After deciding on your idea, registering the business is the next. In this stage, we will learn how to legally set up a business, which involves choosing the right business structure, selecting an allowable name, and filing the required documents with state offices.
Related: Starting A Business In Alaska Checklist
Step 1: Choose a Business Structure
The first step in registering a business in Alaska is selecting a business structure, also referred to as a business entity, which refers to how a business is legally organized. There are four primary business structures: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).
Sole Proprietorship
A sole proprietorship is the most simple and common type of business structure in Alaska. As a sole proprietor, there is no state registration and no legal distinction between the owner and the business, meaning the owner is personally responsible for all aspects of the business, including liabilities, debts, and taxes.
Unless the business will operate under the owner’s name, an Alaska DBA (also referred to as Doing Business As, Fictitious Business Name, Assumed Name, or Trade Name) can be registered with the state but is not required to. There are a few reasons to register the name, with the primary one being that this registration provides exclusive use of the name for five years and can be renewed.
Related: How to Start a Sole Proprietorship in Alaska
General Partnership
General partnerships are a type of business structure that is similar to a sole proprietor, but two or more individuals agree to share ownership, profits, and responsibilities and are personally liable for the partnership’s debts and liabilities. A general partnership does not register with the state and can be created through an oral or written agreement, though it is highly recommended that a written partnership agreement outline each partner’s rights, responsibilities, and expectations.
Related: What is a partnership?
Corporation
A corporation is a type of business structure that is legally separate from its owners (shareholders). This separation provides limited liability protection to its owners, meaning they are not personally responsible for the corporation’s debts and obligations. The downsides include compliance requirements and administrative burdens of holding annual meetings for directors and shareholders, taking minutes at the meetings, issuing stock certificates, appointing a registered agent, and more.
A corporation is formed under state law by filing Articles of Incorporation with the Alaska Division of Corporations, Business, and Professional Licensing.
Related: How to Form a Corporation in Alaska
Limited Liability Company (LLC)
The Limited Liability Company is a type of business structure that combines the limited liability protection of a corporation, where the LLC members have personal liability protection, with the flexibility and simplified taxation of a sole proprietorship or partnership.
An LLC is formed under state law by filing the LLC Articles of Organization with the Alaska Division of Corporations, Business, and Professional Licensing.
Related: How to form an LLC in Alaska
Step 2: Select a Business Name
The next step in the registration process is choosing a name for your Alaska business. Your business name is often the first impression potential customers will have of your company, so it’s important to select one that is memorable and compliant with state regulations.
Here are some key considerations when selecting a business name in Alaska:
- Availability: The process of registering a business name will vary depending on the business structure, but the name must be distinguishable from the names of all other businesses registered in Alaska. Before registering a business name, you should first do an Alaska business name search through the Alaska Division of Corporations, Business, and Professional Licensing database to verify that no other business is using it.
- Legal Requirements: The name must comply with Alaska’s naming rules, which vary depending on your chosen business structure:
- For corporations, the name must include “Corporation,” “Incorporated,” or an abbreviation like “Inc.” or “Corp.”
- For LLCs, the name must contain “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.”
- Sole proprietorships and partnerships are not required to register a “Doing Business As” (DBA) name in Alaska. However, no other business can register the same business name by registering for an Alaska DBA.
- Government-affiliated words such as “city,” “township,” “village,” “borough,” or other words that may indicate affiliation with the government may not be used.
- No wording in a business name that is considered vulgar or obscene can be used.
- Trademark Considerations: While not required, you may want to search federal and state trademark databases to ensure your chosen name doesn’t infringe on existing trademarks.
Related: How to do a Trademark Search Before Choosing a Business Name
Step 3: Federal Employer Identification Number (FEIN)
The Federal Employer Identification Number (FEIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security Number. Companies can apply for an EIN at no cost through the IRS website or by submitting a paper form.
Step 4: State of Alaska Business License
The Alaska Department of Commerce, Community, and Economic Development’s Division of Corporations, Business, and Professional Licensing requires all businesses operating in the state to have a state business license.
Online processing is the fastest, with immediate processing. The standard processing time for the mail-in form varies depending on when it is submitted. From March to September, expect 10–15 business days, while during the heavy business licensing season (October to February), processing will take longer.
To obtain a State of Alaska business license, visit the Alaska Department of Commerce, Community, and Economic Development.
Step 5: Occupational Licensing
Alaska regulates many professions, requiring registration and licensing before practitioners can offer services. The Alaska Division of Corporations, Business & Professional Licensing oversees most of these occupations. Some examples include:
- Acupuncturists
- Barbers
- Home inspectors
- Accountants
- Architects
- Chiropractors
- Dental hygienists
- Electricians
- Real estate agents
Each profession has specific requirements, fees, and application processes.
In addition, some businesses require licenses from other state departments. These include:
- Commercial Fisheries – Alaska Department of Fish and Game
- Food Establishments – Alaska Department of Environmental Conservation
- Auto Dealerships – Alaska Division of Motor Vehicles
- Bed & Breakfasts – Local municipality and Alaska Department of Environmental Conservation
- Seafood processing and shellfish permits – Alaska Department of Environmental Conservation
Before starting your business, check with the appropriate state agency to ensure you have all the necessary licenses. Requirements may vary based on your specific business activities and location within Alaska.
Step 6: State Tax Registration
Although Alaska doesn’t have a statewide sales tax, some cities may require you to register for local sales tax collection. For example, the City of Juneau and the Kenai Peninsula Borough have sales tax requirements. If your business will sell goods or services, it’s essential to check whether your locality requires this.
Step 7: City Business Licenses
In addition to the state business license application, some cities also require businesses to be licensed to operate. The rules for business registration vary depending on where the business is located and what the business does.
Below are a few cities that have licensing requirements.
- Anchorage: The Municipality of Anchorage requires a business license for businesses such as pawnbrokers, ice cream trucks, shooting galleries, tow trucks, and more
- Fairbanks: The City of Fairbanks requires every person or legal entity within city limits to obtain a state business license and an annual city business license as well.
- Juneau: Any person or business must register with the sales tax administered by the Juneau Finance Department before making sales, offering services, or renting within the City and Borough of Juneau.
- Kenai: The city requires a Kenai Peninsula Borough Sales Tax Certificate whenever any business activity is conducted within Kenai City limits. Additionally, the City requires licenses for mobile food vendors, transient merchants, and passenger vehicles for hire.
- Matanuska-Susitna: Any individual or company engaging in business activity in the Matanuska-Susitna Borough will need to register for a business license.
- Wasilla: All businesses located or making sales, rentals, or providing services within the city limits of Wasilla are required to obtain a City of Wasilla business license.
Step 8: Local Building & Zoning Permits
When establishing your business in Alaska, it’s necessary to understand and follow local building and zoning rules. These requirements differ based on your business location and type. Here’s what to keep in mind:
- Zoning Rules:
- Check with your local city or borough planning office for specific regulations.
- Different areas may limit the types of businesses allowed in certain zones.
- If you’re running a business from home in Alaska, you might need to apply for a home occupation permit, especially in cities like Anchorage, Fairbanks, or Juneau.
- Occupancy Permits:
- Most Alaskan cities require businesses to get an occupancy permit before operating from a physical location.
- This permit confirms that your business space meets safety standards and zoning requirements.
- Contact your local fire marshal’s office to learn about occupancy limits and safety regulations.
- Building Permits:
- If you plan to build a new structure or modify an existing one, you’ll likely need a building permit.
- In Alaska, the city or borough building department typically issues these permits.
- Even small changes may require a permit, so check with local authorities before beginning any work.
- Signage Permits:
- Many Alaskan towns and cities have rules about business signs.
- For example, in Anchorage, you need to get a sign permit from the Development Services Department before putting up any outdoor signs.
- Be aware of limits on sign size, lighting, and placement, which can change depending on location and zoning area.
- Environmental Rules:
- Alaska has specific environmental regulations due to its varied landscapes.
- Your business may need to follow additional rules if it’s near sensitive areas like wetlands or wildlife habitats.
- Talk to the Alaska Department of Environmental Conservation about environmental regulations that might affect your business location.
- Rural Areas:
- If you’re starting a business in rural Alaska, some areas might have fewer zoning rules.
- However, you could face unique challenges related to land use, especially if your business is on or near Native Alaskan lands.
- Speak with local tribal authorities and the Alaska Native Regional Corporations for guidance in these areas.
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