Start an LLC in Alaska (and Best LLC Services in AK)

Step 1: Name Your LLC

What’s in a name? Quite a bit, actually. Your business name is your Alaska LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.

Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.

While you can (and should) be creative with your business name, there are certain state requirements that it must follow.

Take a look at this page, which outlines Alaska’s LLC name rules and requirements. First and foremost, your name must include an “entity indicator” like “Limited Liability Company,” “L.L.C.,” or “LLC.” Beyond that, your name shouldn’t imply that the LLC is a governmental unit, mislead as to its business purpose, or contain vulgar language.

Most importantly, your name must be distinguishable from every other name reserved or registered with the Department of Commerce, Community, and Economic Development.

But “distinguishable” can have different meanings in different states. So, what about Alaska? According to Alaska law, making the following changes will distinguish your name:

• Adding, removing, or rearranging one or more letters or numerals
• Changing one or more of the keywords
• Changing the order of the keywords
• One or more keywords use a “creative, unusual, or artistic” spelling
• Using a keyword with a difference in its meaning or context
• Expressing a number differently (as Arabic numerals, Roman numerals, or words)
• Making a keyword singular, plural, or possessive

See this page for additional details on distinguishable names.

For Example

Consider this: your friend Fanny wants to open a flower shop in Fairbanks, Alaska. The name she wants, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Department of Commerce, Community, and Economic Development’s records.

Determine the Name Is Available

Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Articles of Organization without first confirming it’s available. Use the Department of Commerce, Community, and Economic Development’s Corporations Database Search to see if there’s an existing business using your desired name.

Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.

Optional: Name Reservation

You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can lock down that name by filing a renewable, 120-day name reservation.

Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold either online or by mailing a Business Name Reservation to:

Department of Commerce, Community, and Economic Development

Division of Corporations, Business, and Professional Licensing

P.O. Box 110806

Juneau, AK 99811

The filing fee is $25 for both online and hard copy filings. Placing a name reservation is a great option if you’re not quite ready to start your business. But if your LLC is ready to go, you’ll save time and money by simply using the name on your Articles of Organization instead, as this will automatically register your name.

Step 2: Choose a Registered Agent

Fanny’s LLC is quickly taking shape, and if it’s going to operate in Alaska, she’ll need a go-between for state and legal communications. This is called the registered agent.

A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. Alaska’s Statutes state that “the registered agent of a corporation is an agent upon who may be served processes, notices, or demands required or permitted by law to be served upon the corporation.”

LLC taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside Alaska and you foreign qualified your LLC here.

But maintaining an agent isn’t just a convenience, it’s required. Let’s check back with the Alaska Statutes, which say that you must “continuously maintain in this state a registered agent (an individual resident of Alaska or a corporation authorized to transact business in Alaska) and a registered office.”

Now for the practical application, the “how-to.” Make your registered agent appointment official by including the agent’s name and address on your Articles of Organization. Once the document is filed, that information will become part of your LLC’s public record.

You have two options for who can serve as a registered agent: an individual or a company.

Individual as Registered Agent

You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. But as long as a person has a physical Alaska address, they are a viable option.

Attorneys, consultants, and other third parties can be great choices because they know the ins and outs of maintaining an LLC. But friends, family members, and acquaintances are also valid agents. You can even appoint yourself if you meet these requirements and don’t mind the added responsibilities.

Registered Agent Service

It can be a lot easier, though, to use an LLC formation service as your registered agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your LLC on your own, you can use a national registered agent service to cover your agent duties.

During the life of your LLC, you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.

Step 3: File the Formation Documents with the State

This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.

She’s reserved her unique business name and designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Articles of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the Alaska Department of Commerce, Community, and Economic Development, giving it the authorization to commence business in the state.

There are two ways to file your Articles of Organization: online or by mail. Both are equally effective, but online filing is the fastest, providing immediate processing.

Online

Once again, this is the quickest option, so if you’re in a hurry, file online. Get started on the Department of Commerce, Community, and Economic Development’s forms page. Click “Articles of Organization” in the Limited Liability Company section, which will take you to the online filing page.

By Mail

On the business forms page, you can find a PDF of the Articles of Organization in the Limited Liability Company section. Download and complete it, then include a $250 check or a Credit Card Payment Form and mail the materials to:

State of Alaska

Division of Corporations, Business and Professional Licensing

Corporation Section

P.O. Box 110806 

Mailed documents are filed in 10-15 business days, and after your document has been filed, you’re free to begin doing business in Alaska.

Step 4: Create an Operating Agreement

The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.

Alaska law doesn’t require your LLC to adopt an operating agreement, but this doesn’t mean it’s in your best interest to go without one. The agreement isn’t just a list of procedures, but a comprehensive document that offers legal asset protection and legitimacy in the eyes of courts, banks, government agencies, and more. So, you should think twice before proceeding without one.

Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decides to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to the tax structure.

If you’ve decided to draft an agreement, there are two ways to go about it:

• Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but our favorite free template is from TRUiC.
• Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it includes all necessary information.

What are default laws?

Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.

Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.

Step 5: Get an EIN

There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.

Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.

The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:

Online

Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.

Fax

You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.

Mail

Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

Okay, so you’ve filed the Articles of Organization, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!

Step 6: Taxes, Licensing, & Income Reporting

For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep an Alaska LLC running smoothly and in good standing with the state.

Before you start doing business, create a plan for the following potential LLC requirements:

Federal Taxes

As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.

State Taxes

Similarly, your LLC’s state income isn’t reported on a separate corporate tax return, and since Alaska doesn’t have an income tax, the LLC owners won’t need to pay taxes on it either. Plus, Alaska doesn’t impose any kind of tax on its LLCs for the privilege of doing business in the state. So, for the most part, your state taxes will be pretty simple.

Additional Taxes

But you’re not out of the woods quite yet. There are a couple of circumstantial taxes your LLC will owe if it meets certain conditions. Alaska doesn’t have Sales or Use Taxes, but certain jurisdictions do, so if your LLC sells merchandise, you should check with your local government to find out. If your LLC hires employees, however, it will need to pay an Unemployment Security Tax.

Plus, depending on your LLC’s location, it may owe other local taxes to its city, municipality, or county. Consult your local government’s website to find out.

Licensing

The Articles of Organization may have already made your business legitimate, but your LLC will need to obtain a license before doing business.

File for this mandatory license online or by submitting a paper application. The business license costs $50 and must be renewed every year.

Your LLC might need other professional licenses depending on what type of business you do. Find a complete list of professional/occupational licenses here.

Certain cities and counties require their own specific licenses on top of any state ones, so you should also check with your local government.

Reporting

Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that Alaska requires all of its businesses to submit one important recurring filing: the Biennial Report.

Every other year, your LLC will need to file this report by January 2. If you formed your LLC in an even-numbered year, it will be due every subsequent even-numbered year, and if you formed it in an odd-numbered year, you’ll pay it every subsequent odd-numbered year.

You can file either online or using a paper form. The filing fee is $100 for domestic LLCs and $200 for foreign ones. File after February 1 and your report will incur a late fee. Continually ignore the Biennial Report and the state will dissolve your LLC.

And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Alaska LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.