Are you looking to form a corporation in Alaska, but you’re not familiar with the formation process? There are quite a few important steps you’ll need to take to create your Alaska corporation and maintain it, so this guide will outline the rules and regulations involved with this process.
To get started, please reference our 12-step guide below or hire a professional business incorporation service.
Rocket Tip: To see how some of the top online incorporation services stack up, here are two of our most popular comparisons.
How to Form an Alaska Corporation (in 12 Steps)
Step One) Determine Whether a Corporation is the Right Choice
Before beginning the process of forming an Alaska Corporation, it’s very helpful to review your business’ objectives and become familiar with your options as a business owner.
Should you form a corporation?
This guide explains how to create an Alaska corporation. When starting a new business, forming a corporation is just one of several options. Many businesses instead choose to set up a Limited Liability Company, or to be recognized as a sole proprietorship or partnership. Not sure which option is right for you? Read this guide from the SBA.
Does your business offer professional services?
If your business offers a professional service that requires a license from the state of Alaska (e.g. acupuncturist, architect, engineer, land surveyor, athletic trainer, audiologist, speech-language pathologist, barber, hairdresser, behavior analyst, big game commercial services provider, chiropractor, collection agent, concert promoter, construction contractor, dentist, dietician, optician, electrical administrator, domestic animals euthanizer, geologist, guardian, conservator, hearing aid dealer, home inspector, marine pilot, marriage and family therapist, massage therapist, mechanical administrator, doctor, midwife, mortician, naturopath, nurse, nurse’s aid, nursing home administrator, optometrist, pawnbroker, pharmacist, physical and occupational therapist, prescription drug monitor, professional counselor, psychologist, psychological associate, public accountant, real estate appraiser, social worker, telemedicine provider, underground storage tank worker, veterinarian, attorney), then you cannot form a standard Alaska business corporation. You may instead form a special type of corporation known as a professional corporation.
How will ownership be divided?
A corporation issues “shares” to its owners, who are known as its shareholders. Before forming your corporation, it’s important to decide how shares of ownership will be divided among the owners.
How will the corporation to be managed?
Corporations have two layers of control. The first layer is the Board of Directors. Directors are elected by the shareholders and meet periodically (as a “Board”) to make key decisions and set the strategic direction of the company. The Board of Directors appoints “officers” who are responsible for carrying out the Board’s initiatives and managing the corporation’s day-to-day activities. Directors and officers can be (and often are) the same people. Before forming your corporation you should determine who your initial director(s) will be.
Step Two) Choose a Name
One of the most important aspects of the incorporation process is naming your business. There are three major elements to consider when choosing a name:
When naming a corporation in the state of Alaska, you will need to include one of the following words or abbreviations: incorporated, corporation, limited, company, Inc., Corp., Ltd., or Co. Your corporation’s name also cannot include any words or abbreviations that indicate other business types, like the phrase “limited liability company” or the initials “LLC.” You also are not allowed to include words that refer to certain types of businesses (like “bank” or “law office”) unless your business fits those descriptions.
In addition to the legal considerations, you might want to identify your line of business or your mission in your company name. For example, you can display any closely held values in your name, like using the word “green” for environmentally friendly businesses.
A Name You’re Proud of
Keep in mind that this is your business, so you should choose a name that you’re proud of, and that you enjoy sharing with potential customers. You should also make sure it sounds good when spoken aloud, and also looks good when written down.
Check whether your preferred name is available: Visit the State of Alaska Corporations Database to check whether it is already in use. If it’s not unique enough, you may need to tweak it or come up with a new name altogether.
Consider Reserving a Name
For a $25.00 fee, you can instantly reserve a name online for up to 120 days. This will ensure that your name is not taken by another company during the incorporation process.
Step Three) Select a Registered Agent
Alaska corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation in step four.
Who can be my Registered Agent?A registered agent must have a physical address within the state of Alaska where mail and legal notices can be served during regular business hours. You can hire a service to act as your Registered Agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.
The Alaska Secretary of State says that,
The registered agent of a corporation is an agent upon whom process, notice, or demand required or permitted by law to be served upon the corporation may be served. If a corporation fails to appoint or maintain a registered agent in this state, or if its registered agent cannot, with reasonable diligence, be found at the registered office, the commissioner is an agent of the corporation upon whom the process, notice, or demand may be served.“
Our Recommendation: We recommend hiring a professional service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off the public record.
Rocket Tip: You can get a free registered agent service when hiring a service like ZenBusiness or Incfile to incorporate online. Check out their reviews and how it works below.
Step Four) Complete Your Articles Of Incorporation
This is THE document that formally registers your corporation with the state of Alaska.
You can file online, or fill out the PDF and send it in via mail. Do not email any filings.
Keep in mind that you are acting as the incorporator when you fill out and submit the Articles of Incorporation. You should sign as the incorporator before submitting the document.
|Cost to File||$250|
|Time to Complete Filing||10-15 business days|
|Agency||Alaska Department of Commerce, Community, and Economic Development|
Division of Corporations, Business and Professional Licensing
|Agency contact info for filing questions|
Step Five) Establish a Corporate Record
Corporations are required under Alaska law to document and keep a permanent record of all important company decisions.
The official corporate record may be kept at the corporation’s principal place of business, or stored in a safe location elsewhere. You should take the opportunity to set up a secure digital or physical location for storing company records as soon as possible.
Step Six) Designate a Board of Directors
The incorporator is responsible for selecting initial director(s) of the corporation. Unless initial directors were specified in the Articles of Incorporation, the incorporator should record initial director appointments in a signed document and file it to the corporate record. This document is known as the “incorporator’s statement.” A sample incorporators statement can be found here.
The initial directors (minimum of three) will serve until new directors are elected at an annual shareholder meeting, or as otherwise indicated in the bylaws. The incorporator may serve as an initial director.
Step Seven) Create Corporate Bylaws
Corporate bylaws set out the rules and procedures for how the corporation will operate. Some important topics typically covered in the bylaws include:
- How shareholders will conduct votes
- The total number of directors and how each director will be elected
- How often the board of directors will meet
- The types of officer roles that will be appointed
- Procedures for resolving internal disputes
Bylaws are not legally required in Alaska, but they are strongly recommended. The Alaska Department of Commerce, Community, and Economic Development specified that bylaws can be adopted, amended, or repealed, but that the articles of incorporation could limit the board or outstanding shares’ ability to do so.
Bylaws help your business run smoothly, and are sometimes required by financial institutions for opening business bank accounts or acquiring loans.
Either the incorporator or the initial directors may prepare the company bylaws. The bylaws should be recorded in an internal company document, signed by the incorporator or a director, and filed to the corporate record. The bylaws are not filed with the state of Alaska.
Popular Strategies for Preparing Bylaws
- Use a free online template. Northwest Registered Agent has a great free template you can download.
- Hire a lawyer to draft the bylaws. If your business has investors, is already profitable, or has multiple co-owners, we strongly encourage you to hire a lawyer experienced in Alaska Corporate law to help you draft suitable bylaws. Use Avvo to find an Alaska attorney who can help you draft bylaws.
Step Eight) Hold First Board Meeting
After designating a board of directors and preparing bylaws, the new corporation should call for an initial board meeting. The incorporator often arranges and attends this first meeting. During the first board meeting, the initial directors should plan to cover the following topics:
- Review and approve corporate bylaws
- Designate officers to manage day-to-day business affairs
- Choose a bank
- Approve issuance of stock certificates
- Determine whether the company should elect to be taxed as a C corporation or S corporation (see step Nine for more details)
Recording Meeting Minutes: a detailed record of all key discussions and decisions during the board meeting should be prepared and distributed to all board members for their review and approval. This record is known as the “minutes”. A copy of the minutes should be sent to each director for review and filed in the company record.
Step Nine) Handle Tax Obligations
You’ll need a federal tax ID number (EIN) to operate a corporation in Alaska. You can obtain your EIN from the IRS for free, and it’s a fairly painless and simple process. An EIN enables your corporation to hire employees, file corporate taxes, open business bank accounts, and more.
A major decision for any corporation is determining whether to be taxed as a C corporation or an S corporation. Take a look at how these two formats differ:
- C Corp: The majority of corporations are C corporations, as they are subject to far fewer restrictions than S corps. With a C corp, profits are taxed at the corporate level, and again on the personal tax returns of the shareholders, resulting in what’s commonly referred to as double taxation.
- S Corp: This is only an option if your corporation has fewer than 100 shareholders, only issues one class of stock, is not owned by another business entity, and does not have any foreign shareholders. If your corporation meets these requirements, you can select the S corp’s pass-through taxation which eliminates the double taxation issue of C corps. S corp dividends are not taxable.
On the state level, every Alaska corporation is subject to the corporation income tax rate. Depending upon the type of business your company conducts, your corporation may be subject to additional taxes, to include the motor vehicle fuel tax, oil and gas production tax, or vehicle rental tax. Among most commonly required business taxes include, but are not limited to, the employer’s withholding tax, and sales and use tax. Contact the Department of Commerce, Community, and Economic Development at (907) 465-2550 or the Department of Revenue at 907-269-6620 (Anchorage Office) or 907-465-2320 (Juneau Office).
Specific cities, counties, tribal areas, etc. may have specific taxation requirements as well, so it is vital to consult local tax authorities to ensure your corporation meets those obligations as well. Here’s some business resources for each of the largest cities in Alaska by population:
Step Ten) Obtain Business Licenses and Permits
All companies incorporated in the state of Alaska are required to obtain a business license and there are hundreds of industry-specific permits and licenses that you may need to acquire depending on the type of corporation you intend to establish. Take a look at the National Conference of State Legislatures’ Occupational Licensing Statute Database to determine if any of them will apply to your corporation.
Some counties in Alaska may have county-specific licensing and permitting requirements. It is essential to review the business regulations on county government websites or by calling the counties directly in order to ascertain whether your company will need licensing or permitting specific to that county.
Step Eleven) Acquire Insurance
Every corporation with employees located in the state of Alaska is required by law to obtain workers’ compensation insurance You can learn more about this type of insurance and how they apply to Alaska businesses by visiting the Division of Workers Compensation website. No matter what line of business you’re in, you need these policies.
In addition, you should also pursue general liability insurance and other more industry-specific types of insurance, but these are not legally required.
Step Twelve) Open a Business Bank Account
To operate a corporation and receive the limited liability protection that comes with it, you have to keep your personal assets entirely separate from your business assets. Due to this requirement, it’s strongly advised that you acquire a business bank account for your corporation.
Get Help Forming a Corporation
The process of incorporating in any state can be a lengthy one. If you run into any trouble along the way, remember that there are plenty of organizations that can help you navigate the incorporation process.
Online Incorporation Services
If you would like to hire an affordable business incorporation service to create your corporation for you, services like ZenBusiness and Incfile can help you out. These service providers can handle most of the formation process, while still charging much lower rates than a business attorney’s fees.
There isn’t the same level of personalization that a lawyer can provide, but online incorporation services can still be a tremendous help. The only major issue with these service providers is the fact that they can’t provide any actual legal advice, so you need to know what you want ahead of time.
Alaska Business Attorney
There are some situations where hiring a business lawyer is a preferable route to using an online incorporation service. The corporation as a business structure can be highly complicated, and if you want to have the peace of mind that every single step was taken care of by a true expert, hiring a business attorney to form your Alaska corporation is the way to go.
If you would like to pursue this route, there are some convenient services that can help you choose the right lawyer for your business. We like to use Avvo, which has extensive reviews and ratings for hundreds of Alaska business lawyers, which can make it much easier to select an attorney who has your best interests in mind, and also has the expertise to get the job done right.
In this state, the Alaska Small Business Development Center (ASBDC) to educate and build businesses and business owners across Alaska. With seven regional offices across the state, the the ASBDC provides resources, education, and tools to help businesses flourish. The ASBDC is partly funded by the U.S. Small Business cf Administration.