How to Start an LLC in Alaska

The thought of starting an Alaska limited liability company (LLC) can seem daunting at first. But with our help, you can have your new business up and running in no time.

Keep reading to learn more about:

• The steps in the Alaska LLC formation process
• Additional helpful tasks for after you register an LLC
• The cost and the time it takes to start an LLC in Alaska

By the time you finish this article, you’ll be amazed at how easy it is to create an LLC!

Last updated: Sep 2024

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Step 1: Name your Alaska LLC

To start an Alaska LLC, you need to pick a business name. There are rules about LLC names, though, so make sure you keep them in mind. For example, certain words are prohibited, while other words need to be included.

Below are the rules for LLC names in Alaska.

Words You Have to Use

Alaska Statutes Section 10.50.020 says that all LLC names must include one of the following:

• “limited liability company”
• “L.L.C”
• “LLC”

The statute also lets you shorten “limited” to “ltd.” and “company” to “co.”

Words You Can’t Use

Section 10.50.020 also says that your LLC name can’t imply that the company is a municipality or contain any of the following words:

• “city”
• “borough”
• “village”

Your name also should not suggest that your business is a part of the government or that it is another type of legal entity, such as a corporation.

Additionally, an LLC name can’t imply that the business offers criminal or otherwise illegal services. For instance, if you don’t have the license that is required to provide a particular service, your name can’t imply that the service is available at your business.

Alaska Statutes Section 10.50.025 requires LLC names to be “distinguishable” from all other business names registered in Alaska. This requirement exists to prevent confusion between two companies with the same name.

Research the LLC Name You Want

After you choose a name for your LLC, you can search the Alaska Department of Commerce, Community, and Economic Development (DCCED)’s Corporations Database to see if it is available.

If the name you want is available, Alaska Statutes Section 10.50.035 lets you reserve it for 120 days. To do so, you must submit a Business Name Reservation and a $25 filing fee to the DCCED. 

You can do this online, or you can mail a paper form to the following address:

Alaska DBA: Using a Trade Name

Many LLC owners choose to operate their companies under “doing business as” or “DBA” names. A DBA is an alternate name that your business can “go by” instead of its official name.

DBAs are often catchier and less formal than the LLC’s legal name, and they let you drop the “LLC” from the business name the public sees.

Alaska calls DBAs “trade names.” If you want to use a DBA for your LLC, you must obtain a business license that lists the trade name as the name your business will operate under. 

You must obtain a different business license for every name you plan to use when running your business.

Step 2: Appoint a Registered Agent for your LLC

A registered agent is a person or company that receives legal documents for a business, such as an LLC.

Alaska Statutes Section 10.50.055 says all LLCs must have a registered agent in the state. Your registered agent must have an office in the state. They also must be available to accept service of process during normal business hours.

Many new business owners assume they should be the registered agent for their own LLC. Admittedly, there are some advantages to this option:

• It’s cheap: You’re not paying someone else to do it for you.
• It’s easy: The only address and contact information you have to keep current is your own.
• It’s reliable: You will receive all important documents personally.

Still, there are potential risks involved with being your own LLC’s agent for service of process. Here are some of the problems that might arise:

• No privacy: Your name and address will be published on the Secretary of State’s website. This means that anyone with an internet connection can find your personal information.
• Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
• No breaks: You also must be available at all times during regular business hours to receive documents. This means no vacations, sick days, or leaving the office for lunch.
• Business interruptions: Client meetings can be interrupted by people serving process. That could be embarrassing or hurt your reputation.
• It’s your fault if you miss something: You always have to make sure your address is correct and up to date. If you make a mistake or miss something, you are held responsible.

This is why we recommend hiring a professional registered agent service for your LLC. These businesses only charge about $100 a year, and they’ll let you know if they receive any documents on behalf of your company.

If you want to do business outside Alaska, you’ll need to register as a foreign LLC. You’ll also need to appoint a registered agent to receive service of process in each state where you do business. 

In these situations, it’s best to choose a national registered agent service. That way, one business can be your registered agent in every state where you are required to have one.

Step 3: File Your Alaska LLC Articles of Organization

Articles of Organization are a document that details the basic info about an LLC. Filing articles of organization with the Alaska DCCED officially creates your LLC.

What to include in my Alaska Articles of Organization?

Alaska Statutes Section 10.50.075 requires your articles of organization to include:

• The LLC’s name.
• The purpose for which the LLC is organized.
• The name and address of the registered agent.
• Whether the LLC will be managed by its members or a manager.

You can file your Alaska articles of organization by mail or online.

Alaska LLC Filing Fee

According to the DCCED’s Forms & Fees list, the filing fee for Alaska LLC articles of organization is $250.

Read More: How Much Does It Cost to Form an LLC in Alaska

Alaska LLC Processing Time

Online filings are processed immediately. Paper applications are processed in about 10 to 15 business days from receipt.

Step 4: Draft your Alaska LLC Operating Agreement

An operating agreement is a contract made by LLC owners to set the rules for how the business will run. It also lays out each member’s rights and duties.

Alaska law doesn’t require you to make an operating agreement for your LLC. However, Alaska Statutes Section 10.50.095 allows LLC members to create one.

Even though it’s not required, it still can be beneficial to decide how the business will run ahead of time. Creating an operating agreement can help you align member expectations and prevent future arguments.

For instance, what if one of the members eventually wants to sell their interest in business? An operating agreement could explain the process that must be followed and how their duties will be reassigned.

Making an operating agreement can also be useful because:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say what the manager has the right to do. Managers also have special duties to the company and the members. The LLC operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business entity now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

It’s vital that you involve all members of your LLC when writing the operating agreement. This will allow you to address any potential problems together and avoid disagreements later on.

Step 5: Get an EIN (Employer Identification Number) for Your Alaska LLC

An Employer Identification Number (EIN) is a 9-digit tax ID number that the IRS issues to businesses. With an EIN, an LLC can identify itself in the same way that you would identify yourself with your SSN.

Here are the most common times when you need an EIN:

• Does your LLC have more than one member?
• Does your LLC have any employees?
• Is your LLC taxed as a C corporation or S corporation?

If the answer to any of these questions is yes, your LLC must get an EIN.

The owner’s SSN suffices for tax filing purposes for a single-member LLC. Nevertheless, an EIN can still benefit your business. For instance, it can allow you to open up a bank account and protect against identity theft.

You can apply for an EIN for your LLC on the IRS website or fill out Form SS-4 and mail it in. The online route can save you time because it eliminates the need to print and mail any paperwork. After requesting your EIN online, the IRS will send your ID number within a few minutes.

It is always free to apply for an EIN, so you should never pay someone else to complete this task.

Read More: How to Get an Employer Identification Number in Alaska

First Tasks After Registering your Alaska LLC

Setting up an Alaska LLC is the first thing you should do when starting your own business. However, there are a few other important tasks you’ll need to handle as well.

Open a Business Bank Account

You are not legally required to have a business bank account when you start an LLC. However, opening a separate bank account will make bookkeeping and debt management easier. It can also protect you from personal liability for business debts.

Some key advantages of an LLC bank account include:

• Convenience: Keeping things separate makes your LLC’s bookkeeping much simpler.
• More business opportunities: Your LLC can only receive credit card payments through a business bank account. You can also do business with people who won’t take personal payments.
• Personal asset protection: Mixing your personal and business funds could cause you to be held responsible for the LLC’s debts.

The third benefit, personal asset protection, is vital.

One of the main reasons people start LLCs is that, due to a legal concept known as the “corporate veil,” LLCs and their owners are considered separate legal entities. This means that creditors can’t try to collect on business debts from your personal assets.

However, if you treat your LLC’s funds like they are your own and mix your personal assets with the LLC’s, the corporate veil can be “pierced” in a lawsuit. If this happens, you can be held personally liable for your LLC’s debts and have to pay them with your own money.

We advise using a business bank account to keep the corporate veil intact and take advantage of the LLC’s liability protection. This will allow you to deposit all company funds in one place while protecting your personal assets.

Get Business Insurance For Your Alaska LLC

It’s crucial to invest in business insurance coverage for your Alaska LLC. Think about what risks your industry faces and investigate various policy options so you can find the one that is best for your company.

Some common types of business insurance policies include:

• General liability insurance: You’ll need this if there’s an injury on your property. It pays for damages and a lawyer if you need one.
• Commercial automobile insurance: This works like your own car insurance. It covers drivers and vehicles for your business.
• Workers’ compensation insurance: Alaska law requires employers with at least one employee to obtain workers’ compensation insurance coverage. You can choose to buy a policy from a private insurance company or get approved to self-insure.
• Commercial property insurance: This protects your property in the event of damage. Keep in mind that flood insurance is often a separate policy.
• Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
• Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know exactly what kinds of losses will be covered.

Keep Your Alaska Company Compliant

After you’ve started your LLC, it’s just as important to remain in compliance with the law. For example, every LLC in Alaska needs to obtain a business license in order to do business.

Make sure to stay current on the laws that your company needs to follow, including local regulatory updates. This will help you avoid incidents where your business is in violation of the law and unable to operate.

Alaska Business Permits and Licenses

Alaska Statutes Section 43.70.020 says that all businesses must obtain a license to do business in the state. You can apply online or mail a Business License Application to the following address:

The business license fee is $50. For more information, see the business licensing section of the DCCED’s website.

Alaska Tax Requirements

Alaska does not have income or sales taxes. However, depending on your industry, your business may be subject to a different type of tax. 

Check out the Alaska Department of Revenue’s website to learn more.

Federal LLC Tax Filing Requirements

When it comes to Federal taxes, LLCs are considered “pass-through” business entities. This means that the profits and losses from the business must be reported on Schedule C of its owners’ tax returns. The LLC itself will not be taxed.

Additionally, you must pay Social Security and Medicare taxes, even if you have no workers. If you do plan to hire employees, you will be required to withhold payroll taxes from their checks.

Biennial Report and other Filing Requirements

Alaska Statutes Section 10.50.750 requires LLCs to file a biennial report with the DCCED every other year. You can file online or print a paper form using the DCCED’s Biennial Report Application / Database.

There is a $100 filing fee.

Alaska Business Formation Quick Links

• Internal Revenue Service — apply for an EIN online
• IRS information regarding the federal tax treatment of LLCs
• Forms & Fees (DCCED)
• Corporations Database (DCCED)
• Corporations Section (DCCED)
• Business Licensing Section (DCCED)
• Biennial Report Online Filing (DCCED)
• How to Get Licensed (DCCED)
• Alaska Small Business Development Center

Statutes:

• Name Requirements: Alaska Statutes Section 10.50.020
• Additional Name Requirements: Alaska Statutes Section 10.50.025
• Name Reservation: Alaska Statutes Section 10.50.035 
• Registered Agent: Alaska Statutes Section 10.50.055
• Articles of Organization: Alaska Statutes Section 10.50.075
• Operating Agreement: Alaska Statutes Section 10.50.095
• Business License: Alaska Statutes Section 43.70.020
• Biennial Report: Alaska Statutes Section 10.50.750