Starting a corporation in Alaska has various advantages. Business owners in Alaska enjoy various tax incentives such as low business taxes and no state income or sales tax.
Additionally, new business owners will enjoy the protection of personal assets and enhanced credibility. The following step-by-step guide will show you how to start a corporation in Alaska.
1. Select a name for your corporation
Selecting a name for your Alaska Corporation is the first step in getting your business off the ground. However, you need to meet a few Alaska corporation naming requirements.
General corporate name guidelines
The following naming guidelines must be adhered to when choosing a business name for your Alaska Corporation:
- You cannot choose an entity name that’s misleading to the public. For example, if you are starting a for-profit corporation, the words “not-for-profit” should not be included in the name
- When deciding on a business corporation name, do not include words that indicate a professional licensing restriction, such as “engineer.” The only exception to this rule is if your corporation has the appropriate professional license
- Do not include words in your business name that may confuse your business with government agencies such as the FBI, State Department, Treasury, etc.
- You may include the name of a village, borough, or city in your Alaska corporations name; however, the name cannot contain the words borough, city, or village or imply that the company is a municipality in any way
- Do not include words or phrases that indicate or imply that your business is organized for any other purpose other than what stated in your company’s Articles of Incorporation
- The Alaska corporation name must be easily distinguishable from existing business entities in the state
- The corporation name must include the word corporation, company, limited, or incorporated or at least an abbreviation of one of these terms
For additional information on the list of naming guidelines in the state, visit the Alaska Department of Commerce’s business name page.
Additionally, ensure that the name is indeed available to be used by referring to the Alaska Department of Commerce’s Business Search Portal. The step is also essential if you’d like to find if the business name is available as a domain name.
Once you’ve confirmed that the business name is indeed available, you may choose to apply for a trademark for your business. Registering your business name as a trademark helps protect the name as well as the brand from intellectual property theft.
Additionally, your customers will never be confused about who they are doing business with. You may register your business name as a trademark on the US Patent and Trademark Office’s website, also known as USPTO.
Your business’s entity name is the legal name under which the state identifies with your business. The legal name or the entity name must be stated or included in all your corporation’s formation documents.
DBA (Doing-business-as) name
Applying for a DBA or (doing business as) name is one of the easiest ways to conduct business under a different name from your company’s entity name. It’s also a great way to do business without changing your corporation’s legal name.
The process is easy to follow, and there’s no need to file an amendment. In order to register a DBA in the state of Alaska, you need to file online with the Department of Commerce website or complete the New Business Name Registration Form.
2. Nominate a registered agent
As per state law, you’re required to choose an Alaska registered agent for your corporation. A registered agent is an official that’s in charge of receiving legal paperwork and official correspondence from the state on the corporation’s behalf.
In the event your corporation is served with a lawsuit, the registered agent is the one who will receive the service of process.
An owner or employee of the corporation can be a registered agent provided there over the age of 18 and have a street address in Alaska. Additionally, they need to maintain normal business hours and consent to the appointment.
3. Appoint initial directors at the organizational meeting
The next step in the process of incorporating the state of Alaska is holding an organizational meeting where you will fulfill the following tasks:
- Determining your corporation’s share structure
- Selecting initial directors
- Creating and approving bylaws
- Executing Articles of Incorporation
One of these essential steps in the process of holding an organizational meeting is to appoint initial directors. The initial directors will serve until the first shareholder meeting. While this is not a requirement for your Alaska Articles of Incorporation, you may choose to include the initial director of the corporation in the “optional provisions and additional articles section” of the Form.
The corporate director is in charge of adopting, amending, and repealing operational or corporate bylaws and electing, supervising, and removing officers.
4. File Articles of Incorporation
Filing the Articles of Incorporation is the next step in setting up your business in Alaska. The Articles of Incorporation will officially document and create your Alaska corporation. Therefore, the document needs to include some corporation details such as:
- The number of authorized shares the business is allowed to issue and share classes
- The street address and name of the corporation’s registered agent
- The name and business purpose of your corporation
In the event that there are issues in the filing process, there is a contact information sheet included with the Articles of Incorporation Form, allowing you to include basic contact information.
The Articles of Incorporation may be filed online with the Department of Commerce, or alternatively, you can download the Articles of Incorporation Form and mail it to the following address:
State of Alaska
Division of Corporations, Business and Professional Licensing
P.O. Box 110806
Juneau, AK 99811-0806
You’ll receive a Certificate of Incorporation from the Alaska state’s office once your corporation is formed.
5. Create and approve bylaws
Corporate bylaws are basically A detailed set of rules that are agreed upon and adopted by the board of directors once a corporation is formed. They specify the basic operating and governing rules and ensure that all members of the corporation are on the same page about the priorities of the business.
The corporate bylaws are not submitted to the state, and it’s not a requirement for any corporation in Alaska to create bylaws. However, it is strongly recommended. This is because they are a part of your business’s corporate records and helps maintain consistency in how it oversees the company’s operations. It also allows founders and directors to communicate organizational rules helping to avoid disputes and conflicts down the line.
Therefore, the bylaws should cover certain aspects of running the company, such as how directors will be elected, how meetings are going to be organized, the officer roster, and a summary of duties.
In addition to managing the company, bylaws specify details about annual meetings, ownership rights as well as how officers and directors will be elected and removed. Therefore, they need to be consistent with the company’s Articles of Incorporation.
6. Select a share structure
Shares of stock are a representation of ownership in the corporation. So shareholders are buying a small piece of your business when they purchase stock. It’s quite common for corporations to issue paper stock certificates to shareholders or stock owners, although it’s not a legal requirement.
In private companies, meaning companies that are not publicly traded on the stock market, the owner of the company can set the value of each stock according to the owner’s discretion as long as it fits in with the corporate bylaws.
For example, one share of stock could be worth $10 or $10,000. It is completely acceptable, either way.
7. Obtain an EIN
An EIN is an Employer Identification Number, also referred to as a Federal Tax ID. Basically, it’s a nine-digit number that is unique to your business. This nine-digit number is issued by the Internal Revenue Service to business entities across the country and is used as a way to identify businesses in each state.
One of the main purposes of EINs is to fulfill tax purposes. Ultimately, it’s more or less of a Social Security number for your business.
It’s important that you wait until the corporation is approved prior to applying for an EIN. This is because it’s one of the last things that should be done before setting up your business. However, once you’ve obtained the EIN, it will allow you to fulfill many tasks, including:
- Applying for applicable business licenses as and when required
- Obtaining lines of credit and credit cards in addition to building the business’s credit score
- Completing payroll for employees where applicable
- Filing corporate taxes and tax returns for your business
- Opening a business bank account or investment accounts
When applying for the EIN, simply go to the IRS website and use the online EIN Assistant to complete the process. You’ll need to have a few pieces of information on hand, such as the legal name of your business as well as your business’s mailing address. Additionally, you may choose to download IRS Form SS-4 and forward it to the following mailing address:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
8. File Alaska state taxes
Like many other states, Alaska has a corporate income tax. However, unlike other states in the US, there is no privilege tax or franchise tax imposed by the state of Alaska; additionally, corporations in Alaska do not pay personal income tax.
However, Alaska does have some other business-related taxes, such as an accumulated earnings tax, a personal holding company tax, and an alternative tax on capital gains. However, if your corporation is a small business, then you don’t need to worry about this.
9. Alaska business licenses and permits
All corporations in Alaska must apply for a general business license. It’s often referred to as a business tax certificate. Municipalities and cities issue business licenses; therefore, the requirements differ based on the city.
Additionally, suppose you’re going to be running a business or conducting business in more than one city. In that case, you need to apply for a business license in each of the cities you plan on doing business.
Additionally, you may also require a professional license if you run a professional corporation by offering certain services such as salons, childcare, and barbershops.
10. Annual report requirements in Alaska
All corporations registered in the state must submit an Alaska biennial report. The report must be submitted to the Alaska Division of Corporations, Business, and Professional Licensing.
Some of the information that needs to be included in the annual report includes the corporation’s address, the address of the registered agent, and any changes to the information initially submitted with the company’s Articles of Incorporation.
The biennial report is due in January of every even-numbered year. The annual report may be submitted online.
11. Costs of starting a corporation in Alaska
The filing fees below apply to all Alaska corporations:
- DBA name: $25
- Articles of Incorporation: $250
- Biennial report: $100
- Arizona Certificate of Good Standing: $10
Next steps after forming a corporation
A few helpful tips go a long way in maintaining your corporation:
Open a business bank account
To obtain liability protection, it’s recommended that you open up a business bank account for your Alaska corporation. The bank account separates the corporation’s funds from the members’ personal income.
To open up a business bank account in the state of Alaska, you will need the following:
- Copies of the original Articles of Incorporation
- Employer Identification Number
- Business license
- Depending on how old your corporation is, you may need an Alaska Certificate of Good Standing to prove the business entity is active and in good standing with the state
Get business insurance
In order to manage risks and help you focus more on your growing Alaska corporation, you should get business insurance. Some of the most common types of business insurance include professional liability insurance, general liability insurance, and workers’ compensation:
- Professional liability insurance: This type of insurance covers claims of malpractice and a few other business errors for professional service providers such as accountants and consultants
- General liability insurance: This type of insurance protects your business from lawsuits. In most cases, small businesses choose general liability insurance.
- Workers’ compensation insurance: This type of insurance provides coverage for employees’ job-related injuries, illnesses, or death.
Yes, you will need to file an initial report with the Alaska Division of Corporations, Business, and Professional Licensing. The initial report should be submitted within six months of incorporation online.
A sole proprietorship is a type of business structure that is not separate from its owner. Therefore, sole proprietorships have liabilities that are not limited. Limited liability companies are separate legal entities run by their members who have limited liability. It’s also mandatory for an LLC to get registered with a sole proprietorship does not need to register.
The type of corporation you form depends on your business goals. A standard corporation, also known as a c corporation or a c corp is made of a Board of Directors, allowing major decisions to be made to guide the company forward. Alternatively, if you want to be the primary person in control of business activities, a sole proprietorship would be the best business structure.
As the name implies, a shareholder’s agreement is an arrangement amongst the company shareholders. It basically contains information or clauses dealing with the dispute resolution between shareholders, the management of the business, as well as the valuation of shares and disposition or transfer of shares.
Corporation officers are in charge of managing and executing the business’s daily operations. The board of directors appoints the officers, and, therefore, the officers report to the board of directors.