Starting a Corporation in Alaska | What You Need to Know

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Start a Corporation in Alaska

In Alaska, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Alaska, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Alaska.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

How to Start a Corporation in Alaska

What is a Corporation in Alaska?

A corporation in Alaska is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Alaska are required to have at least Three directors. One of the main advantages of a corporation in Alaska is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Alaska is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Alaska if you would like to provide limited liability protection to your shareholders rather than Alaska LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Alaska

To start a corporation in Alaska, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Alaska naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Alaska-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Alaska Secretary of State‘s business name database and Business Name Search in Alaska. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $25 and mail name reservation fee of $25. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by two methods, online and by mail, which costs around $25. In addition, the DBA’s validity in Alaska is five years, which you can file in Alaska Secretary of State.

You can check out How to File a DBA in Alaska for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Alaska Registered Agent Services to check in forming Alaska Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Alaska are required to have at least Three directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Alaska, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

After you appoint the initial board of directors in your Alaska corporation, the next step is to write and file a Articles of Incorporation. In writing, the Alaska Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Alaska corporation, you must prepare and file Articles of Incorporation with the Alaska Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Alaska Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Alaska, the Articles of Incorporation filing fee costs around $250 for filing online and by mail. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Get the online form from Secretary of State, fill it up, and submit. Don’t refresh the page during the process. It will erase everything.
  • Offline filing: Send the form to State of Alaska Corporations Section, P.O. Box 110806, Juneau, AK 99811

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Alaska, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Alaska corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Alaska corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Alaska are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Alaska Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Alaska licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Alaska corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Alaska for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Alaska corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Alaska can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Alaska Department of Revenue for guidance on your specific obligations.

Step 11: Biennial Reporting and Ongoing Compliance

Once your Alaska corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Biennial Report with the Alaska Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Alaska

Even if you have established your corporation in Alaska, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Alaska has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Alaska are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Alaska

In forming a corporation in Alaska, a filing and Biennial fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Alaska, it costs $250 for filing online and by mail. The corporation in Alaska also has to file an Biennial Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

What are the requirements for starting a corporation in Alaska?
You must choose a unique business name, file Articles of Incorporation with the Alaska Division of Corporations, and pay a filing fee.
Do I need to have a physical address in Alaska to incorporate there?
No, but you do need to have a registered agent with a physical address in Alaska to act as your legal representative in the state.
Can I form an Alaska corporation online?
Yes, you can file your Articles of Incorporation online through the Alaska Division of Corporations website.
What is the filing fee for incorporating in Alaska?
The filing fee is currently $250.
How long does it take to incorporate in Alaska?
It can take 5-7 business days for the state to process your Articles of Incorporation and approve your business name.
What is a registered agent in Alaska?
A registered agent is a person or company that you designate to receive legal notices, tax documents, and other important correspondence for your corporation.
Can I be my own registered agent in Alaska?
Yes, you can act as your own registered agent if you have a physical address in Alaska that is open during business hours and can receive legal documents.
What is a Certificate of Good Standing in Alaska?
A Certificate of Good Standing is a document issued by the state of Alaska indicating that your corporation is in compliance with all state laws and requirements.
Can I get a Certificate of Good Standing for my Alaska corporation anytime?
Yes, you can request a Certificate of Good Standing from the Alaska Division of Corporations anytime after your corporation has been formed.
How do I maintain my Alaska corporation?
You will need to file an Annual Report and pay a fee each year to maintain your corporation in good standing with the state of Alaska.
Can I change my corporation’s name in Alaska after it has been formed?
Yes, you can change your corporation’s name by filing Articles of Amendment with the Alaska Division of Corporations and paying a fee.
What is an Alaska Corporation Annual Report?
The Annual Report is a form you must file each year with the Alaska Division of Corporations to keep your corporation in good standing.
When is an Alaska corporation’s Annual Report due?
The Annual Report for an Alaska corporation is due by January 2nd of each year.
Do I need to have a business license before I can start an Alaska corporation?
Possibly – depending on your industry, you may need a specific license or permit to conduct your business in Alaska.
Can I form a non-profit corporation in Alaska?
Yes, you can form a non-profit corporation by filing Articles of Incorporation with the Alaska Division of Corporations and meeting specific IRS requirements.
Can I incorporate in Alaska if I’m not a United States citizen?
Yes, you can form an Alaska corporation regardless of your citizenship status.
What is the process for dissolving an Alaska corporation?
You must file Articles of Dissolution with the Alaska Division of Corporations, pay any outstanding taxes or fees, and distribute the corporation’s assets.
Does an Alaska corporation need to have bylaws?
Yes, an Alaska corporation should have bylaws that explain the governance structure and operational procedures of the corporation.
Is an Alaska corporation liable for debts or lawsuits?
Yes, a corporation is a separate legal entity from its owners and can be sued or hold debts in its own name.
What is the minimum number of shareholders required for an Alaska corporation?
There is no minimum number of shareholders required for an Alaska corporation.
Can an individual be the sole owner of an Alaska corporation?
Yes, an individual can be the sole shareholder and owner of an Alaska corporation.
How are Alaska corporations taxed?
An Alaska corporation can elect to be taxed as a regular C corporation or as a pass-through entity like an S corporation.
Can an Alaska corporation have more than one class of stock?
Yes, Alaska corporations can issue both common and preferred stock.
What is an S corporation election in Alaska?
An S corporation election is when a corporation elects to be taxed as a pass-through entity for federal income tax purposes.
How do I file for an S corporation election in Alaska?
You must file IRS Form 2553 with the Alaska Division of Corporations within 75 days of the start of the calendar year in which you wish to be taxed as an S corporation.
Can an Alaska corporation do business in other states?
Yes, an Alaska corporation can operate in other states as long as it meets the other state’s business registration and licensing requirements.
What is an Alaska Limited Liability Corporation?
An Alaska LLC is a type of business entity that combines the limited liability protection of a corporation with the pass-through taxation of a partnership or sole proprietorship.
What are the benefits of forming an Alaska LLC?
Some benefits of forming an Alaska LLC include reduced personal liability, flexible management structure, and pass-through taxation.
Can I convert my Alaska LLC to an Alaska corporation?
Yes, you can convert your Alaska LLC to an Alaska corporation by filing Articles of Conversion with the Alaska Division of Corporations.
What is the minimum number of shareholders required to form a corporation in Alaska?
It only requires one shareholder to form a corporation in Alaska.
What are the basic requirements for setting up a corporation in Alaska?
To set up a corporation in Alaska, you need to file articles of incorporation with the secretary of state, appoint directors, and obtain required permits and licenses.
Is it necessary to have a registered agent in Alaska?
Yes, it is mandatory to appoint a registered agent for your Alaska corporation.
Are there any residency requirements for directors of the corporation in Alaska?
No, there are no residency requirements for directors of an Alaska corporation.
How long does it typically take to form a corporation in Alaska?
The process can take up to two weeks if done within the office. If done by mail, it could take several months.
What is the process of incorporating in Alaska?
The process involves choosing a name, filing articles of incorporation, and obtaining tax IDs, licenses, and permits as required by law.
What are the upfront costs of forming a corporation in Alaska?
The fee for filing articles of incorporation in Alaska ranges between $250 to $525.
What are the annual fees for Alaska corporations?
The annual report fee in Alaska is $100 regardless of the income of the corporation.
Is there an income tax in Alaska?
No, Alaska doesn’t have state income tax, so you don’t need to worry about that if you start a corporation there.
Are Alaska corporations required to pay franchise taxes?
Alaska doesn’t have a franchise tax.
Do corporations need to obtain a business license to operate in Alaska?
Yes, obtaining a business license is required in Alaska, although the particular license and application fee fees vary among the different boroughs.
What is an S Corp?
An S Corporation refers to a specific tax election that can be made after you form your corporation, which enables you to pay less in taxes.
Is a business plan and corporate governance policy mandatory while setting up a corporation in Alaska?
It would be beneficial to have both a business plan and a governance policy in place when incorporating in Alaska, though it is not mandatory.
Can an LLC be converted into a corporation in Alaska?
Yes, as in every state, in Alaska, it is possible to convert an LLC into a corporation if desirable.
Is there a need to file periodic reports for Alaska businesses?
Yes, every Alaska business is required to file an annual report.
What steps are needed to dissolve a corporation in Alaska?
First, the corporation must be dissolved under their corporate records to stop future compliance requirements. A formal dissolution, where appropriate paperwork is filed with the Alaska Division of Corporations,, is then required.
Can a corporation use a PO box instead of a physical address in Alaska?
No, using a PO Box is not acceptable as a physical address for your corporation in Alaska.
Can one be the registered agent and incorporator for their Alaska corporation?
Yes, one can be both the registered agent and incorporator for their Alaska corporation.
Are Alaska corporations subject to double taxation?
Corporations in many parts of the country are subject to double taxation, but Alaska doesn’t have this.
As an Alaska corporation, is it mandatory to have bylaws?
Yes, it is required to have bylaws as awareness of rights of business owners.
Does Alaska have an expedited filing process for corporations?
Yes, Alaska has a same-day expedited filing process that costs more but is usually processed on the day it is filed.
Can a foreign corporation be granted permission to operate a business in Alaska?
Yes, it is permissible, provided it registers to do business with the Department of Commerce, Community, and Economic Development.
How long is the term of a corporation in Alaska?
In Alaska, corporations have an exclusive and substantial life of 50 years that may start when the documented instruction is first submitted with DCCA Division of Corporations.
In Alaska, can a corporation do business using its assumed name instead of its legal name?
Yes; legality allows corporations to rebrand while still remaining registered under any other authorized alternative (also known as foreign) name.
Can the ownership structure of an Alaska corporation be modified?
Yes, the ownership formation of an Alaska corporation may be altered by offering and purchasing exchangeable financial instrumentations from the original shareowners.
Who approves a corporation’s name in Alaska?
In Alaska, the Division of Corporations, Business, and Professional Licensing (DCBPL) upholds the name usage requirements for corporations.
Does Alaska have laws ensuring prior from registration foul play?
Yes; Alaska has clear laws protecting foreign business investors such as exploring illegal registration for the safeguarding of domestic purchasers/dealership market environments.
Are Alaska businesses allowed to utilize endowments instead of interchange transfers?
Corporations in Alaska have the alternate option of raising money through contributions from endowments, offering compounding progressive tax reparation subsidies.
Is an Employee Identification Number (EIN) mandatory for an Alaska corporation?
Yes, an EIN is mandatory for all Alaska corporations that employ anyone, creditors, and other principal structures to pay federal taxes.

Also Read

How to Save Money While Forming Your Alaska Corporation

One of the first ways to save money when forming your Alaska corporation is to do thorough research before starting the process. It’s essential to understand the requirements, regulations, and fees associated with registering a corporation in the state. By being well-informed, you can avoid costly mistakes and unnecessary expenses that can arise from lack of knowledge.

Another way to save money is to consider hiring a professional service to help with the formation process. While it may seem counterintuitive to pay for assistance, experts can guide you through the complicated paperwork and legal requirements, saving you time and potential costly mistakes. With their help, you can ensure that your corporation is formed correctly the first time, avoiding the need for expensive amendments or fixes later on.

Additionally, when choosing a business structure for your corporation, consider the long-term costs associated with each option. While forming a C corporation may offer certain advantages, it can also come with higher taxes and fees compared to an S corporation or limited liability company (LLC). By weighing the pros and cons of each structure, you can make an informed decision that aligns with your financial goals and budget.

Furthermore, when it comes to naming your corporation, opt for a simple and straightforward name that doesn’t require expensive trademark searches or legal consultations. By choosing a unique yet uncomplicated name, you can streamline the registration process and save money on unnecessary legal fees.

As you prepare to file the necessary paperwork with the state, consider utilizing online resources and DIY platforms to handle the formation process independently. Many affordable options exist that can walk you through each step, saving you money on attorney fees or professional services. However, it’s important to weigh the cost of your time and resources against the potential savings of going it alone.

Lastly, don’t overlook the importance of maintaining your corporation once it’s formed. Staying compliant with annual reports, taxes, and regulations is crucial to avoiding costly penalties and legal issues down the road. By being proactive and organized in your corporate governance, you can save money on fines and fees that can accumulate over time.

In conclusion, forming a corporation in Alaska can be a costly endeavor, but there are ways to save money and make the process more affordable. By being diligent, informed, and strategic in your approach, you can create a solid foundation for your business without overspending. Remember that research, planning, and prudent decision-making are key to saving money while forming your Alaska corporation.

Conclusion

Starting a corporation in Alaska involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Alaska corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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