As an emerging entrepreneur, you’re probably already aware that states like Alaska differ in formation and annual costs. Although its tax climate is one of the best in the country, being complacent with state obligations can put your company at risk in the long run. In this post, let our business experts discuss all Alaska LLC filing fees to help you avoid potential penalties.
Formation Costs for an Alaska LLC
Business Name Reservation
When forming a business, one of the first steps you need to take is finding a trading name. Typically, you can claim it by filing articles of organization if it’s available and not similar to any existing businesses operating within the state.
However, if you’re not yet ready to submit the paperwork, our experts highly recommend reserving your chosen LLC name. This process can be accomplished online or via mail with a fee of $25. After that, you’ll have exclusive rights to the name for 120 days and renew claims with the same charges.
Articles of Organization
Through filing your articles of organization, you’ll be officially listed as an operating business entity. Along with this filing, you have to pay a one-time registration fee of $250.
You can accomplish this requirement online or via paper forms with the Department of Commerce, Community, and Economic Development. Just make sure that you provide all the vital information to avoid delays and conflicts.
Operating Agreement
Although crafting an operating agreement isn’t a mandatory procedure during LLC registration, even our business specialists can assure you that this internal document will help your business in the long run.
And because operating agreements outline management provisions [1], we suggest seeking help from legal professionals when creating this document, even though you’re free to craft it yourself without any charges.
Initial Report
Unlike other states, Alaska also requires all LLCs under its jurisdiction to file initial reports six months after their official registration. You may think it’ll add up to your expenses, but this filing is free of charge, so you don’t have to worry.
EIN Registration
Running a business will involve hiring employees, opening bank accounts, paying taxes, and other transactions. These procedures will require you to provide an employer identification number, a nine-digit code proving that your business is indeed registered with the state. You can get it for free online via the IRS website.
Registered Agent
While it’s true that you can elect yourself as a registered agent, managing all paperwork from the state is a demanding obligation that can result in penalties and dissolution. Our best advice is to appoint a professional registered agent service.
Typically, these service providers offer packages through annual or monthly subscriptions ranging up to $300.
Business License/s
Next to your articles of organization is the application for business licenses. In Alaska, all LLCs must pay a $50 fee to acquire a legal license to operate. Some businesses offering professional services may need other licenses, so make sure to check the Alaska Department of Commerce website for more information.
Other Taxes
Besides paying for Alaska LLC filing fees, registered entities are obliged by the state to settle taxes. Generally, LLCs in this state are treated as a pass-through entity, which means you are not obliged to submit a corporate tax return. You’ll also have no problem with franchise or privilege taxes because Alaska doesn’t impose that.
Foreign LLC Registration
Suppose your business entity is already formed in another state. In that case, you must submit a Registration of Foreign LLC form instead of organization articles and pay $350 to qualify as a foreign LLC.
LLC Formation Services (Optional)
Running a business is not that simple, so most companies hire LLC formation services to handle all the registration legwork. These services take care of your paperwork accurately and efficiently as long as you provide them the vital details of your business. These providers charge annually/monthly depending on the services you purchased.
Alaska Annual LLC State Fees
Biennial Report
While other states require annual filings for businesses, Alaska only demands biennial reports from LLCs. Once every two years, you have to submit updated business information and pay a $100 fee for domestic companies and $200 for foreign LLCs.
Overall Costs
Excluding the extra services, the overall cost estimation of forming an LLC in Alaska sums around $400 for domestic businesses and $550 for foreign entities.
FAQ
How much does an Alaska business license cost?
An Alaska business license costs around $50 and can be accomplished online or by sending a paper application. There’s also a discounted rate for veterans and senior individuals that costs $25. Besides that, other licenses may be applicable with your LLC, so better check the Alaska Department of Commerce website.
Conclusion
Managing all Alaska LLC filing fees may appear overwhelming, but keeping track of your business expenses will greatly help your business to save money in the long run. If you find yourself confused about the process, there’s no shame in seeking help from professional services to aid the legwork.
For other LLC formation costs and regular annual fees, you can check the following locations:
