Throughout the years, Alaska has become home to many startups. With its tax-friendly business environment, the state has become one of the fastest when it comes to the growth of startup companies in the country.
Understanding What An LLC Is
The first thing you need to do is to decide what kind of business to form. It may be best to choose something that suits your goals, abilities, and interests. This way, you will have the motivation to keep moving forward.
The next thing to think about is the type of business. There are various legal structures. Each one of them offers benefits and advantages. For most starting entrepreneurs, there is one structure that stands out. It is known as Limited Liability Company (LLC).
An Alaska LLC is a hybrid entity. It combines the protection that a corporation has and the features of a partnership or sole proprietorship. In short, your company can have the protections of large corporations without needing to follow the same regulations, rules, and compliance issues that bigger business entities have.
Among the many benefits that LLCs offer are the following:
- It separates and limits the personal liability of the owner from the obligations and debts of the business entity.
- It offers quick and simple filing, compliance, administration, and management.
- It allows your company to have potential advantages when it comes to tax treatment.
What To Do
Starting an LLC in Alaska requires you to file formal paperwork. You also have to follow the process that the state has set. For newbies, the whole ordeal can be overwhelming. To help you get started, here is a step-by-step guide on how to form an Alaska LLC:
- Name your company. Once you make up your mind about forming an LLC, the next thing you need to do is to come up with a name for your business entity. The company name is a crucial factor in business. It has to be unique and distinguishable. To make sure that the name that you want to use is still available, you have to check through the Corporations Database feature on the website of the Department of Commerce, Community, and Economic Development. Aside from this, you also need to follow the naming regulations in the state. Alaska law states that LLCs have to use the phrase Limited Liability Company or any of its abbreviations, such as LLC, L.L.C., Ltd. Liability Company, Limited Liability Co., or Ltd. Liability Co.
You can also choose to reserve the name for 120 days to prevent other business entities from using it while you are preparing the documents that you need to file. To do this, you have to submit a Business Name Reservation Application online or by mail to the Division of Corporations, Business, and Professional Licensing.
If you do not want to use the legal name of your LLC in the Articles of Organization, you can do so by using a trade name. Also known as a doing business as (DBA) or fictitious business name, the trade name will be what you will be using while conducting operations in Alaska. However, you cannot simply use whatever name you want. You will have to register the trade name with the Department of Commerce using the New Business Name Registration form.
- Choose a Registered Agent. Under Alaska law, all LLCs operating in the state need to appoint an agent. It can either be a company or an individual that will accept all legal papers on behalf of the LLC. If your LLC chooses an individual, he or she needs to be a resident of Alaska. If it is a company, it needs to be authorized to transact business in the state. Among the requirements is a physical street address in Alaska.
- Submit a completed Articles of Organization form. As stated earlier, forming an LLC in Alaska comes with formal paperwork. You will have to complete the Articles of Organization form. You can file it online or send it by mail. It also comes with a filing fee.
To complete the form, you will need to prepare the following information:
a) Name of the LLC
b) Purpose of the company
c) Registered Agent’s name and address
d) The management type, member-managed or manager-managed
e) Signature of the organizer
- Create an Operating Agreement. Alaska does not require LLCs to have an operating agreement. However, having one is a good idea. The document is for internal use. But, it will clarify the rights and responsibilities of every manager and member. In case you do not want to have an operating agreement, your company will have to follow state law.
- Obtain An EIN. The Employer Identification Number (EIN) is like the Social Security Number of a company. It will help the Internal Revenue Service (IRS) identify a business for filing and tax purposes. Additionally, the EIN will also help you open a bank account under the name of your LLC and apply for various permits and licenses. If you have employees, the EIN will also help you handle payroll. Getting an EIN is free. You can obtain it directly from the IRS.
- File the necessary reports. The responsibilities of your company will not end once you finish the registration process. You will have to file an initial report with the Division of Corporations within six months of the organization. The filing is free. Additionally, all LLCs registered in the state have to file a Biennial Report form. This form is due before January 2 every two years. You can file all forms online or by mail. They also come with a filing fee. You will also need to comply with other tax and regulatory requirements, including the IRS Employer Identification Number (EIN) and other related business licenses.
Properly completing each and every step will help you form an Alaska LLC without any issues. It will also ensure legal operations to prevent possible problems in the future. However, you may have to take care of multiple responsibilities to form your business. To help you go through the process, you can get the services of a reliable company like DoMyLLC. Contact us now to find out how our team of experts can help.