Form an LLC in Alaska

Choosing a company name is the first and most important step in starting your LLC. Be sure to choose a name that complies with Alaska naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.

2. Is the name available in Alaska? Make sure the name you want isn't already taken by doing a name search on the Alaska Department of Commerce, Community, and Economic Development.

3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.

You are required to nominate an Alaska Registered Agent for your LLC.

What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.

Who can be a Registered Agent? a Registered Agent must be a resident of Alaska or a corporation, such as a registered agent service, authorized to transact business in Alaska. You may elect an individual within the company including yourself.

TIP

Recommended: Incfile provides the first year of registered agent service free with LLC formation ($49 + State Fees)

To register your LLC, you will need to file the Articles of Organization with the Alaska Department of Commerce, Community, and Economic Development. This can be done online or by mail.

When filing, you will need to state whether your LLC will be member-managed or manager-managed. We recommend learning more about these two options before you file.

An operating agreement is not required in Alaska, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Alaska LLC operating agreement guide.

What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.

Why do I need an EIN? An EIN is required for the following:

• To open a business bank account for the company
• For Federal and State tax purposes
• To hire employees for the company

Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

NOTE

FOR INTERNATIONAL APPLICANTS: you do not need an SSN to obtain an EIN. Learn more here.

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths.In Alabama, businesses with five or more employees are required by law to have workers' compensation insurance. Note that officers and LLC members are counted as employees. Get a free quote with ADP.

Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability. When signing legal documents on behalf of your company, you could follow this formula to avoid problems:

1. Formal name of your business
2. Your signature
3. Your name
4. Your position in the business as its authorized representative

See the image below for an example.

This ensures that you are signing on behalf of your LLC and not as yourself.

To operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.

The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.

Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.

Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:

• Federal: Use the U.S. Small Business Administration (SBA) guide.
• State: Visit the State of Alaska's Business Licensing website.
• Local: Contact your local county clerk and ask about local licenses and permits.

Depending on the nature of your business, you may be required to register for Alaska State Tax.

Sales Tax

Alaska is one of five states that does not impose a sales tax on taxable goods or services. Businesses without employees will not be responsible for any state tax in Alaska.

Employer Tax

If you have employees in Alaska, you will need to register for Unemployment Insurance Tax through the State of Alaska Website.

• Form 1065 Partnership Return (most multi-member LLCs use this form)
• Form 1040 Schedule C (most single-member LLCs use this form)

Alaska requires LLCs to file a biennial report with the Department of Commerce, Community and Economic Development. A biennial report typically includes basic information about your business and involves a filing fee.

If you plan to hire employees, stay compliant with the law by following these steps:

• Verify that new employees are able to work in the US
• Report employees as "new hires" to the State
• Provide workers' compensation insurance for employees
• Withhold employee taxes
• Print compliance posters and place them in visible areas of your work space

For more information check out Alaska Child Support Services Division's Frequently Asked Questions for new employee hires. 

It’s critical to get your books in order-- even if you haven’t officially opened for business. A well managed accounting system will help you:

• Track your business finances, including bills, expenses, and income.
• Simplify your annual tax filings.

The right software makes accounting easy. Look for software that:

• Syncs with your bank automatically.
• Matches transactions to invoices, bills and purchase orders.
• Can be accessed from your phone.

Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Alaska, you will need to register as a foreign LLC. This can be done online or by mail.

A Certificate of Good Standing, known in Alaska as a Certificate of Compliance, verifies that your LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:

• Seeking funding from banks or other lenders
• Forming your business as a foreign LLC in another state
• Obtaining or renewing specific business licenses or permits

You can order an Alaska Certificate of Compliance online.

If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your LLC, there are two broad steps:

• Close your business tax accounts
• File the Articles of Dissolution

When you are ready to dissolve your LLC, follow the steps in our Alaska LLC Dissolution Guide.