The steps to get a business off the ground can feel quite intimidating. Even the initial formation process – getting your business entity formed with state authorities – can be complex. Fortunately, with a little guidance, you can be well on your way to running the business you’ve always wanted!
The specific steps you’ll need to take depend on the type of business you are forming. For many entrepreneurs, LLCs present the best option. Limited Liability Companies, or LLCs, offer several key benefits, including protection for your personal assets, should your business get sued.
For Alaska entrepreneurs, the process of forming an LLC is relatively straightforward. It will be handled by the Alaska Division of Corporations, Business, and Professional Licensing, and you can complete the application online or by mail. This guide will explain each step you need to take to start an LLC in Alaska.
1. Consider using an LLC service
If you follow the steps below, you can form an Alaska LLC on your own. However, it’s much simpler to use an LLC formation service. This can save business owners time while ensuring that everything is done accurately and efficiently.
There are many LLC services that can help you form businesses in Alaska. Some of the best are Incfile, Northwest Registered Agent, and ZenBusiness. Each of these companies charges a small fee to help you with the registration process, from start to finish. They are basically middlemen between Alaska’s Corporations Division and you.
An LLC service can expedite the entire process of getting your business properly formed. In addition, they can also help with related services and requirements. For instance, they can serve as your Registered Agent, which is a person or business appointed to receive legal documents for your LLC. Having a registered agent is required in Alaska (although you can be your own registered agent in many cases).
Check out our roundup of the Best LLC Services
2. Name your new company
Finding an available business name for your new LLC is the place that most entrepreneurs will need to start. The name you choose must not be taken (it must be significantly distinguishable from any other business in the state of Alaska). In addition to this requirement, Alaska LLC names are required to meet certain standards:
- The name must include “LLC”, “L.L.C.”, or “Limited Liability Company”
- The name cannot contain government-related words or phrases, such as “FBI”
- Certain words and phrases are protected, such as “doctor”, “lawyer” etc. To use one of these words, you will need to fill out additional paperwork.
You can brainstorm some ideas for your business name, and then compare them with what’s available. Use the online business name search at the Alaska Department of Commerce’s website to verify availability.
Using a Trade Name in Alaska
Keep in mind that you don’t necessarily need to use your official LLC name while conducting business in the state of Alaska. You can also use a “trade name”, otherwise known as a DBA or “doing business as”. For example, “Modern Automotive Solutions, LLC” could hold DBAs for “Anchorage Auto Mechanic” and “Modern Collision Specialists”.
Because of the use of trade names, you don’t have to worry too much about finding the “perfect” name for your LLC. You can simply file for a trade name (or multiple), which is simple and inexpensive. To do this, fill out this New Business Name form, and pay the $25 fee.
3. Appoint a Registered Agent
Each new business in the state of Alaska will need to appoint a qualified Registered Agent. This agent is responsible for being a point of contact for the business, primarily for legal forms, tax forms, lawsuits, etc. The Registered Agent must have a physical mailing address to accept important documents for your business (PO boxes are not acceptable).
The rules for who (or what) can be a registered agent are fairly simple: It must either be a resident of Alaska, or a company licensed to do business in the state.
So, if you yourself live in Alaska, have a physical mailing address, and don’t mind making this address public record, you can be your own registered agent. You can also appoint an employee.
If you live out of state, or you’d just prefer to keep your information more private, you can use a registered agent service. Northwest Registered Agent ($125/year) and ZenBusiness (from $99/year) are both great options. These services make sure everything is handled in a professional manner, while also keeping your personal information private. Keep in mind that a registered agent is an ongoing requirement; it’s not just for the first year.
Check out our roundup of the Best Registered Agent Services
4. File LLC Articles of Organization
The Articles of Organization are the main set of forms that you will need to submit in order to apply for a limited liability company in Alaska. This can be handled online, in-person, or via mail.
To file online:
- Go to this page on the Alaska Division of Corporations’ website
- Fill out all the requested information digitally
- Pay the $250 Alaska LLC fee via credit card, debit card or bank transfer
- Submit the application
To file by mail:
- Download File-08-484, “ARTICLES OF ORGANIZATION – Domestic Limited Liability Company”
- Fill out all the required information
- Write a check for $250 to State of Alaska Corporations Section
- Mail the completed application and check to:
State of Alaska Corporations Section
P.O. Box 110806
Juneau, AK 99811
Most of the form is fairly self-explanatory, but one common issue people run into is the “NAICS” code requirement. This is the North American Industry Classification System (NAICS) code, and it’s simply a 6-digit code indicating the type of business that your company is engaged in. To find the correct code for your business, you can search by keyword at Census.gov.
Note that these instructions are to form a domestic LLC in Alaska. If you are an existing LLC in another state and are looking to expand into Alaska, you’ll need to set up as a foreign LLC. The process is similar – fill out this form, and pay the $350 Alaska foreign LLC fee.
5. Complete an LLC operating agreement
Note: This is optional, but highly recommended for most businesses. You do not need to submit the document to any government agency, it’s simply an internal document for your own records.
An operating agreement is a document that lays out key details of your new business. One of its key functions is to establish ownership rights, so it’s particularly important for businesses with multiple owners. Having a clear operating agreement can help prevent future legal disputes and issues, so it’s quite important (although it’s not required).
To complete an operating agreement, you can either seek legal help or use a template online. Alternatively, services like ZenBusiness can also help, if you are using them to help form your new LLC.
6. Wait for your documents
Once your application has been submitted, you’ll need to wait for the state to process it. Applications sent by mail or fax typically take 10-15 business days to process, while online applications are handled more rapidly. Expedited processing may also be available, for an additional fee.
7. File the Alaska LLC initial report
Once you have your documents and have an Alaska Entity Number, you should file an Initial Report. This can be done online here, and some basic instructions can be found here. You can also lookup your business using its name, although you can’t file a report until the application has actually been processed.
8. Obtain a business license
A common misconception is that once you have your LLC paperwork you’re ready to do business. This is false – you’ll also need to obtain a business license.
To do this, simply go to this page on the Department of Commerce website, and follow the instructions.
Depending on the type of business, you may also need a Professional License. For instance, medical professionals will need specific state licenses, as well as business licenses, to operate in Alaska.
Steps to take once your business is formed
Once you’ve completed all the requirements above, there are a few additional things to keep in mind.
1. Obtain an EIN
An EIN, or employer identification number, is essentially a social security number for your business. It’s the numerical ID number that you will use on all federal tax forms, and an EIN is a requirement to hire employees. It may also be required to open a business bank account and engage in other important activities.
You can file for an EIN online at the Internal Revenue Service’s website. It’s a simple application that takes just a few minutes. There is no cost.
Because this is a federal number, it really has nothing to do with the state of Alaska. However, almost all businesses will want to obtain one, regardless of their state. Once you have your EIN, you’ll use this number for tax returns and other federal communications.
2. Open a business bank account
A business checking account is vital to the day-to-day operations of your company. It’s also important to help keep your business and personal finances separate. It’s a good idea to open an account right away.
To open an account, you’ll need your formation paperwork, business license, and EIN. Most banks and credit unions offer business accounts, so simply look around for a solution that meets your needs.
3. Keep your LLC in good standing
There are a variety of ongoing requirements that you’ll need to stay on top of in order to keep your business in good standing with state, federal, and even local governments. Some things to keep in mind include:
- Filing the Alaska Corporate Net Income Tax (annual)
- Filing federal business tax returns (annual)
- Paying and filing quarterly estimated taxes (quarterly)
- Renewing business licenses and permits (annual)
- Filing payroll tax returns, if you have employees
- Filing county/city-level tax returns, if necessary
- Keeping an active Registered Agent for the life of your business
- Applying for new licenses or permits if you expand or enter new areas
The ongoing requirements of running a business can certainly feel overwhelming, but it’s best to start off on the right foot. By staying on top of requirements from day one, you can ensure you do everything accurately. It’s wise to research requirements immediately, and then make calendar reminders for each so that you never miss anything.