Are you wondering how to start an LLC in Alaska? well, you have landed in the right place as this free guide will help you form Alaska LLC by yourself. I have covered everything in detail from forming to keeping your LLC in good standing.
How Much will it cost?
- The filing fee for an article of organization is $250 in Alaska.
- The additional fee is a biennial report which costs $100 every two years.
- Also, you need to obtain a business license which costs $50 every year
If you are looking to learn more Check out LLC Costs In Alaska
How Much Time will It take to get approved?
It depends on which method you choose. If you file it online it will be approved immediately. If you file via mail it will take 10 to 15 business days. I recommend filing it online for quicker and easier formation.
If you are still wondering I have covered everything about LLC approval time in Alaska.
Steps to Start An LLC In Alaska
You need to follow six basic steps to form an LLC in Alaska which are following:
- Choose a name for your Alaska LLC
- Appoint a Registered Agent
- File articles of organization
- Make an operating agreement
- Obtain the EIN from the IRS
- File initial and biennial report
If you are looking to form an LLC by yourself follow this guide till the end.
However, do you want to save time and don’t want to go through the hassle of forming yourself? Then you can hire a company to do it for you. It will save you time and make your filing error-free.
The companies I recommend are:
I have handpicked these companies after extensive research I spent two months in research before picking them. You can choose any according to your needs and budget.
Do not want the services? It’s okay you can file it yourself if you want. Follow the guide below.
Here are steps in detail for forming an LLC in Alaska
Let’s see the steps in detail to help you form your LLC.
1. Choose a name for your Alaska LLC
A combination of legal requirements, marketing considerations, and personal preference is involved in the selection of a name for your Alaska LLC. The following is a comprehensive guide that will assist you in the selection of the appropriate name for your LLC:
Compliance of State Law:
Uniqueness: The name of your LLC must be distinct from the names of other business entities that are already on file with the Alaska Division of Corporations, Business, and Professional Licensing. To prevent confusion, refrain from selecting names that are excessively similar to those of existing businesses.
Required Words: Your business name must contain the term “Limited Liability Company” or one of its abbreviations (LLC or L.L.C.).
Restricted Words: It is advisable to refrain from using terms that may be interpreted as a government agency (e.g., the Federal Bureau of Investigation, the Treasury Department, or the State Department) or that suggest a purpose that is not aligned with the articles of organization of your LLC (e.g., “bank,” “attorney,” or “university”), unless they are appropriately licensed.
Search for the Availability of a Name:
To determine whether your desired name is available, utilize the Alaska Business Entity Search utility.
If you are not yet prepared to register your LLC, you may wish to consider reserving your name. In Alaska, it is possible to reserve a name for a period of 120 days.
Regarding the organization’s identity:
Relevance: Select a name that accurately depicts the nature of your business and clearly identifies the services or products you provide.
Memorability: Customers will be more likely to remember and locate your business if it is simple to pronounce and memorable.
Branding: Consider the appearance of the name on marketing materials, online, and as part of a logo. Your branding and marketing strategy are in alignment with a strong name.
Verify the availability of the domain:
In the current digital era, a domain name that is consistent with one’s online identity is advantageous for establishing an online presence. Ensure that the domain is available in order to establish a website that consumers can readily associate with your LLC.
Future Growth Should Be Considered:
Select a name that does not restrict your business to a particular product or location, unless you are certain that you will not expand into new areas or lines of business.
Receive Feedback:
To obtain feedback on the allure of your name ideas and any potential concerns they may have, consider sharing them with friends, family, or potential customers.
Professional Assistance:
It is advisable to seek the advice of a professional, such as an attorney, to guarantee that the name you have selected is in compliance with all legal requirements and does not infringe on any trademarks.
By adhering to these procedures, you can select a name for your Alaska LLC that is both effective and appropriate, meets legal requirements, and aligns with your business’s operational and branding objectives.
2. Appoint A Registered Agent
The second step after choosing an LLC name is appointing a registered agent for Alaska LLC
In Alaska, a registered agent for an LLC is the official contact responsible for receiving legal documents, government communications, and other official notices on behalf of the business. The following are several critical details regarding registered agents in Alaska:
Legal Obligation: A registered agent is required for each LLC that conducts business in Alaska. This is a requirement for adhering to state statutes.
Eligibility: The enrolled agent must be a corporation authorized to conduct business in Alaska or a resident of Alaska. They must have a tangible street address in the state (P.O. boxes are not permitted) where they can receive documents in person.
Responsibilities and Purpose: The registered agent’s primary responsibility is to guarantee that the LLC receives and forwards any significant legal documents, including lawsuit papers or official government notices. This guarantees that the LLC does not neglect critical deadlines or legal obligations.
Commercial registered agents: A significant number of limited liability companies (LLCs) elect to engage a commercial registered agent service. These services provide privacy and dependability, particularly when the business lacks a permanent office or the members do not reside in Alaska.
Change of Registered Agent: LLCs may modify their registered agent by submitting the appropriate notice to the Alaska Division of Corporations, Business and Professional Licensing and paying the applicable fee.
It is imperative to select an appropriate registered agent to guarantee that your LLC is in compliance with state laws and receives all critical communications on time.
I recommend Registered Agents Inc. for Your LLC as a number 1 choice
Another company I recommend is Northwest Registered Agent
3. File Articles of Organization
These are the simple actions you need to take to form an Alaska limited liability company (LLC):
The Articles of Organization must be prepared: Indicate on the necessary form if the limited liability company is controlled by members or by a manager, as well as the name and address of the registered agent.
Fill Out the Form and Send It In: Submit the Articles of Organization to the Division of Corporations, Business, and Professional Licensing in Alaska either electronically or by regular mail. In most cases, $250 will be required to file.
You will receive confirmation from the state once your LLC is formally registered after the processing is complete.
In order to form an Alaska limited liability company (LLC), you must follow these procedures.
4. Make an operating agreement
There are a few main reasons why an operating agreement is important for an Alaska LLC:
Structure Clarity: It explains how the LLC is run, including whether it is run by members or by selected managers. This makes it clear what everyone’s job is in the company.
Governance: The operating agreement spells out how the LLC is run, including who makes decisions, who has the right to vote, and how meetings should be run. Setting up agreed-upon procedures helps keep members from fighting with each other.
Financial Management: This section spells out how the members will handle money, including donations, how gains and losses will be split, and how the financial accounts will be handled. This is very important for the LLC to be financially open and responsible.
Succession Planning: The agreement can say what should happen if a member of the LLC dies, becomes unable to work, or wants to leave. This keeps things stable and consistent.
Customization of Rules: Alaska’s state laws set the rules for LLCs by default, but members can change the rules that guide their business by signing an operating agreement. This change can better meet the wants of the group and its members.
Legal Protection: An official running agreement gives the LLC more authority and helps make sure that courts recognize the members’ limited responsibility. In legal cases, it can be very important to show that the LLC is a different organization from its members.
Avoid State Default Rules: If you don’t have an operating agreement, the state will decide what to do, which might not be best for the members. By making an operating agreement, members can get rid of set rules they don’t like and make the LLC’s management and operations fit their needs.
In short, an operating agreement is necessary to make sure that everyone in an LLC knows how it works and what the rules are. It also gives everyone a way to work together to avoid problems and run the business better.
5. Obtain the EIN From the IRS
A business in Alaska needs an Employer Identification Number (EIN) for several important reasons, including:
When you file your taxes, the EIN is like a social security number for your business. The IRS uses it to identify your LLC for all tax reasons.
Opening Bank Accounts: To open a business bank account at most banks, you need an EIN. This keeps your personal money separate from the money you make from your business. This is important for tax and accounting reasons.
Hiring People: If your LLC wants to hire people, you’ll need an EIN to set up payments. This is because you’ll need it to send tax forms and other paperwork to the IRS and state agencies.
Getting Business Credit: An EIN can help your LLC get its own credit report, different from your own. This helps when you’re asking for loans or credit lines for your business.
Licenses and Permits: An EIN may be needed to register for or apply for some business licenses and permits.
It’s easy to get an EIN, and you can do it for free on the IRS website. If you are a non-US resident you cannot obtain the EIN online but you still can get it free. See below I covered the steps.
How to Obtain EIN as a US Resident As well As Non-US Resident
For people in the U.S. and other countries who want to start a business or follow IRS rules, getting an Employer Identification Number (EIN) is a necessary step. This is how both groups can get an EIN:
Apply online if you live in the U.S.
This is the best and fastest way to do it. People who live in the U.S. can apply for an EIN online at the IRS website.
You can use the service from 7 a.m. to 10 p.m. EST, Monday through Friday.
To apply online, you need to have a legal National Identification Number (NIN) or Social Security Number (SSN).
The EIN is given out right away after the application is finished.
Send by fax or mail:
Form SS-4 can be filled out and faxed to the IRS. The IRS will send the EIN within four business days if all the information given is correct.
You can also send the IRS the filled-out Form SS-4 by mail. It might take four weeks to finish this.
For People Who Don’t Live in the U.S. Telephone Application:
People who don’t live in the U.S. can’t ask for an EIN online. They should call the IRS at +1 (267) 941-1099 instead.
- This number is not a toll-free one.
- The person applying for the EIN must be allowed to do so and be able to answer questions about Form SS-4,
- Application for Employer Identification Number.
- The EIN is given out during the call.
Send by fax or mail:
People who don’t live in the U.S. can also apply by sending Form SS-4 to the IRS by mail or fax. If you fax the information properly, the EIN is generally sent within four business days. The process can take up to six weeks longer if you mail it.
To get the EIN, make sure you give a fax number or address in the U.S. or another country.
General Tips for People Living and Not Living in the United States:
Need More Information: Form SS-4 must be filled out fully and correctly whether you apply online, by fax, or by mail. The name and fiscal ID number (SSN, ITIN, or EIN) of the main officer, general partner, donor, owner, or trustor are examples of information that is needed.
Follow-up: Should you choose to mail or fax your application, get in touch with the IRS again if you don’t get your EIN by the due date.
No matter where the business owner lives in the world, this process is necessary to run and manage the business legally.
6. File your Initial Report & Biennial Report
LLCs are mandated to submit an Initial Report and subsequent Biennial Reports in Alaska. The following is a concise guide on how to accomplish both:
1. Initial Report
The Initial Report for an Alaska LLC must be submitted within six months of its formation. This report is a straightforward document that requests that you furnish current information regarding your LLC, including the names and addresses of the members and administrators.
How to File:
Online: The Initial Report may be submitted online via the Corporations Section website of the Alaska Department of Commerce, Community, and Economic Development. This is the most expeditious approach.
By mail: Alternatively, you may obtain the form from the same website, complete it, and send it to the State of Alaska Corporations Section via mail.
2. Biennial Report
Alaska LLCs are required to submit a Biennial Report every two years following the Initial Report. The report is required by January 2nd of the filing year. This report provides the state with the most recent information regarding any modifications to the management structure, addresses, or other relevant information of your LLC.
What is the most expedient method for filing your Biennial Report?
Online: This is the most convenient method. Simply access the online filing system for the Alaska Corporations Section, revise any required information, and submit your report.
By mail: The Biennial Report form may be downloaded, completed, and submitted to the Corporations Section along with the filing fee.
Fees Initial Report: The Initial Report is exempt from a filing fee.
Biennial Report: The filing charge for the Biennial Report is $100.
It is essential to submit these reports on time to preserve the good standing of your LLC in Alaska. Late filings may result in penalties and may jeopardize the status of your LLC.
What do I do after my Alaska LLC is approved?
Once your Alaska LLC is accepted, here are some things you should do to make sure your business is set up properly and stays in line with the law:
Get an EIN: Go to the IRS and ask for an Employer Identification Number (EIN). This is necessary to file taxes, establish a bank account, and hire staff.
Opening a Bank Account: Use your LLC name and EIN to open a business bank account. This helps you keep your personal and work money separate and makes it easy to do your taxes and keep your books.
Operating Agreement: An LLC does not have to have an operating agreement in Alaska, but it is strongly suggested that one be made. This paper is only for members of your LLC and explains how it is run and how the management works.
Business Licenses and Permits: Find out if your company needs any special licenses or permits to run properly in your city, state, or country. This can be very different based on the business and where it is located.
Annual Report: You must file your first report within six months of the firm’s creation, and then you must file your annual report every year by January 2nd. This is what the state of Alaska needs to keep your LLC in good standing.
Tax Requirements: Know and follow the tax rules for the federal, state, and local governments. This could mean signing up for state taxes, like sales tax or income tax, if they apply.
Insurance: Think about whether or not your business needs insurance. General liability insurance, professional liability insurance, and workers’ compensation are all common types of business insurance.
Bookkeeping and Accounting: To keep track of your money and keep correct records, set up an accounting system right away. This will help with both following the rules and making long-term plans for the business.
Business Plan: Write up a full business plan if you haven’t already. This will help you make choices and plans for your business.
When you do these things, you can make it easier for your Alaska LLC to run smoothly and follow all the rules and laws that apply.
How My Alaska LLC Will Be Taxed?
The taxation of your Alaska LLC will depend on the structure you select and the details of your business operations. Here is a summary of the typical taxation methods for LLCs:
Standard Taxation:
- By default, single-member LLCs are regarded as disregarded entities, indicating that the IRS does not view them as distinct from their owners for tax purposes. Profits and losses are detailed on the owner’s individual tax returns through Schedule C.
- By default, multi-member LLCs are classified as partnerships. The LLC does not directly pay taxes on its profits; rather, the profits and losses are transferred to the members for tax purposes. Every individual submits their portion of these on their personal tax filings.
Corporate Taxation:
- Your LLC has the option to be taxed as a corporation. This requires the submission of IRS Form 8832 to obtain C corporation status or Form 2553 to achieve S corporation status. The choice will hinge on your business objectives and the possible tax advantages.
- C Corporations face taxation independently from their owners, adhering to corporate tax rates. Profits are subject to taxation at the corporate level, and dividends distributed to shareholders incur additional taxation at their individual tax rates.
- S Corporations function as pass-through entities similar to partnerships, yet they provide potential savings on self-employment taxes. Profits and certain losses are reflected on the owners’ tax returns, allowing owners to potentially categorize a portion of their income as salary (which is subject to employment taxes) and another portion as dividends, which are exempt from self-employment taxes.
State Taxes:
Alaska lacks a state sales tax and individual income tax, making state tax compliance easier for LLCs. Depending on your business’s location, you may be liable for local sales taxes and additional local taxes.
If your LLC is classified as a C corporation, it could be liable for the Alaska corporate income tax. The rate varies from 0% to 9.4% based on the corporation’s taxable income.
Additional Taxes:
Your business type and location may subject you to additional taxes, including payroll tax if you employ staff, or taxes specific to your industry.
Consulting with a tax professional is advisable to gain a comprehensive understanding of how your LLC will be taxed and to plan appropriately, particularly if you are thinking about electing corporate taxation or have specific inquiries regarding local tax obligations in Alaska.
How To Start An LLC In Alaska FAQ
Below I have answered the most asked questions.
How much does it cost to start an LLC in Alaska?
The Articles of Organization filing fee is the main expense of starting an LLC in Alaska.
A breakdown:
$250 Articles of Organization filing fee. This is a one-time charge paid to the Alaska Division of Corporations when submitting Articles of Organization online or by mail.
Registered Agent Fee: Service providers charge differently. You may be your own registered agent for free, but professional services cost $50–300 each year.
Annual business license: $50. All Alaskan LLCs need licenses.
Optional Costs: Legal, accounting and business-specific permissions and licenses may cost you.
These are the basic expenditures, but add recurring compliance charges like the $100 biannual report fee every two years.
Is Alaska a good state to form an LLC?
Alaska may be a desirable LLC formation location based on your company goals.
Consider these factors:
Alaska has no sales or income taxes, which may benefit company owners trying to reduce their tax obligations.
anonymity: Alaska does not require members or managers to be named on the Articles of Organization, giving LLC owners some anonymity.
Costs: Alaska has a high LLC formation charge and no annual report requirement, eliminating state fees. A biannual report and Business License is required and costs money.
Legal Environment: Alaska has a stable, business-friendly legal environment.
Alaska has extensive asset protection laws, including clauses protecting LLC members from creditors.
Each company situation is different, so examine how these aspects fit with your business strategies and financial goals. If your firm has special requirements, Alaska may not be the best state for your LLC.
Do LLCs pay taxes in Alaska?
In Alaska, LLCs do not pay income taxes directly to the state, as there is no state income tax in Alaska. Nonetheless, the income generated by the LLC is subject to taxation on the personal tax returns of the members, according to their individual tax rates, at the federal level.
In Alaska, LLCs might still be required to pay various other taxes based on their business operations. For instance:
Sales and Use Taxes: If the LLC sells goods to customers in Alaska, it may be required to collect and remit local sales taxes, as local jurisdictions in Alaska have the authority to impose their own sales taxes despite the absence of a state-level sales tax.
Employment Taxes: If your LLC employs individuals, it is required to manage employment taxes, including withholding taxes and FICA (Social Security and Medicare).
If an LLC chooses to be classified as a corporation for federal tax purposes, it might be required to pay the federal corporate income tax.
Additional State Taxes: Based on the type of business you run and its operational location, there may be other specific state taxes that apply, including fishery taxes or oil and gas taxes that are pertinent in Alaska.
Consulting with a tax professional is crucial to grasp the specific tax obligations for your LLC in Alaska, particularly given the significant variations in local taxes.
Wrapping it up!
If you are still here you know how to form an LLC in Alaska by yourself. I have covered everything in this guide from forming an LLC to keeping it in good standing. I even answered the most asked questions about Alaska LLC.
If you do have more questions you can ask me in the comments section below.
Disclaimer:
The material on this website is intended for general information purposes only and should not be construed as legal, tax, or financial advice. Laws and regulations vary by jurisdiction and might change over time. It is critical to obtain specialized guidance that fits your individual situation. The opinions presented here are purely those of the writers and should not be considered professional advice. For any legal or tax-related issues, it is best to speak with a certified specialist who can give specialized advice based on your specific circumstance.
