How to Form a Professional Corporation in Alaska (2024 Guide)

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Forming a Professional Corporation in Alaska

If you would like to start and learn how to form a corporation in Alaska, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in Alaska are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in Alaska or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

Form a Professional Corporation in Alaska

What is a Professional Corporation in Alaska?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the Alaska. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in Alaska, if you changed your mind.

– WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in Alaska

To form a Professional Corporation in Alaska for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Biennial report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Alaska, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in Alaska

After you have decided to form a professional corporation in Alaska, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In Alaska, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. You must file a name reservation application in the Alaska Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for Alaska DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the Alaska Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Alaska. Forming a professional corporation for your service will be easier if you have Registered Agent in Alaska.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in Alaska, a Registered Agent costs is ranging from $50 – $200. To make it easier, you can hire Alaska Registered Agent Services for your professional corporation.

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Step 4: File the Articles of Incorporation in Alaska

After you hire a Registered Agent to form a professional corporation, the next step is to file the Alaska Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Articles of Incorporation in Alaska may be done with two ways, online and by mail. The Articles of Incorporation fee may vary from different state. However, in Alaska, it costs $250 for filing online and by mail. 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. . For offline filing, Send the form to State of Alaska Corporations Section, P.O. Box 110806, Juneau, AK 99811.

Step 5: Write an Operating Agreement in Alaska

An operating agreement in Alaska is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in Alaska

The next step is to form the first board of directors for your PC in Alaska. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the Alaska Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In Alaska, you must have Three directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with Alaska Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in Alaska.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in Alaska. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

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 the 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.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in Alaska for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in Alaska easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in Alaska

Before your professional corporation operates in Alaska, you must have Alaska Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in Alaska ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in Alaska

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the Alaska tax classification for the taxes that an LLC in Alaska must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in Alaska.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • Alaska Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in Alaska

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Biennial Report in Alaska

In Alaska, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Biennial Report. Also, it should include all of your yearly financial activity. You must submit the report every 2 years in the Alaska Secretary of State.

FAQs

What is a professional corporation in Alaska?
A professional corporation in Alaska is a business entity formed by licensed professionals, such as doctors or lawyers, who want to limit their personal liability in their professional practice.
What are the benefits of forming a professional corporation in Alaska?
The benefits of forming a professional corporation in Alaska include personal liability protection, the ability to raise capital, and potential tax advantages.
Can professionals from different fields form a professional corporation together in Alaska?
No, professionals from different fields cannot form a professional corporation together in Alaska. Only professionals within the same field, such as doctors or lawyers, can form a professional corporation together.
How do I register my professional corporation in Alaska?
To register a professional corporation in Alaska, you will need to file Articles of Incorporation with the State of Alaska Division of Corporations, Business, and Professional Licensing.
Is there a filing fee to register a professional corporation in Alaska?
Yes, there is a filing fee to register a professional corporation in Alaska. The current fee is $250.
Do I need a registered agent for my professional corporation in Alaska?
Yes, you will need a registered agent for your professional corporation in Alaska. The registered agent must be located in Alaska and available to receive important legal and tax documents on behalf of your corporation.
What is the minimum number of shareholders required to form a professional corporation in Alaska?
In Alaska, a professional corporation must have at least one shareholder.
Can an out-of-state professional form a professional corporation in Alaska?
Yes, an out-of-state professional can form a professional corporation in Alaska as long as they follow the proper guidelines and meet the requirements set forth by the state.
Can a professional corporation in Alaska have non-professional shareholders?
No, a professional corporation in Alaska may not have non-professional shareholders.
Are there annual requirements for a professional corporation in Alaska?
Yes, there are annual requirements for a professional corporation in Alaska, including filing an Annual Report and paying any applicable fees.
Can a professional corporation in Alaska change its professional license type?
Yes, a professional corporation in Alaska can change its professional license type, but it must follow the proper guidelines and procedures set forth by the state.
How long does it take to form a professional corporation in Alaska?
The processing time to form a professional corporation in Alaska can vary, but it typically takes 5-7 business days.
What professional organizations in Alaska require a professional corporation structure?
Professionals, such as doctors or lawyers, in Alaska who are members of certain professional organizations may be required to form a professional corporation structure.
Who regulates professional corporations in Alaska?
Professional corporations in Alaska are regulated by the State of Alaska Division of Corporations, Business, and Professional Licensing.
What tax forms does a professional corporation in Alaska need to file?
A professional corporation in Alaska may need to file federal form 1120, Alaska form 040, and various other state tax forms depending on its business activities.
Is a single-member professional LLC allowed in Alaska?
No, Alaska does not allow single-member LLCs for licensed professionals.
Does Alaska have a franchise tax for professional corporations?
No, Alaska does not have a franchise tax for professional corporations.
Are there any restrictions on the ownership of a professional corporation in Alaska?
Yes, only licensed professionals from the same field, such as doctors or lawyers, can own a professional corporation in Alaska.
Can a professional corporation in Alaska also operate in another state?
Yes, a professional corporation in Alaska may also operate in other states, but it must follow the laws and regulations of those states.
What is the difference between a professional corporation and a limited liability company?
A professional corporation is owned by licensed professionals who offer professional services, while a limited liability company can be owned by anyone and can offer a variety of services.
What is the difference between a professional corporation and a general corporation in Alaska?
A professional corporation is a specific type of corporation formed only by licensed professionals, while a general corporation is a corporation formed by anyone for any purpose.
Can a professional corporation in Alaska be dissolved?
Yes, a professional corporation in Alaska can be dissolved, but it must follow the proper guidelines and procedures set forth by the state.
Is a professional corporation in Alaska required to carry insurance?
It is recommended that a professional corporation in Alaska carry liability insurance to protect against lawsuits.
Is a professional corporation required to have a board of directors in Alaska?
No, a professional corporation in Alaska is not required to have a board of directors.
What happens if a licensed professional leaves a professional corporation in Alaska?
If a licensed professional leaves a professional corporation in Alaska, they must sell their shares back to the corporation or its remaining shareholders.
Can professionals from different states form a professional corporation in Alaska together?
Yes, professionals from different states can form a professional corporation in Alaska together, as long as they meet the requirements set forth by the state.
Can a professional corporation in Alaska issue stock?
Yes, a professional corporation in Alaska can issue stock, but only to licensed professionals within the same field.
Does Alaska require a business license for a professional corporation?
Yes, a professional corporation in Alaska is required to obtain a business license from the State of Alaska Department of Commerce, Community, and Economic Development.
Can a foreign entity convert to a professional corporation in Alaska?
No, a foreign entity cannot convert to a professional corporation in Alaska. The entity must dissolve and re-register as a professional corporation.
What is a professional corporation?
A professional corporation is a legal entity that is formed by professionals, such as doctors, lawyers or accountants, for the purpose of providing services in their particular field.
Is it required to register as a professional corporation in Alaska?
Yes, professionals must register as a professional corporation in Alaska if they wish to incorporate their practice.
What types of professionals are allowed to form a professional corporation in Alaska?
In Alaska, licensed professionals (like doctors, lawyers, engineers, etc.) who are authorized to work in their professional field of practice are allowed to form a professional corporation.
How do I form a professional corporation in Alaska?
Professionals must file Articles of Incorporation with the state of Alaska to form a professional corporation, either done independently or use LLC formation services.
Can a professional corporation in Alaska be owned by non-licensed professionals?
No, only licensed professionals can own shares in a professional corporation in Alaska.
Are there specific requirements for naming my professional corporation in Alaska?
Yes, the name of a professional corporation must contain the names of one or more of its shareholders or of one or more persons who have been associated with the business, and must include the words ‘Professional Corporation’ or APC after its name.
Can I use abbreviations, such as ‘PC’ instead, in the name of my professional corporation?
Yes, the name of a professional corporation may be stated in an abbreviated form, such as ‘PC’ or ‘P.C.’.
Is there a minimum number of shareholders required to form a professional corporation in Alaska?
Yes, there must be at least two shareholders to form a professional corporation in Alaska.
Can an individual own multiple professional corporations in Alaska?
Yes, an individual can own multiple professional corporations in Alaska, assuming they’re legitimately licensed to practice it.
Does the state of Alaska require professional corporations to have officers?
Yes, a professional corporation in Alaska must have officers.
Can someone who is not a licensed professional be an officer for a professional corporation in Alaska?
Yes, someone who is not a licensed professional can be an officer for a professional corporation in Alaska.
What is an operating agreement and does every professional corporation in Alaska need one?
An operating agreement states the bylaws and any requirements for membership. In Alaska, professionals who form a professional corporation want, but not need, to have one.
How often are professional corporations in Alaska required to file annual reports?
Professional corporations in Alaska are required to file annual reports on or before January 2nd of each year.
Where do I file my professional corporation’s annual report in Alaska?
Professional corporations can file their annual report online with the Alaska Business Corporation registry.
What type of taxes does a professional corporation in Alaska have to pay?
professional corporations in Alaska are subject to corporate income tax.
Do professional corporations in Alaska have to pay both federal and state business taxes?
Yes, professional corporations in Alaska are subject to both federal and state taxes on their business income.
Are there any special tax rules I need to be aware of when forming a professional corporation in Alaska?
Yes, Alaska has specific tax rules and deductions for professional corporations, which helps to lessen the burden of paying state taxes.
What is the minimum amount of authorized shares required to form a professional corporation in Alaska?
The state of Alaska requires at least one share authorized for a professional corporation to be formed.
What happens if my professional corporation in Alaska fails to file its annual report?
If a professional corporation in Alaska fails to file its annual report for two consecutive years, it’s filed as inactive, and if After five more years of inactivity in filing, its charter is revoked.
How do I change my professional corporation’s name in Alaska?
The most common way to change a professional corporation’s name in Alaska is to amend its Articles of Incorporation.
How do I dissolve my professional corporation in Alaska?
To dissolve a professional corporation in Alaska, file a certificate of dissolution or termination effectively with the Alaska Business Corporation registry.
Is there a fee to dissolve my professional corporation in Alaska?
Yes, Alaska Business Corporations registry will have a fee plus tax to dissolve your professional corporation.
How long does the process of forming a professional corporation typically take in Alaska?
The process of forming a professional corporation in Alaska typically takes two-to-three weeks, assuming everything is completed to the letter of the procedure.
What is the age requirement to form a professional corporation in Alaska?
There is no minimum age that is required to form a professional corporation in Alaska.
Can a professional corporation in Alaska own property under its name?
Yes, they can own property under the corporation’s name. Alaska recognizes a professional corporation as a symbolic entity capable of owning properties and making facilities under its business name.
Are there specific requirements or regulations for retaining legal contracts in Alaska?
Yes, Alaska corporations should train through all mandatory documents.
Do professional corporations in Alaska have to obtain a business license?
Yes, professional corporations in Alaska must obtain a business license.

Also Read

How to Save Money While Forming Alaska Professional Corporation

One of the first ways to save money when forming a professional corporation is to do thorough research on the requirements and regulations in Alaska. By understanding the specific laws and procedures that govern professional corporations in the state, business owners can avoid costly mistakes that could lead to fines or delays in the formation process. Additionally, researching different options for legal and financial services providers can help business owners find more affordable and reputable professionals to assist with the formation process.

Another key strategy for saving money while forming an Alaska professional corporation is to consider the structure of the business. Choosing the right entity type and organizational structure can have a significant impact on the costs associated with formation and ongoing operation. For example, some business owners may benefit from forming a limited liability company (LLC) instead of a professional corporation, as LLCs tend to have lower registration fees and fewer compliance requirements.

Business owners should also carefully consider the timing of their professional corporation formation. Rushing through the process can lead to unnecessary expenses, such as expedited filing fees or last-minute changes to legal documents. Taking the time to plan out the formation process can help business owners avoid these additional costs and ensure that the professional corporation is set up correctly from the start.

When it comes to choosing a registered agent for the professional corporation, business owners should shop around for the best price. Registered agent services can vary significantly in cost, so it’s important to compare prices and packages from different providers before making a decision. Additionally, some business owners may consider serving as their own registered agent to save money, although this option may not be feasible for all individuals.

Finally, business owners forming an Alaska professional corporation should be mindful of ongoing maintenance costs. This includes annual fees, business licensing requirements, and compliance obligations that must be met to keep the corporation in good standing. By staying on top of these requirements and planning for them in advance, business owners can avoid costly penalties and ensure that their professional corporation remains in good standing with the state.

In conclusion, forming an Alaska professional corporation can be a costly process, but there are several ways that business owners can save money along the way. By doing thorough research, choosing the right business structure, carefully planning out the formation process, comparing prices for services, and staying on top of ongoing maintenance costs, business owners can keep expenses in check and set their professional corporation up for success. With a little foresight and strategic decision-making, forming an Alaska professional corporation can be a financially savvy move for aspiring entrepreneurs.

Conclusion

In conclusion, forming a professional corporation in Alaska is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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