How to Start an LLC in Alaska: Cost and Registration Steps

If you are thinking of how to start an LLC in Alaska, you are not alone. After all, the state boasts tax incentives that enable you to cut back on your business expenses. Unless you are serving clients from other states, you will not need to pay sales taxes to the state.

And even when you cross the border, you will only be subject to the tax laws in the other states but will not need to pay a dime to Alaska regarding sales taxes.

Additionally, the state has a friendly business environment that allows you to capitalize on your strengths while hedging your risks regarding your weaknesses. If you don't want to the details you should consider top LLC companies to get help. But if you are ready to deal with it by yourself, this guide takes you through how to start an LLC in Alaska in a few simple steps. And how you can maintain your business and keep it running in the long term.

How to Form an LLC in Alaska: Step by Step

When you think of how to start an LLC in Alaska, you may feel a bit overwhelmed by what you need to do. But the thing is that the process is quite easy. And many people who have been through it describe it as a cakewalk owing to the simplicity of the state laws.

These short steps on how to form an LLC in Alaska will walk you through the most crucial steps. We have also included some bonuses that aid in the overall setup of your entity.

Step 1: Name Your LLC

What is a business without a name? Whenever you think of a business, you identify it by its name. And you thus want to choose a name that resonates with your products and is memorable to your clients. Even so, the name must comply with the given state laws; failure to which, you will need to start from square one. So, what must you consider when starting an LLC in Alaska?

• The name must include the term LLC in long form or in an abbreviation to identify the kind of entity you want to register. If you do not include this, your name will not go through;
• The name must not confuse the public by making it seem like the business offers state or federal services. For example, you cannot name your business XYZ State Department because people would think they can procure state services from you;
• The name must not allude that you offer professional services unless you are qualified to do so. For example, if you are an attorney, you can only use this term in your Alaska LLC registration if you have the license to prove it. You will later need to include this license and supporting paperwork when creating an LLC in Alaska;
• The name must be available. It is easy to assume that because you have come up with a unique name, nobody else has used it. But sometimes, your idea may be like that of another person or might be the same word for word. That is why you must conduct a search to ensure the name is up for grabs before forming an LLC in Alaska.

If your name meets all the above requirements, you can go ahead and use it. But before you do, check if anyone has used the domain. Else, you will end up with a business name, yet you cannot create a website under the same name which can confuse your clients. You should also consider if the name has been trademarked or if someone has already bagged it on social media.

Also, if you are not ready to start the business just yet but have found a good name, go ahead and reserve it by visiting the state online site or sending the reservation by mail to the following address:

State of Alaska

Department of Commerce, Community, and Economic Development

Division of Corporations, Business and Professional Licensing

PO Box 110806

Juneau, AK 99811

The process will cost you $25 but is worth it, especially if you are intent on using a specific name during the Alaska LLC registration.

Step 2: Appoint a Registered Agent to Get an LLC in Alaska

During your business activities, the state will want to keep tabs on your company and will often send you different paperwork. And because the state cannot send the documents to the business, it requires to have someone willing and able to accept the paperwork on its behalf.

Thus, the next LLC registration in Alaska step is to find someone or a company that can receive documents and orders on your behalf. You can appoint pretty much anyone to play this role of intermediary. Sometimes, people delegate this role to their attorneys or friends. However, you must ensure that the person is:

• At least 18 years old;
• Able to enter a contract (sound of mind);
• Available during business hours;
• Has a mailing and physical address in the state.

In the past, most people would list their addresses when filling in this option. However, that often proved challenging because:

1. They had to be present during the official state hours;
2. They had to reveal their addresses in public documents – for people who work from home, this was often not ideal;
3. They often suffered uncomfortable situations when they got served in front of their customers;
4. They were unable to keep up with the documents, which could sometimes get lost.

These issues were soon resolved, thanks to companies that started offering to play the intermediaries between companies and the state. These started accepting documents on the behalf of their clients, thus allowing them to deal with more pertinent issues. And when the filing period came around, the companies would send alerts to the business owners.

You can choose to represent yourself, hire someone else, or rely on these companies. The state does not care much about who plays this role. However, if you do not have someone accepting this service of process, you stand the risk of violating the law, missing out on court orders, and falling behind on your reports. And these are the issues that get businesses shut down. So, you must choose a reliable person or company to list under the file an LLC in Alaska step.

Step 3: File Your LLC Articles of Organization

Now that you have a name and a person/ company to represent you when communicating with the state, it is now time to establish your business. And this only happens when you fill in the Articles of Organization. This document entails:

• Who owns the business;
• Who runs the business;
• Who receives paperwork on behalf of the business;
• Other details integral to the formation of your company.

All the information provided must be accurate to allow your application to go through. Thus, you must review your paperwork before sending it to the state. Unfortunately, the application fees are not refundable and if you need to start over, you must reach into your pocket again – not to mention the time taken to go through the review process. You can avoid all these delays by following three simple LLC formation in Alaska steps:

1. Find the Articles of Organization

You have two options when filling in this document. You can do it online or you can do it offline and later send your document to the state. Both options are acceptable when it comes to how to get an LLC in Alaska, and your choice thus depends on your preference.Use this link to complete the application. If you want to file online, use the file online option. But if you want to fill it in manually, search for the PDF version of the document.

2. Fill in the Articles of Organization

At this point, you should have already settled on a name and figured out who will accept your business paperwork. If you are yet to do so, please refer to the earlier sections on how to get an LLC in Alaska. At this stage, you will need to include the following details:

• You must show what you want to name your business and ensure it complies with the state laws;
• You must detail why you want to start the business and what products or services you will provide – these must be legal according to the state regulations;
• You must provide your NAICS code – This code shows the category to which your business best belongs. If you are unsure what applies to your business, please use this resource to find out;
• You must provide the information of your registered agent – their name and address;
• You must state whether your business is managed by its members, or you will hire a manager to perform this role – this information must coincide with the operating agreement.

It is best to get all your stakeholders on board as you complete this document to ensure there are no errors. Mistakes at this point can lead to the rejection of your application. Moreover, if you need to amend your document details moving forward, you will be subject to a fee, which you can avoid by reviewing your document at this stage.

3. Submit the Articles of Organization

If you are sure that you have followed all the above steps on how to create an LLC in Alaska, you can now send the documents for review to the state. This process depends on how you have gone about the application. If you filled in your details online, you should complete the application online. But if you filled it manually, you would need to present the complete form to the state in any of the following ways:

By Mail 

If you would rather send the form in, please use the address below:

State of Alaska Corporations Section

P.O. Box 110806

Juneau, AK 99811

In Person

If you would like to visit the state offices and hand in the document, you can use the following address:

333 Willoughby Ave., 9th Floor

State Office Building

Juneau, AK 99801-1770

By Fax

You can also submit your document by fax by sending it to (907) 465-2974.

On average, processing an application takes about 10 to 15 business days. However, the timing is highly dependent on the backlog at the state offices. Thus, if you process yours during peak periods, you may need to wait longer. Some companies charge a fee to expedite your application and you can use them if you are in a hurry.

The state charges $250 for each application, and you will be subject to this fee if your application gets rejected and you need to file again. It is thus advisable to be cautious when filling in the paperwork to avoid extra costs and delays.

Step 4: Draft an Operating Agreement

Before you think about how to get an LLC in Alaska, it is always important to ensure that you are on the same page with your business partners. And the best way to do so is by drafting an Operating Agreement that dictates how you will run the business and what you will do in the event of disagreements. Knowing where you all stand and having rules that bind you is important because you spend less time on firefighting, and instead, focus on the business goal.

So, what should you include in this document?

• The names of the members of the organization;
• The powers that each member has and how many voting rights each person has – also include if some people have more power than others;
• How the capital share has been divided – detail the rationale used in dividing the capital, and if members can increase their equity in the business;
• How you will manage the business – you can either assign this role to the members, or you can include a manager who can step in. Both options have perks so you can discuss them as a group to see what works best for you;
• How you will share the proceeds of the business – this should include profits and losses. It can be equal, or you can follow the capital share in the business;
• How you will let go of or accept members – come up with a structure on how or if you will allow people to join the business and what criteria you will follow. Also, detail whether members can buy each other out and if external people can also enjoy these rights;
• How you will dissolve the business – companies end for several reasons. You should thus lay down the guidelines on why you can dissolve the business and what procedure you will follow. Include how you will share the profits, how many people will need to vote on the dissolution, and whether one person can buy the others out and continue operating the business;
• How you will resolve arising issues – businesses are not perfect, and you may run into issues along the way, with other people and amongst yourselves. Decide if you will deal with this based on the state laws or use alternative dispute resolution methods. Please note that where agreements are not in place, court and state laws take precedence and it is thus best to lay down what feels right for you.

Alaska state laws do not require you to have such an agreement between you and your business partners. However, having one is in your best interests and could protect your rights in the future. Thus, write down anything you feel is important in the running of your business and ensure it aligns with what you write in the Articles of Organization.

Step 5: Fulfill Alaska LLC Publication Requirement 

When it comes to how to register an LLC in Alaska, you will be happy to know that you will not need to publish your company once you get approval from the state. That is because this law only applies to businesses in New York, Arizona, and Nebraska. You can thus start operating your business the minute you get your letter of approval.

But to get the most out of your business, please refer to the guidelines below.

Step 6: Get an EIN for Your Alaska LLC Registration

We all know that paying taxes is important as it keeps you out of legal trouble. And once you get the approval to run your company, you will need to update your tax details to match those of an LLC. To do this, you will need to get an EIN, which is a 9-digit number through which you can identify your business to the IRS. But is this number important?

If you go by the law, you only need to get this number if you will hire employees. And you may thus not be required to get one if your business will not hire any people. Even so, getting this number plays a set of important roles. It allows you to:

• Open a bank account – Banks ask for this number when you want to open a business bank account;
• Appear professional;
• Enforce your corporate veil;
• Hire employees.

Thus, having one is more to your advantage than not having one. And if you’re concerned that getting one will raise your operational costs, that is not the case. This number is available at no charge to you. All you need is to have approval from the state to run your business, and you can make an application via:

Online

Please use this site to enter your details and get your tax number immediately after you have completed the process.

By mail

If an online application is not ideal, you can get one by mailing an application to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

By fax

You can as well send your application to (855) 641-6935.

And that marks our last step regarding how to apply for an LLC in Alaska.

LLC Alaska Cost: How Much is an LLC in AK?

The state filing cost stands at $250. This fee is non-refundable, and you should thus avoid making errors in your paperwork to avoid paying it again. Please note that the state filing fee is not the only LLC Alaska cost. You may be subject to the following additional expenses:

• Permits and licenses for businesses that need special permissions, e.g., someone running a bakery would need to secure a public health permit;
• Hiring a registered agent – if you will not represent yourself, you may need to pay for these services;
• Formation services – people who choose to delegate the formation role are subject to fees, based on the company or person whose services they use;
• Attorney services – if you use an attorney to draft your operating agreement or file your company paperwork, you will need to part with some money to compensate them for their time.

These are some examples of the extra services that could rack up the formation charges. So, when it comes to how much is an LLC in Alaska, you will thus need to calculate what applies to you; all factors considered.

First Tasks After Creating an LLC in Alaska

The above steps walk you through how to create an LLC in Alaska. But what’s next after getting a nod of approval from the state? You must keep reinforcing your corporate veil; else, you will be at risk of losing your personal assets. But that’s not all – you must take the necessary steps to strengthen your business in the following ways.

Insure Your Business

There are no guarantees in business. One minute, you can be making millions of dollars and the next minute, you are on the brink of shutting down. As such, you must protect yourself by taking up insurance which can help you weather the storms that come your way. Examples include:

• General liability: Even if you have a corporate veil, people will still come after your business regardless of whether you are on the wrong or right. And dealing with each case after the other can drain your business. The best way to avoid this is by taking this policy, which shields you from incurring losses accruing from such claims;
• Professional liability: If you are offering professional services, e.g., attorney services, someone can come after you and claim that you engaged in malpractice. Sometimes, it can owe to errors made in the line of business. And rather than pay these claims from your profits, you can protect yourself by having your insurer deal with these claims on your behalf;
• Workers’ compensation: Many things can happen while the business ensues. Your employees could get hurt or ill, or they could die. And based on the state laws, you should have insurance to cover your employees when such things happen – but this only applies if your company has at least 5 employees. Please note that your members also count as employees, and you might need to take up such covers to protect them.

Often, people think that taking insurance is an unnecessary LLC Alaska cost. But this could not be further from the truth. When you know that you are protected, it becomes easier to focus on the business goals and thus generate more revenue. Consider insuring yourself before going any further with your operations.

Open a Bank Account

Per the law, your company will operate under a corporate veil, which keeps you from incurring losses accruing from the business. That is why many people choose to start an LLC in Alaska and forego other entity options. But did you know that this benefit only applies to you if the separation is evident?

For example, if you bank your profits and salary in the same account, you will face the following issues:

• Accounting for taxes will be quite a headache;
• You will not have a clear line between what belongs to you and what belongs to the business;
• You will not appear credible to investors;
• You will not have much access to loans that can help you grow your business;
• You may end up using business revenue in personal pursuits.

That is why having a separate account is so important. It gives you access to numerous lines of credit, makes you look professional, eases your accounting, and protects you in the event of a lawsuit. Do not take chances with this requirement – it could be your saving grace.

Hire a Consultant/ Tax Expert

Running your accounts might seem like a walk in the park. But as your transactions increase, you will realize that keeping tabs on all of them might be next to impossible. That is why hiring someone else to do the math might be a good option for your business.

Besides, this move comes with several perks:

• You can know what you need to pay when the fiscal year ends and can reduce the taxes payable to the government;
• You can understand how much you need to pay to avoid getting into trouble with tax authorities;
• You can maintain your books of accounts;
• You can pay your employees on time;
• You can raise more funds by attracting investors with your well-kept books.

In the event of a claim, you will also have an easier time justifying your account of the events.

Advertise Your Business

Here is another Alaska LLC cost to consider. Your company will not make profits if you sit and wait for customers to find you. That rarely happens because so many companies market themselves, and customers do not need to go out of their way to find what they want. So, how can you get the word out?

• Create a website where you can showcase what you do;
• Create social media channels where you can interact with your target audience;
• Work on your SEO and SEM;
• Ask your loved ones to advertise what you do.

As the business grows, you will have access to more marketing means and will thus grow your reach.

Keep Your Company Compliant

Complying with state and federal laws is integral to the stability and growth of your business. Without compliance, you violate the existing laws and thus impede your ability to survive in the business environment. What must you consider as you go about how to open an LLC in Alaska?

• Secure the right permits: Depending on the business you open, you may be subject to a range of permits. For example, if you want to open a hospital, you must undergo several checks to get permission to set up such an establishment. And these will come at a price. You can check with the local government to figure out how much you will pay;
• Register for taxes: The last thing you want is to get into trouble with the authorities because you are not paying your dues. Understand what taxes you need to pay and to whom and ensure you follow through on these – do not delay when filing or paying them as the penalties can be hefty;
• File your report: Businesses in Alaska are subject to a biennial report, which details the state of your business. You can file the report online and pay the application fee of $100. Not filing this report can result in the dissolution of your business.

Knowing how to set up an LLC in Alaska is one thing. But following the key steps to keep your company from going under is another thing in its entirety. Kindly follow up on what responsibilities apply to business owners to avoid losing your business or piercing its corporate veil.

FAQs About How to Get an LLC in Alaska