Are you thinking about starting an LLC in Alaska? In this article, we’ll discuss the top advantages of an LLC and how it will benefit your business in the short and long term. After that, I will walk you through the entire registration process if you decide it is the right business structure for you.
However as a quick note, if you are nervous about the filing process and would rather professionals handle it to make sure everything is filed properly, look into a service like IncFile (for $49) or LegalZoom (for $149). Both services use online questionnaires that take you less than 15 minutes to fill out and they take care of the rest.
If you’d like to handle the incorporation process yourself, keep reading for our step-by-step guide. Otherwise look into one of the incorporation services mentioned above. Do what you feel most comfortable with.
There are 5 reasons why forming an LLC in Alaska is highly beneficial, here’s a list and a thorough explanation of each one based on state and federal standards.
From the term of the legal structure in itself, an LLC is very conducive because it will provide limited liability protection to business owners.
This simply means that in the event that your business incurs debts or it is faced with a lawsuit, you, as a business owner will not be held liability because your business is considered a separate entity. It is important to understand that as long as you’ve treated your LLC as a separate entity, creditors and other financial institutions will not be able to target your personal assets as payment for your business debts.
You can therefore spend more time on more important things like starting your business. If you incorporate in a different business structure such as the examples I stated above, you’d have to prepare more documents to continue your operations.
If you operate your Alaska small business under Limited Liability Company, you are not required to pay taxes as a small business.
Taxes that are categorized as business income or loss are passed through the business owner, thus, tax dues are reported and carried on through the business owner’s personal tax returns. Knowing this, you need to be ready, hire an accountant or use an accounting software to keep yourself updated.
In terms of management, an LLC is better than incorporating through a Corporation. The organizational structure of a Corporation is non-flexible, it has a well-defined hierarchy; for instance, it needs a board of directors which LLC’s don’t really need.
As an owner of an Alaska LLC, you can organize and create your management in any way that you like. You have the option to appoint managers, create a board of directors or you can simply manage the business on your own. It’s really up to you!
I’m sure you hate doing paperworks and keeping piles and piles of records! Operating under LLC is the right fit for you because it needs very little paperwork. An LLC is easier to form and maintain as well. Aside from all this, an LLC will also help you save time because you don’t have to go to board meetings or shareholder meetings.
Now that you know the reasons why forming an Alaska LLC is beneficial, it’s time that you learn how to do it. Here are 5 easy-to-follow steps that you can use in forming an LLC in Alaska!
IncFile is $100 more affordable than other filing services & twice as fast
Here are the steps on how to form an Alaska LLC based on state and federal guidelines:
The first step to start an Alaska LLC is to come up with a business name. Apart from your business name, it should also have the abbreviation, ‘LLC’ or ‘L.L.C.’ right behind it.
You can create any business name for your Alaska LLC, there are no rules that need to be followed. Make sure that when you name your business, it is unique and there are no duplicates so you can freely use it. For business name verifications, you can check the Alaska Department of Commerce, Community, and Economic Development.
The second step in forming your Alaska LLC is to find a reliable Registered Agent for your small business. Registered Agents play a great role in your business.
When choosing one, check his/her credentials if they meet the state requirements. Aside from this, the Registered Agent also has to be a resident of Alaska and he/she must have a street office address in the state. Most of all, your Registered Agent must be available at all times so that you won’t miss any important documents.
That said, you can hire a Registered Agent service and pay up to $160/year, or get an Alaska Registered Agent free of charge when you incorporate your LLC with IncFile – which is $100 less than other online incorporation services.
The third and most important step is filing your articles of organization. To be able to form your Alaska LLC, you need to file this document before the State of Alaska Corporations.
With the use of the Articles of Organization form, read the instructions thoroughly before answering it. If you feel like you need help in filling the form out, you can seek assistance from your lawyer. After filling out the form, let your attorney notarize the document. You have two options for this process: online filing and through mail.
Filing fee: $250
An Employer Identification Number is essential because it is the IRS’ way of monitoring your tax reports. It is also a requirement for your business to continue its operations.
The EIN can easily be obtained through online application on the IRS website and – it’s completely free of charge!
To be clear with everything, an Operating Agreement is not officially required to form an Alaska LLC, however, for the good of your business, this legal document is very important so it’s best that you draft one.
An Operating Agreement will be able to protect your Alaska LLC legally. You can make this document with the use of Rocket Lawyer’s Operating Agreement. No need to pay anything!
After giving you the 5 steps on how to start an LLC in Alaska, I hope that you’ll be able to form your LLC with ease. To give you further information, you have to continue reading the succeeding sections of this article.
Congratulations! You have now completed the requirements for your Alaska LLC. But before you rejoice, we’re not done yet because we’ve prepared additional steps/requirements for you to follow – some are recommended and some are required.
It’s your decision whether to follow these additional suggestions. You can continue without them but if you decide to complete them, it would really benefit your LLC.
As an entrepreneur, you always have the highest hopes when you build a business. If you really want to lead your business to success, you need to start on the right foot. How? By preparing a solid business plan which will serve as your guide all throughout the entire process of starting your Alaska LLC.
Business plans are important than what they’re given credit for. By making this, you’ll be able to lay out risks and solutions, you may even use this to convince investors.
Compliance to Alaska LLC Taxes and licenses is mandatory when forming an LLC in Alaska. By complying with these requirements, you will be able to continue business operations and transactions in the state.
Aside from the Annual Report, there are two other reports that you need to file first: the Initial Report and a Biennial Report.
After the first six months of your Alaska LLC, you have to file your Initial Report. You can file this free of charge at the State of Alaska Division of Corporations. Every 2 years, the Biennial Report has to be filed.
To file the Biennial Report, you can do it through mail or online. You can download the form for the report here.
Please keep in mind that this guide is not meant for legal purposes and is not legal advice. If you want specific answers for forming an LLC in Alaska, consult with a professional.