How to Incorporate in Alaska (May 2024 Update)
If you're looking to legally establish your business in Alaska, incorporation is the way to go. Forming a corporation or LLC creates a separate legal entity for your company, protecting your personal assets if your business is sued. But with all the legal paperwork and jargon involved, the incorporation process can feel overwhelming for entrepreneurs.
This comprehensive guide breaks down all the steps and requirements to incorporate your small business in Alaska. We'll explain everything from choosing your corporation's name to filing your biennial reports to stay compliant. You'll also learn the key differences between LLCs and corporations in Alaska, so you can pick the best structure for your company. Let's get started!
Picking a Business Name and Checking Availability
The first step to setting up your business in Alaska is choosing a name. Your corporation's name needs to be distinguishable from other registered companies in the state. It also must include a business designation like:
- Corporation
- Incorporated
- Company
- Limited
- An abbreviation like Corp. or Inc.
You can check name availability through the Alaska Division of Corporations database. If the name is taken, get creative with another option. Don't worry if you need to reserve a name before finalizing your pick—you can pay $25 to hold a name for up to 120 days in Alaska.
Appointing a Registered Agent in Alaska
Alaska law requires all corporations to designate a registered agent—a person or company that receives important legal documents on your business's behalf. Lawsuits, tax notices, official correspondence—it all goes to your registered agent.
You have a few options when choosing someone for this important role:
- Yourself
- Another company owner or employee
- A professional registered agent service
Using a registered agent service can save you time and headaches down the road. They'll intercept all legal mail and keep your home address private.
Filing Your Articles of Incorporation
To legally form your Alaska corporation, you'll need to file Articles of Incorporation with the state's Division of Corporations. This crucial document establishes your company as a legal entity.
It must include certain details like your corporation's name and purpose, number and type of stock shares, registered agent's info, and the incorporator's name. You'll also need to list any alien affiliates—basically, foreign businesses or individuals affiliated with your company.
The filing fee for Articles of Incorporation is $250 in Alaska, whether you submit them online or through the mail.
Obtaining Your Business License
Before you open for business, you must obtain an Alaska Business License. This requires registering through the Alaska Division of Corporations and paying an annual $50 fee.
Staying Compliant with Reports
After going through the initial incorporation process, your work isn't done! Alaska requires both initial and biennial reports to keep your corporation compliant.
You should file your initial report within 6 months of incorporating in Alaska. This gives the state an update on your directors and business address. Then, you must submit biennial reports every 2 years by January 2nd. They cost $100 per filing.
Keeping up with these crucial reports keeps your corporation in good standing. If you ever fall behind, you could face penalties and dissolution.
LLCs vs. Corporations in Alaska: Key Differences
If you're still weighing Alaska corporations vs. LLCs, let's compare some key differences between these structures:
Maintenance
Corps hold regular meetings, record meeting minutes, and require more paperwork.- LLCs have fewer compliance requirements and are easier to manage.
Taxes
Corps face double taxation as separate entities.- LLCs get pass-through taxation with profits on the members' tax returns.
Investors & Funding
Traditional investors feel safer investing in corps. LLCs typically attract fewer investors and have more complicated financing.
Alaska does provide excellent advantages if you form an LLC in the state. Your personal assets receive enhanced protection, and you only need to file reports biennially. But if attracting investors is critical for your ambitions of building a large company, a corporation may still be your best option in Alaska.
Picking the Right Structure for Your Business Goals
With this breakdown between LLCs and corps, which option should you choose for your Alaska business? Here are some key factors to consider:
Desired Liability Protection
If safeguarding your personal assets is your top priority, an Alaska LLC offers maximum security. Corporation shareholders can also be protected but may take on more legal risk.
Business Size Ambitions
Do you hope to eventually go public, seek lots of investors, or scale nationally? Traditional investors still view corporations as more legitimate and stable for large operations.
Paperwork Commitments
LLCs require significantly fewer administrative tasks around recording meetings, votes, etc. If you want simpler maintenance, LLCs involve less red tape.
In the end, identify your most critical business needs. An Alaska incorporation specialist can also provide a helpful outside perspective when making this big decision.
In Conclusion: Incorporate in Alaska with Confidence
Following this detailed guide will ensure you check all the boxes for properly forming your business in Alaska. While incorporating seems complicated on the surface, breaking down the steps makes the process very manageable.
Stay up-to-date on filings. Seek help when you need it. And most importantly, keep your "why" for launching your Alaska business at the forefront. The energy and vision that goes into caring for your company will transform all that legal paperwork into a thriving enterprise.