Think about your LLC a year from now: raking in profits and taking Alaska by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Alaska.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Alaska startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Alaska
- Optional: LLC Name Reservation Fee
- $25 for online or paper forms
- Required: Articles of Organization Fee
- $250 for online and paper forms
- Required: Business Licence Fee
- $50 ($25 for senior citizens and veterans)
Overall Alaska LLC Formation Costs
LLC Name Reservation Fee
If you’ve found a great name for your LLC, but you’re worried that someone else might take it, your first move could be to reserve it with the Alaska Department of Commerce, Community, and Economic Development. This is an optional step, but a useful one. You can reserve a business name online or by mail for $25, which will prevent any other Alaska business from using it for 120 days. Before your reservation ends, you can renew it for 120 more days by paying another $25 fee.
Articles of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Alaska LLC. Filing the Articles of Organization officially registers your business with the state and locks in your LLC name (whether you’ve reserved it or not). The Department of Commerce, Community, and Economic Development offers online and paper forms, which both cost $250 to file. The good news is that as long as your Articles of Organization is accepted, this is a one-time fee.
Business License Fee
You’ve filed your Articles of Organization, but you can’t begin doing business just yet. First, Alaska mandates that you acquire a Business License. Apply for your Business License online or by submitting a paper application for a $50 fee. A $25 discounted rate is available for senior citizens and veterans.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Alaska business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. Sites like Avvo compile lists of Alaska business attorneys so you can find the right fit for you and reach out to schedule an appointment.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Alaska. If you register a foreign LLC with the state of Alaska, you don’t need to file the Articles of Organization – it’s one or the other.
All foreign business entities are required to foreign qualify in Alaska, or they could incur some pretty severe penalties. On the Division of Corporations Forms & Fees page, you can find the “Registration of Foreign LLC” form (formally called the “Certificate of Registration”) available for online or paper filing. Either option costs $350. Like the Articles of Organization, this is a one-time fee as long as your filing is accepted.
LLC Biennial Fees
While some states use Annual Reports to maintain up-to-date business information, Alaska uses Biennial Reports instead, required once every two years. If you start your LLC during an odd-numbered year, your Biennial Report will be due by January 2nd of every subsequent odd-numbered year. The same goes for even-numbered years.
You must also file an “Initial Report” within six months of starting your LLC, although this filing is free. Like some other Alaska forms, you can file the Biennial Report online or download a hard copy. Either filing method will cost $100 for domestic LLCs and $200 for foreign ones.
You’ll also need to renew your Alaska Business License in order to continue conducting business in the state. You can choose to renew your license annually for $50 or biennially for $100.
By default, Alaska LLCs are pass-through tax entities, meaning the business itself doesn’t need to file a separate tax return, only its individual members do. Some states impose a “franchise tax” or “privilege tax” on its LLCs, but Alaska does not. So, unless you deliberately change the tax structure of your LLC, you likely won’t owe specific business taxes.
If you establish your LLC to be taxed like an S-Corp or C-Corp, you will need to pay as much as 9.4% tax on your income, depending on how much your business makes. See the Alaska Department of Revenue website for more details.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Miss a Biennial Report, Business License renewal, registered agent update, or other important filing and the state of Alaska will deem your LLC “non-compliant.” This makes you unable to obtain a “Certificate of Compliance,” which is necessary for expanding your business to most other states. The Biennial Report also has a $37.50 penalty for late filings.
If you don’t keep up with your filings and fees, the state may also revoke your authority to transact business, or, in the worst case scenario, dissolve your LLC completely. Read over this document on your compliance responsibilities for more information. But generally, staying ahead of your required forms and fees will save you a bunch of trouble in the future.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Alaska.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Biennial Reports and Business Licensing– so your business doesn’t fall out of good standing.