How To Start An Llc In Alaska

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If you’re wondering how to start an LLC in Alaska, then you need to read on. This article will detail everything that you need to know. There is a lot of research, forms, and steps to completing the process.

Why Start an LLC in Alaska?

How to start an LLC in Alaska

There are numerous reasons why you might want to start an LLC in Alaska. Women who are looking to start a business in Alaska can benefit from a one-time grant of $4,000 to help them with startup costs.

In addition, Alaska is ranked as the third most tax-friendly state in the United States. And it is one of the only states in the country that has no individual state income tax. Therefore, this is a great option for those businesses like LLCs and sole proprietorships where profits are only taxed at the individual level.

There is also no sales tax at the state level, though there is a municipal government that does charge a sales tax, so always speak to a local tax expert before making financial plans.

For comparison, here are some of the key statistics for you to see how Alaska compares to other states regarding LLC filing fees, sales tax, and other details.

State LLC Filing Fee LLC Annual/Biennial Fee Corporate Tax Rate Nominal GDP per capita
Alaska $250 $100 (every 2 years) 0-9.4% $75,027
Washington $200 $60 (every year) 0% $86,265
Idaho $100 $0 (however, an information report must be filed every year) 6.50% $49,616
Oregon $100 $100 (every year) 6.6-7.6% $62,867
US Average $130.38 $89.34 (every year) 5.60% $64,773.08

Another advantage of starting an LLC in Alaska, the state has relatively straightforward rules and processes for creating your business. The procedure is based on the standard process for filing Articles of Organization; this application is made to the Alaska Division of Corporations, Business and Professional Licensing.

how to start an LLC in Alaska

How Much Does it Cost to Start an LLC in Alaska?

One of the big disadvantages of starting an LLC in Alaska is that it will cost you more to register your business. While it should cost you no more than $250, it is the only fee that you will have to pay. Therefore, in the long term, the process can work out cheaper than in other states.

The only other additional cost that you might find is that you have to reserve your LLC name with the Alaska Division of Corporations, Business, and Professional Licensing. This costs around $25.

How to Start an LLC in Alaska

Here are the steps that you will need to follow when you want to learn how to start an LLC in Alaska. These aren’t particularly challenging steps to follow and can be done without help. However, you might want to get some help from the professionals at ZenBusiness and Incfiles.

Step 1 – Create your Alaska Business Name

The first thing that you need to do is to ensure that you have a name for your new LLC. There are lots of different ways that you can create an Alaska business name. You might have an idea already, however, you must make sure that your business name meets two guidelines:

The name needs to be unique and distinguishable from other brands. You can do a business name search to ensure that your name is unique. The name should include the phrase Limited Liability Company in one of the numerous acceptable variations.

How to start an LLC in Alaska

There are also some additional guidelines, like words that cannot be used within the name. For example, you cannot use words like university, attorney, government agency names, bank, village, and more. These can be checked online through the website or you can check with a registered agent.

One way that you can choose a name for your Alaska business, you can use the Alaska business name generator. This is a free tool that allows you to add a keyword and then generate a list of potential business names for you. You can try it out here.

Get a Name Idea

Step 2 – Register your Alaska Business Name

Now you need to register your LLC name. This is a reservation process that costs $25 and you can reserve the name for 120 days. You can register the name online or you can send a paper copy. The paper copy process will take longer.

You’re also able to use a trading name, assumed name, or fictitious business name instead of the official LLC name. However, to do this, you would need to undergo the reserving of the name all the same.

You might want to check that not only is the name available on the LLC directory but also that the domain is available for you to use. Some businesses are not registered, as there is no legal reason, but there are benefits to registering a business, namely that your assets are protected.

Step 3 – Find a Registered Agent

Now you need to find an agent for your LLC in Alaska. Officially, you can appoint an individual or a business to act as your registered agent for your business. You can even use it yourself if you would like. The individual must be based and live in the state.

The agent acts as your official representative. They will receive official documents, tax forms, lawsuit notices, and other papers.

There is a list of registered agents that you can use which can be obtained through the Alaska Department of Commerce Community and Economic Development.

Step 4 – Articles of Organization

How to start an LLC in Alaska

The next step that you need to complete is to submit your Articles of Organization. The documents are an online version, which is titled Form 08-484 – Articles of Organization. These need to be completed and submitted. They can be done online, which is the preferred method in the state, or you can download and submit them by mail. The articles of organization will contain the following information:

  • The name
  • The name/address of your registered agent
  • State of Purpose
  • Management structure
  • Duration of LLC
  • Signatures.

The cost for this is $250 unless you’re not based in the state but still want to do work in the state. If you are a foreign business, then the overall cost is $350.

Step 5 – Submit Other Documents

There are other documents that you will need to submit with the documents above. These include the following.

  • NAICS Code

You will need to choose and identify a unique NAICS code for statistical purposes. This code is used by the government for monitoring and using data to determine the health of the US economy. It can also be used for tax reports.

How to start an LLC in Alaska

Business License

You will also need to have your business license. This document can be obtained from the Alaska Division of Corporations, Business and Professional Licensing, Occupational Licensing Section. This document expires annually and you will need to reapply for it.

Step 6 - State Certificate and Business License

Before you’re able to start earning revenue with your LLC, you will need to wait until the articles of organization have been processed. When this is complete, you will get your official Certificate of Organization.

Step 7 – Initial Report and Biennial Report

After six months of establishing your LLC, you are required by state law to file your free initial report at the State of Alaska Division of Corporations. Then you will be required to submit a Biennial Report every other year.

Step 8 – EIN

The final step which is required for forming an LLC is the EIN or Employer Identification Number. This is a nine-digit number that can be used by the IRS for numerous purposes.

  • Filing and managing federal taxes and state taxes
  • Hiring new employees
  • Opening your business bank accounts.

You’re able to get this number online or through a paper copy.

LLC Taxes in Alaska

One of the advantages of doing business in Alaska is that there is no personal income tax. Therefore, LLCs are not required to pay taxes themselves. Only the constituting members are required to pay taxes.

However, some business owners decide to treat the LLC as a corporation. Therefore, they can pay taxes by filing IRS Form 2553. The LLC would then be expected to pay up to 9.4% in taxes.

There are also employer taxes that need to be paid should you hire employees. You might want to speak to an accountant to see how you can save money on your taxes and what the best options are for you.

Final Word: How to Start an LLC in Alaska

If you’re looking into how to start an LLC in Alaska, above are the steps and advice that you need to create your business well. However, you might want to have some help, which is why we recommend that you seek help from ZenBusiness or Incfiles who can help you register your business in Alaska.

Once registered in the state, you can be sure that you’ll be able to benefit from the better taxes in the state.