Form An LLC
Step 1) Verify & Secure Your LLC Name
First off, in order to launch a successful Alaska LLC, you need to give it the right name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.
Legally, your business name must:
- Contain the words limited liability company or limited company, or the abbreviation LLC or L.L.C.
- Not contain restricted words or phrases (these often include words like bank, attorney, and university) without the proper approval.
- Not contain words that mislead regarding the purpose of your business.
- Be distinguishable from any other entity or trade name registered in Alaska.
For an exhaustive list of naming rules you can visit Alaska’s Department of Commerce, Community, and Economic Development website.
If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider filing a DBA (doing business as) name after you’ve nailed down your branding.
What To Do:
Once you’ve decided what you’d like to call your LLC in Alaska, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Articles of Organization.
Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.
Step 2) Appoint An Alaska Registered Agent
When you file your Articles of Organization, you will be asked to appoint a Alaska registered agent.
Your registered agent will be responsible for receiving important legal documents like tax forms and service of process notices on behalf of your LLC. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Alaska.
Alaska does give you the option to act as your own registered agent, but many business owners choose to appoint a professional instead. Here are a few things to think about before you decide to act as your own:
- You’ll have to maintain normal (9 am - 5 pm) business hours at the address you provide.
- If you run your business from home, you’ll be required to make your personal address public.
- You must keep up on important notices, dates, and deadlines.
- You could be served in front of your family or coworkers.
What To Do:
If you’re considering acting as your own registered agent, do some research, starting with our registered agent guide. If you decide you’re up for the task, go ahead and list your own name and address on your Articles of Organization.
If you’re leaning toward hiring a professional, we recommend doing so through an online LLC formation service. Many of these companies (like IncFile) offer up to one year of registered agent service free when you form your LLC with them.
Step 3) File Articles Of Organization
A very exciting step indeed -- once you’re through filing your Articles of Organization by mail or online, you’ll be a legitimate business in Alaska! But let’s not get ahead of ourselves, here are the details of what this document requires:
- The full name of your business
- Your business’ purpose and NAICS code (find yours here)
- Your registered agent’s full name, physical address and mailing address (must be in Alaska)
- A description of your company’s management
- Name and signature of organizer(s)
- A $250.00 filing fee
If you choose to do this in hard copy, you’ll mail the completed document and $250.00 check to the following address:
State of Alaska, Corporations Section
PO Box 110806
Juneau, AK 99811-0806
What To Do:
Sure, you can handle this step on your own, but we still recommend considering the help of an LLC formation service. Why? Not only will they take the reins and make sure your Articles of Organization are filed perfectly, they’ll also provide other necessary products and services at super competitive prices.
Take a look at our top 7 business filing services to find out about various providers’ pricing and features.
Quick Note: Once you’re through with your Articles of Organization, keep it on your agenda to file a biennial report within 6 months of your business’ formation. While your online filing provider may notify you, it’s up to you to take care of filing the report on your own (but don’t worry, it’s free).
Step 4) Draft An Operating Agreement
Creating an LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.
Your operating agreement should outline the following:
- each member’s responsibilities
- how new members will be admitted
- how existing members may transfer or terminate their membership
- how profits and dividends are to be distributed
From there, you can add as many provisions as you want, provided they are not in conflict with Alaska business law. To access a free operating agreement and learn more about how this document works in Alaska, click here.
Step 5) Get An EIN
The Employer Identification Number (EIN), or Federal Tax Identification Number, is essentially a social security number for your company. State and federal agencies use this number to track your business activity.
Your EIN will come in handy when it’s time to:
- Open a business bank account
- File Federal and State taxes
- Hire employees
We think the best way to get an EIN is by using the free online application on the IRS website. We prefer this method because it’s the most efficient, but if you’d prefer to apply via phone, fax or mail, read through our guide to find out how.
Maintain Your LLC's Personal Asset Protection
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.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
Reduce the Liability of Your LLC
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 Alaska, businesses with one or more employees, excluding LLC members and company officers, are required by law to have workers' compensation insurance. Get a free quote with ADP.
Acquiring a general business license and any special permits required of your LLC are the final bits of red tape you need to cut through -- after this, you can turn your full attention to building and marketing your brand!
When it comes to permits and licenses, remember to consider federal, state and local requirements:
- Federal: For a list of the business activities that require special licenses, head over to the Small Business Association. They also have a short article on business taxes, although the IRS website is the best resource for detailed federal tax requirements.
- State: You can find out about various Alaska business taxes and apply for a general business license through the Department of Commerce website. For other special requirements, run your eye over their business licensing page.
- Local: Depending on the borough or city in which you’re running your business, you may be required to adhere to other special requirements. To be totally sure you’re not missing anything, contact your local Chamber of Commerce.
What To Do:
If all you need is a general business license, go ahead and apply on your own.
However, if your business activity/location requires you to get quite a few permits and licenses, you may want to consider using a business license research service. These companies will do all the research on federal, state, and local business requirements on your behalf, and send the necessary applications right to your doorstep (or inbox).
Reduce Administrative Burden
There will be many demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go. The two most important business tasks to get help with are:
Getting your books in order right up front will save you headaches in the future. At the very least, you can have a professional setup your bookkeeping and accounting for you. This will save you money and time in the long run.
There are all in one services that will do your bookkeeping / invoicing/tax filing for you all for one monthly fee. Mazuma ($95/month) is a reliable all in one tax service.
2) Employee Payroll
If you have employees, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.
Gusto is a a reliable and good payroll service for small businesses.
Need Help Forming an LLC?
If you’ve got too much on your agenda to worry about all the paperwork and state-requirements, there are a handful of LLC formation services that can take care of everything for you.
Here are the two most popular:
– IncFile ($49 + state fee) = Best Price & Overall Value
– LegalZoom ($79 + state fee) = Best For Brand Recognition
Note that this guide for forming a Alaska LLC isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an LLC in Alaska, consult with a business attorney.