Division of Corporations Database, on the Alaska Department of Commerce, Community, and Economic Development online website.
- It has to contain the phrase Limited Liability Company (LLC), in any of the following variations: LLC, L.L.C., Limited Liability Company, Ltd. Liability Company, Limited Liability Co., or Ltd. Liability Co.
Additionally, it is required that you don’t use any restricted words, such as names of government agencies, words like “university”, “attorney”, “bank”, “village”, etc. These can be checked online, or with the assistance of a registered agent.
- After you have decided which name you want to use for your LLC, and you’ve checked that it’s approved by the Alaska Corporations Database, you need to reserve the LLC name with the Alaska Division of Corporations, Business, and Professional Licensing Office.
- You can either do this through their website, through the online Business or Corporation Name Reservation Application, which will allow you to reserve the name for up to 120 days or you can mail the application directly to the Alaska Division of Corporations.
Either way, the fee for a name reservation is $25.
You are also allowed to use a trading name, assumed name, or fictitious business name instead of your official LLC name. But, to do so, you would have to undergo the same process of reserving the name with the Alaska Division of Corporations and pay a $25 fee.
One more thing to consider before opting for a name is URL availability. Make sure that the URL that you intend to use is available and unique before purchasing it.
Find A Registered Agent In Alaska
The second compulsory step to starting an LLC in Alaska is appointing a registered agent. Officially speaking, a registered agent could be any entity (business or otherwise) or individual person (even yourself), who will be the recipient of official legal documents, tax forms, lawsuit notices, and similar papers – on behalf of your LLC.
There are several conditions that the registered agent would need to satisfy here:
- They need to be a resident of Alaska with a certified home address. If stationed out of state, they need to be in possession of a business office located in Alaska.
- If the agent is an entity (business, company, or similar), they have to be registered to provide agent services.
- During regular business hours, the registered agent needs to be present on-site, or available to receive all necessary documentation.
If needed, the Alaska Department of Commerce, Community, and Economic Development has a private service companies list, which could serve as a registered agent, and as necessary.
Do you need a registered agent in Alaska?
Yes, any potential business owner hoping to establish an LLC is required to find a designated registered agent in Alaska. An LLC registered agent is mandatory for the entirety of the United States of America.
|ZenBusiness – $49 + state fees to register your LLC (read review)|
|Incfile – $0 + $50 state fees to register your LLC (read review)|
Articles Of Organization
Filing your LLC’s articles of organization is one of the essential first steps to establishing your company. The articles of organization are an online document form, titled “Form 08-484 – Articles of Organization”, that needs to be filled in and submitted to the State of Alaska Division of Corporations under the Alaska Department of Commerce, Community, and Economic Development.
This can be done either online – the preferable method – or by mail. The articles of organization will usually contain the following information:
- The name of your LLC
- The name and physical address of the registered agent you’ve chosen
- An LLC statement of purpose
- The LLC’s management structure: will it be member-managed or manager-managed?
- The duration of the LLC (most LLCs are created with indefinite duration but some are established for only a limited period of time and have a clear purpose).
- Organizer(s) signature(s)
The fee for filing your articles of organization is $250. The only exception to this applies to foreign LLCs established outside Alaska, but planning on doing business in the state. These would have to submit an additional Certification of Registration of Foreign Limited Liability Company (online or by mail). The overall fee for this is $350.
Other Required Documents
Aside from these required documents, the State of Alaska requires the submission of a number of additional documents upon starting your own LLC, which may or may not be compulsory for potential small business owners from other states. The most important additional mandatory documents are listed below.
You need to choose and identify a unique NAICS (North American Industry Classification System) code for statistical purposes regarding the registration of businesses in different industries done by the USA government. The NAICS code is a 6-digit number that helps characterize the type of business activity done by your LLC. This is to be used for tax reports and similar purposes.
State Certificate and Business License
Before you are able to start operating through your LLC, or even proceed to some of the following steps, you would need to wait for your articles of organization to be processed, and for your official Certificate of Organization to be sent to you on behalf of the state of Alaska.
Similarly, you will need to apply for a business license through the Alaska Division of Corporations, Business and Professional Licensing, Occupational Licensing Section.
This expires at the end of each calendar year, and you need to regularly reapply for it.
Initial Report and Biennial Reports
Within 6 months of establishing your LLC, you are required to file your free Initial Report at the State of Alaska Division of Corporations. Once the LLC has been formed and functioning, you will be expected to submit a Biennial Report every two years. This applies to both Alaska and foreign LLCs.
To clarify things before we proceed. Unlike some states, an operating agreement is not mandatory in Alaska. However, considering the importance and usefulness of this document,
it is more than recommended that you create one as soon as possible.
An operating agreement is a document that states the ownership and methods of leading the business in the LLC. Its main purpose is to state the terms of the LLC’s operating procedures, ensuring that no confusions, misunderstandings, misalignments of interest, and future legal issues arise. Some of the essential information contained in an operating agreement includes:
- LLC name and address
- Registered agent name and address
- Articles of organization information
- Members and respective roles
- Division of profits and management of finances
- The processes for accepting new members and releasing old ones from duties
- Identification clauses and liability clauses
Get An EIN
The final step required when forming an LLC in Alaska is to obtain an EIN or Employer Identification Number. An EIN, FEIN, or FTIN, is a nine-digit number assigned to your LLC by the IRS (Internal Revenue Service) for the following purposes:
- Filing and managing federal taxes and state taxes
- Hiring new employees
- Opening bank accounts
It can be filed online, or through the IRS Form SS-4.
The Forms You Need To Register An LLC In Alaska
The single compulsory form needed to register an LLC in Alaska is the Form 08-484 Articles of Organization, with the Alaska Department of Commerce, Community, and Economic Development, which can be filed online, by mail, in person, or by fax.
Did you know?Interestingly enough, Alaska does not allow for entity domestication. In order to expand your business to Alaska, you can opt for establishing it anew as a foreign LLC, or dissolving it in one state, and establishing it from scratch in Alaska.
LLC Taxes In Alaska
How much do LLCs have to pay in taxes in Alaska?
Due to Alaska not having a personal income tax, LLCs themselves are not required to pay taxes, only the constituting members are. However, an LLC owner can decide to treat their business as a corporation for tax purposes, which can be done by filing the IRS Form 2553. The company would then be expected to pay up to 9.4% in taxes to the state’s DOR (Department of Revenue).
Also, if the LLC has employees, the employers will be required to pay employer taxes.
How much state taxes do LLCs in Alaska have to pay?
As per Alaska law, which has absolved personal income tax, LLCs are not expected to pay any state taxes by themselves.
How much federal taxes do LLCs in Alaska have to pay?
Due to there not being a personal income tax in Alaska, LLCs do not pay federal taxes. Still, members of the LLC will be expected to report incomes and losses to the IRS for the personal 1040 tax return.
Is Alaska A Good Place To Start An LLC?
Considering the ease of starting an LLC, the lack of taxes, and the online submissions, Alaska is a great place to start an LLC.
How Long To Form An LLC In Alaska?
Forming an LLC in Alaska can take as little as a few days, or up to several weeks, depending on your method of filing documents.
How Much Does It Cost To Run An LLC In Alaska?
The cost for establishing an LLC in Alaska is $250 – it’s the fee needed to file the Articles of Organization. The yearly cost for running one is $50.
What To Do After Formation?
The main thing to do after forming an LLC in Alaska is to file the Initial Report within the first six months. Both the Initial and the Biennial Reports can be filed online or through the mail.
The Biennial reports come with a fee of $100 for Alaska LLCs, and $200 for foreign LLCs.
Both types of reports include:
- LLC name and state
- Address of LLC and address of the registered agent
- The names and addresses of all LLC managers and all LLC members
- Names and addresses of all people with more than 5% interest in the LLC, along with the exact amount of interest each one has
Resources To Make A Successful LLC In Alaska?
The following links can help you establish a successful Alaska LLC:
Start Marketing Your LLC In Alaska
Various reliable marketing techniques will help you advertise your LLC in Alaska. Consider developing several online marketing strategies, establishing active social media platforms, and relying on SEO, and digital marketing tactics to get more exposure, depending on what your business will do exactly.
How To Dissolve An LLC In Alaska
The only step necessary to dissolve an LLC in Alaska is to file the completed Articles of Dissolution Limited Liability Company, in two copies, and send them to the Division of Corporations, Business, and Professional Licensing by mail, fax, or in person.
How To Start An LLC In Alaska? The Verdict
We have covered all necessary steps required to establish an LLC in Alaska. After you have reviewed the law, all you need to do is choose a name, file the Articles of Organization, settle the other supporting documents, and pay the necessary fees. The LLC won’t be expected to pay taxes, but you’ll maintain your annual fees and biennial reports.