- Step 1. Naming Your Alaska LLC
- Step 2. Choosing a Registered Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- Open an LLC Today!
- Alaska LLC Resources
- Alaska LLC FAQs
Step 1. Naming Your Alaska LLC
First and foremost, you want to begin with naming your LLC. You can go any route you like, but it’s important to follow all the state-specific rules and guidelines. For example, Alaska has a few tidbits you need to know before coming up with your final choice.
For these reasons, there are some specific designations to be aware of. You’ll have to focus on the legally required designation, come up with a unique name, and understand restricted words. Below we’ll give you the breakdown for each one.
Legally Required Designation
According to Alaskan law, your business must have some form of limited liability company in the name. This can be the full phrase, an abbreviation, or even variations of the phrase. Furthermore, in Alaska, the company must include words like “company,” “corporation,” “incorporated,” or “limited in the name.”
That said, LLC is among the most common variations, so it’s the one we recommend using.
Here are some other examples of designations you can use for an LLC in Alaska:
Another thing to be aware of is the name of your company. While it is entirely up to you, there are restrictions. The good news is you can search for available names through resources like Alaska’s corporation database. This database can show you if your name has been taken and what similar names are out there.
When choosing a unique name, we also recommend you see what the competitors are up to. This is because companies are allowed to have similar names. Therefore, you should take steps to make your company’s name unique to prevent customers from getting confused. This is especially important in the early days when sales matter the most.
That said, you also want to be aware of some other things when it comes to finding a name:
- Companies can choose similar names before or after you name your company. What you do to combat this is up to you, so make sure your name is unique to the point where other companies won’t want to copy it.
- The URL is important. A URL brings users to your website (if you’re choosing to build one — in 2021, that’s something we recommend). If you’re not sure what name to choose, check if the URL is available, as it can be a deciding factor.
While choosing a name can be stressful, take your time and slow down. The last thing you want to do is rush the process.
Another thing to note is that you can’t have certain words in your company’s name. This is because the state and federal governments don’t want businesses to be mistaken for government agencies or similar agencies. For example, you can’t name your company “the Supreme Court” or “The Business of Congress.”
Additionally, you should not include curse words or profanity in your company’s name. You can end up offending customers and causing people to shop elsewhere. While there isn’t much legally saying you can’t do this, we recommend against it.
Other words to avoid are listed below:
- State or federal department
- Homeland Security
Based on these examples, you should have an idea of what you can’t name your company. As long as you’re not directly copying the government, you should be fine.
Step 2. Choosing a Registered Agent
If you own an LLC in Alaska, you’ll need a registered agent. These agents are required to collect legal documents, tax paperwork, and handle other parts of business paperwork. While having a registered agent may sound inconvenient in Alaska, this is something that most states require, so you’re not alone.
So, who is a registered agent, and who can you choose? According to Alaska’s section on registered agents, choosing one is not too restrictive. You can choose who you want as long as you’re a resident of the state. Moreover, if you choose an individual, they’re required to be a resident only in Alaska. That said, there aren’t many restrictions on choosing a resident agent.
Here are some common examples of registered agents:
- You, the owner
- A close friend
- Family members (over the age of 18)
- Other companies
- Businesses associates
When it comes to finding a registered agent, you have plenty of options. That said, we recommend working with family members and people close to you (or yourself) to prevent issues.
Step 3. File Your Articles of Organization
Once you have everything in order, it’s time to file the LLC Articles of Organization. When you begin the process of filing, your journey to becoming an LLC really begins. This paperwork is long and complicated, but we can help you through the process.
First and foremost, you must file the Articles of Organization with Alaska’s Division of Corporations, Business, and Professional Licensing. This organization has a portal that allows you to file online or in person; it all depends on your preferences.
When you’re ready to file, you’ll need to get some information out of the way. The state wants to know more about you, your business, and what your role in the community will be. Therefore, you must fill out a lot of information.
Here is what the Articles of Organization in Alaska require you to fill in:
- The name of theLLC
- The company’s purpose
- Where the LLC is located (primary address if there are multiple)
- The registered agent’s name, date of birth, and address
- The filing party’s return address
How to file
In Alaska, there are many ways to file your Articles of Organization. The state is flexible and does not penalize you for filing in different ways. That said, we’ll take you through some of the most common options and how much they may cost you.
- Mail-in costs $250
- The process takes a few months
- Expect delays of 15 days or more due to the covid-19 pandemic
- Online costs $250
- It will take a few days, but some are processed on the same day
- Accepted payment methods include Visa, Mastercard, American Express, and Discover
- There are no refunds for online filing in Alaska
- In-person costs a base rate of $250
- The rate at which it’s processed depends on how busy the office is
- We recommend going first thing in the morning to guarantee a spot
Regardless of which way you file, it will cost the same price. Therefore, we recommend going with the option you’re most comfortable with.
State ID number
Once you file the necessary paperwork, a few things will happen. First and foremost, if everything’s in order, Alaska will approve your company. Then, your company will be assigned a state ID number. The number is used to keep track of your company for tax and legal purposes. Therefore, you want to become familiar with this number.
Furthermore, we recommend keeping this number on file. This number is used like a social security number for your business. That said, you’ll use it for tax purposes, to communicate with the government, and more.
Step 4. Create an Operating Agreement
An operating agreement is only required in some states, but we always recommend creating one because it can help you stay organized and shield you from liabilities. That said, an operating agreement is not required in Alaska, so you don’t have to make one if you prefer not to.
However, creating an operating agreement can be worth it because it gives your business unique benefits and protections from issues that may be beyond your control.
Here are some examples of how an operating agreement can help:
- It includes details of how an LLC handles and pays taxes
- It shows how profits are shared and where the money goes
- It shows each owner’s or sole proprietor’s stake in the LLC
- You don’t need to send it to local or federal agencies
So, while you don’t need an operating agreement in Alaska, we recommend getting one anyway. It can protect your company from unwanted liabilities.
Step 5. Get an EIN/Tax ID Number
Another thing you’ll need when you start an LLC is a tax ID number. Taxes are important and you must pay them to avoid legal issues, debt, and other issues. Once your company is approved, you can apply for a tax ID number.
This tax ID number is also important because it allows your company to:
- Open bank accounts for the company
- Hire employees
- Pay taxes
The good news is it won’t cost you anything extra to get a tax ID number. The processing time is also faster than other steps in the LLC-creation process.
There are a few ways you can apply for a tax ID number:
If you want to get your company up and running quickly, filing online is your best bet. You can access the IRS EIN assistant here. Once you follow the steps, your company is ready to go and the IRS will send you a number almost immediately.
There are also some requirements to be aware of:
- You must name the responsible party or registered agent along with their social security number
- If your LLC is not yours, or it’s owned by another company from outside the country, you won’t be able to get your tax ID number online.
The second fastest way to get a tax ID number is to apply via fax. While fax is lower than online, it only takes the IRS a few days to approve your company and the number.
Here is what you can expect when you file via fax:
- It should take about 4 days using the IRS Form SS-4
- Applicants from outside the country who lack a social security number need to list “foreign” on line 7b of Form SS-4.
- You can fax the application to 855-641-6935.
The last method you can use is the mail-in option. While mailing is never a bad idea, it takes longer than other methods (about a month in some cases).
You can choose to follow any path that makes sense for you because they’re all viable. That said, online is typically the simplest and easiest.
Step 6. Keeping Your LLC Running
Once your LLC is operating and everything is set up, you must keep up with Alaska’s requirements. Every state has rules you must follow to remain in accordance with tax filing and other legal matters. Below we’ll help you remain compliant by showing you what you need to be aware of.
File a Biennial Report
First and foremost, you need to file a biennial report in Alaska. Every state has different requirements, but you can find specific information about Alaska here.
Additionally, you’ll have to pay a fee and ensure you have the right paperwork. Here are some guidelines for this.
Fees & required information
- $100 fee for the biennial report.
- The initial report is free.
- Form 1 applies to LLCs.
- Requires addresses (mailing or P.O. box), state/federal ID numbers, the purpose of the company, names of people, workers, officers, owners, and more.
- This covers calendar years even if an LLC does not operate under a separate fiscal system.
Timing & penalties
Operating an LLC also requires you to file paperwork and operations on time. If you fail to do so, you can end up with penalties that lead to additional costs. These costs vary in each state but there are federal ones, too.
When you start an LLC in Alaska, you need to file within the first 6 months. Furthermore, the first report that you file is free, so you don’t need to worry about mailing a check. Once you file for the first time, you need to file once every two years before January 2nd.
If you fail to file before February 1st, you’ll end up with a penalty fee that varies depending on how late you are. Typically, this fee ends up as a percentage of what you owe within the report.
The last thing you need to know is how much it costs to file. The fee in Alaska is lower than in most states, which is helpful. That said, it will cost $100 to file.
How to file
There are two ways to file in Alaska: in person or online. The fee for both is similar as long as you file at the appropriate time.
Get Necessary Permits & Licenses
Operating an LLC also requires permits, licenses, and more. This depends on what type of company you’re running, but there are licenses and permits required for almost every type of business. For example, if you own a restaurant, you must be compliant with state health codes, guidelines, and more.
Unfortunately, getting permits and licenses can depend on the county that you’re looking to work in. While state-wide licenses are the same, most permits are for a given township or village. Therefore, we recommend getting in touch with each county or town to ensure you can get up to code. You can find more contact information here.
Pay Federal, State & Local Taxes
Each LLC must pay its fair share of taxes. Most LLCs are considered pass-through tax organizations, which means the person who owns the LLC is liable to pay it. In other words, the corporation doesn’t pay the tax, but the people who work within it do.
That said, Alaska is a rare state. It’s one of the few that doesn’t have a state income tax. Therefore, LLCs in Alaska don’t need to pay taxes, and the members of the company don’t have to pay personal taxes, either.
Still, LLCs that operate in Alaska need to pay federal taxes and withhold tax money from employees in federal circumstances. If you need help with these forms, you can find it here.
If you have an LLC, you should also hire an accountant. Filing personal taxes is challenging enough, so working with an accountant is always a good idea. Moreover, filing with an accountant can save you time, money, and stress if the IRS comes knocking.
Keep Business & Personal Finances Separate
One of the most important things to do when you own an LLC is to keep everything separate. You want to keep your personal finances separate from your company’s finances to protect you from liabilities and ensure you pay the right amount of taxes.
Once you have your tax ID from the IRS, you should head to the bank so they can help you open separate accounts for your company. You can open credit lines, savings accounts, general funds, investment accounts, and more. That said, always listen to your bank and make sure you work with an accountant to make sure you get everything right.
To open an account, you’ll need the following documents:
- Your approved Articles of Organization in Alaska
- The SDAT number Alaska assigned to your LLC
- EIN confirmation
- Your personal ID (driver’s license)
- Your personal address
- Your business address
If you have copies of all your paperwork, you shouldn’t encounter any issues. That said, it’s always best to make copies. This way, you don’t lose anything or give the bank what you should give the state instead. Remember, work with an accountant and do your best to remain compliant, or the IRS can freeze the assets you keep at the bank.
Open an LLC Today!
Now that you know what to do, getting started should be easy. While starting an LLC seems like a hassle, the good news is that it doesn’t have to be. As long as all your paperwork is in order and you remain compliant, running an LLC is no less complicated than operating a sole proprietorship or partnership. That said, feel free to get creative and get started today!
Alaska LLC Resources
Here’s a look at resources that will establish and grow your LLC in Alaska:
- Naming your LLC: https://www.commerce.alaska.gov/web/cbpl/BusinessLicensing/SelectaBusinessName.aspx
- Forming your LLC: https://www.commerce.alaska.gov/web/cbpl/Corporations/CorpFormsFees/FormsbyEntity.aspx
- Getting federal tax ID number: IRS EIN assistant
- Filing an Alaska Biennial Report: https://www.commerce.alaska.gov/web/cbpl/Corporations/BiennialReports.aspx
- State, county, and village permits: https://www.commerce.alaska.gov/web/cbpl/BusinessLicensing/BusinessLicensingFAQs.aspx
- Federal licenses/permits: SBA list of federal licensing and permitting agencies
- Federal income tax withholding calculator: IRS income tax withholding assistant
Alaska LLC FAQs
When you start an LLC in Alaska, you’re bound to have questions. The good news? We have the answers!
The fee for starting an LLC in Alaska is $250. The fee does not change if you file online, via fax, by mail, or in person.
The good news about Alaska is there is no personal income tax. This is helpful because Alaska has pass-through LLCs. Pass-through LLCs place the tax burden on each member of the company instead of the company itself. Because there is no state income tax, you don’t have to worry about paying LLC income taxes in Alaska.
Alaska is not like most states when it comes to filing reports. Instead of having an annual report, Alaska has a biennial one that needs to be filed once every two years. These reports must be filed before January 2nd.