Guide to Setting Up an Alaska LLC

Step 1: Name your Alaska LLC

Choose a name for your LLC in Alaska. This is a major step since naming your LLC gives it its identity. Your name can be anything you’d like as long as it falls in line with the rules the state has established. Come up with a list and make sure each has marketability value while being catchy. If you need some help, we have an article on coming up with a business name.

Alaska Business Name Checklist

If you’re looking to create a perfect business name for your Alaska LLC, here are the steps you’ll need to complete. 

• Check that your name is unique and available.
  • Run an Alaska business name search
  • Run a trademark search with the United States
  • Check that there is an available domain name for your name (optional, but highly recommended for building a business website)
• Include and exclude certain words and phrases
  • Include a designator like “LLC” or “limited liability company” and their abbreviations
  • Exclude designators of other business types (Inc., Corporation, etc.), along with the words “city,” “borough,” “village,” or terms that imply the business is a municipality

If you meet these requirements, you’ll be well on your way to creating a compliant business name.

Reserving an LLC Business Name

If you’ve found a name you like but you’re not quite ready to start your business, don’t worry. Alaska allows you to reserve your business name. To do so, you’ll need to file the Business Name Reservation form with the Division of Corporations. There is a $25 filing fee. Filing a name reservation will give you 120 days of protection for your name (and you can renew the reservation up to two times). For more detailed information about this process, check out the Department of Commerce website.

LLC Alaska: Getting an Assumed Name

Some businesses adopt an “assumed name” if they wish to operate under a name that differs from their legal name. This name is also known as a “doing business as” (DBA) name. You’ll need to request one with the Division of Corporations. In order to do this, you’ll need to first obtain a corresponding Alaska Business License. Once you’ve done that, you’ll fill out and submit a Name Change Form form for a small filing fee.

Check out our article about Alaska DBA names.

Step 2: Appoint a registered agent in Alaska

Name an Alaska LLC registered agent. Early in our guide, we mentioned having to get a registered agent for your business. In Alaska, all LLCs must have this agent (Alaska Statute 10.50.055). In other states, this person or entity is sometimes referred to as a resident agent, statutory agent, or agent for service of process. 

What is an Alaska registered agent?

A registered agent can be either a resident of Alaska or a domestic or foreign corporation authorized to do business in the state. Their responsibilities include receiving legal notices (such as notices of lawsuits) and certain government correspondence on behalf of the business. In order to remain in good standing with the state, you must always have a registered agent for the business.

Alaska Registered Agent Requirements

Alaska has pretty straightforward legal requirements for who can serve as registered agent for a limited liability company. According to Alaska law, the registered agent must: 

• Be an individual resident of the state who is 18 years old or older OR a corporation with authority to do business in the state (other business structures are not permitted)
• Have a physical address in the state (no P.O. boxes)
• Be present at that address during all regular business hours
• Not be the LLC itself

Anyone who meets those requirements can serve as a registered agent. As a result, a lot of business owners choose between serving as their own agent, having a friend or family member fill the role, or hiring a third party registered agent service. 

Benefits of Hiring a Registered Agent Service

Even if you are allowed to serve as your own registered agent, it’s recommended to hire a registered agent service. Let’s talk about why that is. A registered agent service: 

• Frees you up to run errands, take sick days, and go on vacation so you’re not tied down to a single address on all normal business days
• Helps you keep your important communication organized
• Allows you to change your business location without filing additional state paperwork
• Prevents embarrassment of being served with a lawsuit in front of a client, employee, or business partner
• Ensures a process server can always find your agent, meaning you never lose the opportunity to defend yourself in court or get penalized for not having an agent

Here at ZenBusiness, we can fill this role for you. Our registered agent service helps you comply with Alaska registered agent requirements seamlessly and easily.

Step 3: File Alaska Articles of Organization

Fill out and file your Articles of Organization with the Alaska Division of Corporations. When this formation document is approved, your LLC becomes official. This is a crucial document, so make sure that all of the information on it is truthful and correct. If filing legal forms like this makes you angsty, then look into our business formation plans to make sure that everything on your formation documents is correct.

Although we can file the Articles for you, if you prefer to do it yourself, then continue on.

Information Needed for Your Articles of Organization

The Articles of Organization requires specific information in order to be approved. Here are a few details you’ll need to include in your State of Alaska LLC application:

• The LLC’s name. It must fit the rules we went over in Step 1.
• The purpose for which the company is being formed and the North American Industry Classification System (NAICS) code. You can find your appropriate code on the Division of Corporations “Line of Business/Alaska NAICS Code” webpage.
• The registered agent’s name, physical address, and mailing address.
• If the LLC will be member-managed or manager-managed.
• The signature of the LLC’s organizer.
• Attach any needed statements. In addition to the basic required information, you may also choose to include optional provisions with your Articles of Organization filing. To do so, you can simply attach additional pages to your filing with your desired optional provisions and other articles as authorized under Alaska law.

Bear in mind that this information will become public record once your LLC is approved.

How to File Your Articles of Organization in Alaska

When you’re ready to file your Alaska Articles of Organization, you can do so in two ways. To file online, you’ll go to the Division of Corporations “Filing by Entity Type” webpage and choose the LLC structure. Choose the Articles of Organization online option and follow the instructions. The good news is that you won’t need to create an account to do so.

For a mail filing, you’ll go to that same webpage and choose the Articles of Organization (PDF) option. You can print the document, fill it out, and mail it to the Division of Corporations. Both methods have a filing fee of $250. The processing time is around 10-15 business days.

After filing the Articles, you must submit an Initial Report within six months. You don’t need to pay a fee with the Initial Report. For more information on this, see our Alaska Initial Report guide.

Member-Managed or Manager-Managed?

In your Articles of Organization, you’ll be asked if you want a member-managed LLC or a manager-managed LLC. The former sees the business managed by the members and the latter sees it managed by managers.

If you decide to have a manager-managed LLC, then you and any other members must name a person (either one of the members or an outside party) to be a manager. An LLC can also have multiple managers.

Whichever management structure you choose, you’ll make this designation in the Articles of Organization and can also list it in your operating agreement.

Step 4: Create an operating agreement

Draft an Alaska LLC operating agreement. This document sets the internal rules and policies of the business. You can establish these regulations however you’d like as long as you don’t violate any laws. An Alaska operating agreement isn’t legally required for Alaska LLC registration. However, drafting one can serve your business’s best interests.

There’s no official comprehensive operating agreement guide to follow, so you’ll have some freedom in creating yours. 

Alaska Operating Agreement Benefits

We mentioned above that LLCs aren’t legally required to have an operating agreement. The benefits of having one may convince you to do so. They include:

• Establishing how the LLC will run. In the absence of this agreement, the business will be subject to the state’s default LLC laws.
• Preventing and settling disputes between members by establishing in writing each’s responsibilities, powers, and privileges.
• Establishing whether the business will be member-managed or manager-managed. You’ll first choose a structure in your Articles of Organization, but you can also include it in your agreement.
• Further establishing the LLC’s liability protection. The LLC business model already does this by default, but with an operating agreement, you can reinforce that point in the eyes of the courts should anyone ever question it.
• Detailing how members will be added or removed from the business. You can detail the reasons for removal and what will happen to that member’s ownership portion. You can also establish requirements for people to join the business.
• Creating a succession plan if a member dies, leaves, retires, or is removed. Going off the previous point, explain what will happen to this person’s ownership portion. Will it be sold to another party or absorbed by the current members? A succession plan can really be useful if you’re the only owner of the LLC.

What should I include in my Alaska LLC’s operating agreement?

You’re free to create the operating agreement however you want and include whatever you feel is important to help your business run smoothly. If you’ve never put one together before and aren’t sure what to add, here are some options:

• Establish ownership portions: You can split the LLC into ownership percentages among the members. For example, if there are three members, one can own 50% while the other two own 25% each. It’s entirely up to you and the other members.
• Assign member responsibilities: Which member is responsible for making business deals? Who will oversee the LLC’s finances? You can list each member’s responsibilities in the operating agreement. You can also establish the voting powers of each to settle business decisions.

• Create rules for member removal and additions: For removals, be sure to detail why a member would be removed and what will happen to their ownership portion. For additions, set requirements for joining the LLC.
• Steps to dissolve the LLC: Establish reasons for why the LLC would close down. You should detail what will happen to its assets. You’ll also need to file Articles of Dissolution with the Division of Corporations.

If you’re feeling unsure about how to draft an operating agreement, then check out our customizable template to help get you started. 

Do I need an operating agreement if I’m the only owner?

A solid operating agreement helps the members of an LLC lay out the business’s rules and policies. If you plan to be the business’s only owner, then you might think that this document isn’t needed. After all, no one else will need to know the LLC’s rules but you, right? Consider drafting one anyway, though, since this agreement can benefit you in other ways.

One includes creating a plan of succession, as we mentioned above. As the only owner, if something happens to you, what will become of the business? Do you want it handed over to someone else, or would you prefer it be dissolved? An operating agreement can clarify your wishes.

Another reason to create an operating agreement is that it can come in handy if you ever need to convince investors or lenders to help your business. The operating agreement can show that you’ve planned your business well and have things covered. It also provides further evidence that you and the business are separate entities if someone ever tries to prove otherwise in court.

Step 5: Apply for an EIN

Apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). An EIN, also known as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number, is like a Social Security number for your company. It identifies your business when the time comes to file taxes. An EIN is required if you have multiple owners, hire employees, or meet any of the IRS’s other conditions. Most banks also require an EIN to open a business bank account. We offer an EIN service to handle the process for you.

State of Alaska LLC Taxes

Alaska has a few unique tax nuances you’ll want to be aware of. For starters, Alaska doesn’t have a personal income tax rate, so LLCs that maintain their default tax status won’t owe income taxes at the state level. But if you opt to be taxed as a corporation, you’ll make state income tax payments, too. 

Alaska also doesn’t impose a statewide sales tax, but there’s a chance your city or county might. You’ll need to check with your local revenue department for full details about local sales taxes. Beyond that, Alaska charges a few industry-specific taxes, especially for alcoholic beverages. 

For more information about business taxes, check out the Alaska Department of Revenue’s website. It’s also highly recommended to chat with an Alaska tax attorney to get customized guidance for your unique business situation.

Can filing as an S corp lower my taxes?

LLCs are known for being flexible in their management, but did you know that they’re also quite flexible with their tax obligations? By default, a single-member LLC is taxed as a sole proprietorship while multi-member LLCs are taxed as partnerships. This avoids “double taxation,” in which profits are taxed at both the business level and the individual owner level. But an LLC can also elect to be taxed as a C corporation or S corporation.

A C corp designation comes with double taxation. Although this can be a drawback, some LLCs may find the benefits of a C corp election worth the double taxation. For example, C corps come with the most tax deductions.

An LLC with an S corp designation retains pass-through taxation, but it also has the potential to save money on self-employment taxes. This happens when the members become “employee-owners,” allowing you to split your income between your salary and the company’s profits. That way, you only pay the taxes earmarked for Social Security and Medicare on your salary, not on your other profits. You may have other tax liabilities regarding your profits, however.

An S corp election does have a couple of drawbacks. The IRS tends to keep a closer eye on LLCs with this election, meaning the likelihood of an audit is higher. An S corp designation is also harder to qualify for. Speak with a tax professional about your LLC’s tax liabilities. If you want to apply for S corp status in Alaska, we may be able to help you with our S corp service.

Step 6: Submit your LLC’s beneficial ownership information report

At the beginning of 2024, the Corporate Transparency Act went into effect, bringing with it a new requirement for LLCs and small businesses: a beneficial ownership information report, or BOI report. The report requires you to disclose information about your LLC’s beneficial owners — anyone who exercises substantial control over it, gets significant economic benefit from its assets, or holds 25% or more of its ownership interest. 

When you file a BOI report with the Financial Crimes Enforcement Network (FinCEN), you’ll be asked to provide the name, address, and identifying documents for each beneficial owner of your LLC. By requiring this information, FinCEN aims to deter financial crimes like money laundering by making it more difficult to hide illicit activities behind shell companies. 

Filing is free (and limited to the federal level), and you can file online or by PDF upload on FinCEN’s website. Just be sure to file on time: the report is due within 90 days of getting Alaska’s approval for your Articles of Organization if you form during 2024. If you form in 2025 onward, that timeline drops to just 30 days. Any LLCs formed prior to 2024 have until January 1, 2025, to file. 

To learn more about the Corporate Transparency Act, check out FinCEN’s website. If you’re looking for help filing the form, our BOI report filing service has your back.

Essential Alaska LLC Forms and Fees

Here’s a quick checklist of the essential forms and expenses you’ll encounter when you start an LLC in Alaska. 

• Business Name Reservation (Optional): $25
• Articles of Organization: $250
• Biennial Report: $100 every other year
• Certificate of Compliance (Optional): $10
• Beneficial Ownership Information Report: No fee

There is a significant chance that your business will have other forms to file, but these are the most common. No matter what your business is, these are the forms you can reasonably expect.

Important Steps to Take After Forming Your LLC

After you’ve completed the five steps in our guide, consider the following additional steps. Most are more considerations, but the Alaska LLC biennial report submission is required. Read on to learn more.

Get an Alaska Business License

Before starting a business in Alaska, obtaining a business license is mandatory. This involves filling out an application with the Alaska Division of Corporations, which can be submitted either online or through traditional mail. The application fee is set at $50. To maintain your Alaska LLC business license, renewal is required annually for $50 or biennially for $100, based on the choice made during the initial application. It’s important to note that fees may vary over time, so it’s advisable to verify the latest fee schedule with the Division of Corporations. Regardless of when the license is acquired, it will expire on December 31 of each year.

Opening a Business Bank Account

Commingling your personal and business activities into one bank account can be problematic when tax season arrives. Another problem can come up if you’re taken to court and someone claims that you and the business are the same entity since you share the same bank account.

Our discounted business bank account can help you avoid these problems. You’ll get unlimited transactions, a debit card, online banking features, and more. If you plan to allow others to access this account, then check out our banking resolution template.

Looking for a way to establish a line of credit for your business? You might want to consider getting a business credit card. 

ZenBusiness Money

You may need some help handling your business’s finances. You can take charge of this responsibility with our help by using ZenBusiness Money. This service allows you to create invoices, track your LLC’s expenses, transfer payments, manage clients, and more.

Business Insurance

LLCs come with limited personal liability for their owners, but getting extra coverage may be worthwhile depending on your needs and industry. Workplace accidents and professional mishaps can happen, and when they do, you may find yourself paying heavy costs.

Discuss with the other LLC members (if any) whether additional protections are needed. Look into the many insurance companies out there that offer business coverage and see which policies have the most attractive benefits and affordability.

If you’d like more information about business insurance, visit our business insurance guide.

File your Alaska LLC biennial report

In Alaska, LLCs are required to file an Alaska biennial report with the Division of Corporations for a fee of $100 (as of this writing). According to the Division of Corporations, if your LLC was formed in an even-numbered year, then your biennial report is due January 2 of every even-numbered year after. The same goes for odd-numbered years. In other words, the biennial report is due on January 2 every two years. You can file online on the Division of Corporations “Biennial Report” webpage.

We can handle this filing for you every time it’s due with our annual report service.

Additional Considerations

The following items may also apply to your business. 

Hire Employees in Alaska

Only you can run your LLC, so we can’t tell you who to hire. However, we can offer some information that can help you find employees. First, if there are other members in the LLC, discuss who you want to join the team. Which skills, education, experience, and qualifications will this person need to help the business run smoothly and grow?

If you aren’t sure where to start, head over to the Alaska Department of Labor and Workforce Development website. In the “Employers” tab on the homepage, you’ll find plenty of resources and informative articles that can help you find the employees you need. You can even post a job there.

Get a Certificate of Compliance (Optional)

A Certificate of Compliance, also known as a Certificate of Good Standing in many states, is a form that verifies your LLC is in good standing with the state. This means that it’s been legally formed and is following the state’s rules for operation. You aren’t required to have this form to conduct business, but it can make it easier to:

• Get business insurance
• Renew your permits and licenses
• Get funding
• Expand your business to other states

If your business is out of compliance, perhaps due to being late in filing your biennial report, for example, then the state will reject your request. To get your Certificate, go to the Division of Corporations “Certificate of Compliance” webpage. Check out our article on how to get an Alaska Certificate of Compliance. If you’re ready to request one, then we can help you.

Alternatives to an Alaska LLC

Alaska LLCs are a popular choice for a lot of small business owners. But if you’re not sure if it’s right for you, don’t worry. There are plenty of other business structures to choose from. Let’s talk through them. 

• Sole proprietorship: A sole proprietorship is an unincorporated business entity owned by a single owner. It doesn’t require any startup paperwork, so it’s easy to run. But the major downside is that a sole proprietor doesn’t enjoy any personal asset protections.
• Partnership: A partnership is very similar to a sole proprietorship, but it’s owned and operated by at least two individuals. The business is easy to set up (no registration paperwork), but it usually doesn’t offer limited personal liability protection to the owners. 
• Corporation: Corporations are incorporated business entities owned by shareholders and governed by a board of directors. They are a bit complicated to run, requiring formal registration paperwork and lots of annual compliance requirements. But on the plus side, corporations can sell shares of stock to raise startup capital, and they have personal liability protections for the owners. 

Ultimately, a lot of small business owners opt for an LLC because it combines the flexibility and easy management of a partnership or sole proprietorship with the asset protections of a corporation. For a lot of entrepreneurs, that’s a win-win. 

If you’re not sure which business entity type is right for you, we highly recommend chatting with an Alaska business attorney. They’ll give you personalized guidance so you can pick the most advantageous structure for your unique goals.