Every year, thousands of Americans take a chance to pursue their dreams of being business owners. They face each challenge filled with hope and enthusiasm. While some succeed and thrive, some end up failing. The more you know about starting an llc in Alaska, the higher the possibility of making well-informed decisions that will benefit your company.
Choosing To Form An LLC
One of the most important decisions that you have to make is choosing the right business entity structure. What you pick will have a long-lasting impact on your taxes and personal liability. It will also determine the regulations your business has to implement and the paperwork you have to complete.
A popular choice for many new entrepreneurs is a limited liability company (LLC). Generally, an LLC is a hybrid structure. It offers pass-through taxation. At the same time, it limits the liabilities of the owners. You can also choose whether you start an LLC as a single owner or with multiple members.
Advantages Of An LLC In Alaska
- As long as you do not engage in fraudulent and illegal activities, you will not be personally responsible for debts, liabilities, and lawsuits affecting the company.
- The profits that your LLC generates can go straight to you. Owners will report them on their personal tax returns.
- There will be no double taxation.
- Filing, compliance, and management are simpler than a corporation.
- It gives your company credibility.
- It helps you build a credit history for your business, which will be beneficial in case your company needs to obtain lines of credit and loans in the future.
Registration Process To Form An LLC In Alaska
Laws for business formation depend on the state where you want to operate. You have to make sure that you understand the requirements to avoid any problems in the future. Forming a business in Alaska requires you to follow a certain process.
A Distinguishable Name
While choosing an appealing name is important, it is also necessary for you to make sure that it is unique. Conduct a name search to find out if the one you want is already in use. You should also follow the naming requirements of Alaska. If you want to reserve your name, you can apply with the State of Alaska Corporation office. Doing this will ensure that no other entity can use the name you wish to have for your company for up to 120 days.
You can also use a name that is different from the LLC’s legal name stated in the Articles of Organization. This is commonly known as a trade name or doing business as (DBA). If that is the case, you will have to register the trade name with the Department of Commerce by submitting a New Business Name Registration form and paying the $25 filing fee.
Filing For An Alaska LLC
To register your business with the state, you have to file the Articles of Organization with the Department of Commerce. This document comes with a corresponding filing fee of $250.
The processing time for LLC formation documents will depend on how you filed them. The Department of Commerce immediately flags online filings for review. Meanwhile, paper filings take more time. If you submit from March to September, the standard processing time is from 10 to 15 business days. However, if you file from October to February, there may be delays longer than 15 business days.
Articles Of Organization – The initial paperwork you need to take care of is the Articles of Organization. It includes important information related to your company. Prepare the following to properly complete the form:
- Name of the LLC
- Purpose of the company
- Duration of the LLC, if not perpetual
- Management style
- Name and address of your registered agent
- A brief explanation of your company activities
- Your North American Industry Classification (NAICS) code
Registered Agent – Alaska, like other states, requires all companies to designate a registered agent. This will be the official receiver of legal documents on behalf of your LLC. Generally, they serve as the point of contact. Here are some things you need to consider when selecting your registered agent:
- It can be an individual who is a resident of Alaska.
- You can also choose a third-party organization that has authorization to transact in Alaska.
- It should not be the LLC itself.
- You need to get the approval of the agent before you appoint them.
- Your registered agent has to have a physical address in the state. It cannot be a P.O. box.
- The registered agent has to be available during normal business hours.
Operating Agreement – You do not have to submit this document to the state. However, you may need to have one that includes all the details of every procedure related to your business operations. It can also specify the operational and financial relationships of the LLC owners. Here are some of the information that you can put in the document:
- A list of all the terms that the members have agreed on regarding the operations of the LLC
- Voting rights
- Management style
- Members’ roles
- Instructions for the dissolution of the company
- How to admit new owners and remove established members
- How to amend the procedures within the operating agreement
You have to keep in mind that deciding to form a business in Alaska is just the first step. You will have to submit all of the compliance requirements and legal documents as well.
Ongoing Compliance – You should also know the compliance requirements for LLCs in Alaska. Upon formation, your LLC will need to submit an initial report. You can file it within six months of your company’s creation for free. If you fail to submit on time, the state may administratively dissolve your company.
Aside from that, your company needs to submit biennial reports. This comes with a $100 fee. If your initial filing was in an odd-numbered year, then the deadline for your report will be on January 2 of every odd-numbered year. If you filed in an even-numbered year, then you have to submit your biennial reports on January 2 of every even-numbered year.
Since the profits go directly to the members, they will be reporting the earnings that they get from the LLC on their personal tax returns. Owners have to pay self-employment tax, which applies to all of the earnings withdrawn from the business. The current self employment tax rate is 15.3%.
If you plan on selling products or offer certain services, you may have to collect and pay sales taxes. There may not be a statewide sales tax in Alaska, but many localities require them, so the sales tax rate will depend on the region, city, or county where your company is located.
An LLC that has employees may also face additional taxes. These may include a payroll tax withholding and federal tax withholding.
Here are some of the things you may need to prepare for your tax and regulatory requirements:
- Employer Identification Number (EIN)
- Business license
Starting your own business is a huge step. Since you will have to take on many responsibilities, it can be daunting at first. Taking on challenges blindly can lead to problems and even end up costing you more than what is necessary.
Aside from preparing yourself emotionally and financially, it is also important to understand the process and know what types of paperwork you need to file in Alaska. Fortunately, you do not have to do it alone. With the help of a reliable third-party organization, you can complete all of the processes and compliance requirements without hassle.
If you need help in forming your Alaska LLC or are looking for a commercial registered agent, contact DoMyLLC today. Our team of experts has the necessary knowledge and experience when it comes to ensuring business compliance. We also offer personalized solutions to make sure that the services you are getting fit your needs and circumstances. You can also count on us if you have queries and concerns. Our team is ready to assist you through our live support services.