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How To Form A Corporation In Alaska

By: Startup 101
Last Updated: November 15, 2024

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A corporation is a business structure that provides personal liability protection by separating the owner’s personal assets from the business’s assets. A corporation is liable for the business’s actions and finances, while the owners (known as shareholders) are not.

Corporation Pros

  • Corporations provide liability protection for the shareholders
  • A corporation can raise non-debt financing by selling shares of the business
  • Taxation may be lower than a sole proprietorship or partnership

 

Corporation Cons

  • Corporations are more complex and expensive to set up than sole proprietorships, partnerships, and Limited Liability Companies (LLCs)
  • To maintain their liability protection, corporations must hold an annual board of directors meeting and shareholders meeting, take minutes at the meetings, issue shares, etc.

Generally, Corporations are chosen over Limited Liability Companies when a significant amount of funding is being raised from investors. However, due to the cost and complexity of a Corporation, most small businesses are better off forming an LLC.

Related: How To Form An LLC In Alaska

The following steps are to create a domestic Corporation, the most common type for businesses. The other types of corporations in Alaska include foreign corporations (out-of-state Corporations wanting approval to operate in the state physically), professional corporations (designated for corporations offering professional services), and non-profit Corporations.

Related: Alaska Business Checklist

Steps to Forming a Corporation in Alaska

Step 1: Choose a Name

The first step in forming a Corporation in Alaska is selecting a name.

The name of the Corporation has to be different from other entity names in the state of Alaska.  Check Corporation name availability in Alaska.

The name of the Corporation must include one of the following designators at the end of the business name:

  • Corporation
  • Company
  • Incorporated
  • Limited
  • Or an abbreviation for one of those words: Corp., Co., Inc., or Ltd.

A comma may be used after the business name and before the designator.  “Common Grounds Coffee Inc.” and “Common Grounds Coffee, Inc.” are both acceptable. Most words in the name are acceptable; however, names that include words “City,” “Borough,” or “Village,” which could imply that the corporation is a municipality, are not allowed.

If there is a name you want but are not ready to register the Corporation, you can file the Business Name Reservation (Form 08-557) with the Alaska Department of Commerce, Community, and Economic Development. The name reservation will hold a name for up to 120 days.

While a Corporation has to select a unique name that another Alaska Corporation isn’t using, that doesn’t guarantee the name isn’t being used by someone else.  Before registering a Corporation name, be sure to do a trademark search to verify it is available for you to use.

Step 2: Choose a Registered Agent

To have a Corporation in Alaska, an Alaska Registered Agent must be identified to act as a central point of contact for receiving legal documents, tax notices, summons, subpoenas, etc., on behalf of the Corporation. This agent can either be a resident of Alaska or a commercial registered agent service.

You can act as your own registered agent in Alaska and are not required to pay for a registered agent. The requirements to be a Registered Agent are generally available during normal business hours and have a physical street address in the state.  A PO Box is not allowed.

Related: Do I Need a Registered Agent in Alaska?

Step 3: File the Alaska Articles of Incorporation

Next, you can start filing the Articles of Incorporation with the Alaska Division of Corporations, Business, and Professional Licensing. The Articles of Incorporation can be filed online on the Alaska the Division of Corporations, Business, and Professional Licensing’s website or with the paper Form AS 08-400.

The information requested includes:

  • The name of the Corporation must contain the words “Corporation,” “Company,” “Incorporated,” “Limited,” or an abbreviation.
  • Disclosure of Corporate purposes, which describes the business activities of the Corporation. In addition, the NAICS code (North American Industry Classification System), a federal classification of businesses, will be needed.
  • Registered Agent’s name and physical address
  • Information regarding the shares of the Corporation.   This section includes the maximum number of shares to be authorized (more can be added at a later date), the class of shares (common stock is most common), and the par value (minimum price) of those shares.
  • The incorporator’s name and signature. This can be one of the corporation’s owners or someone helping with the formation of the entity.

The Alaska Articles of Incorporation can be filed online or submitted by mail.  The mailing address is:

State of Alaska Corporations Section
PO Box 110806
Juneau, AK 99811-0806

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Step 4: File the Initial Report

Within 6 months of forming the corporation, the Initial Report must be filed with the Alaska Division of Corporations.  There are no filing fees, and the Initial Report can only be filed online.

Step 5: Create Corporate Bylaws

Bylaws are the overall guiding principles and procedures of the business operations. The bylaws include the name of the corporation’s officers, the responsibilities of the board members, terms of office, procedures for removing or adding a new director or shareholder, policies for authorizing new shares, when shareholder and director meetings will be held, and more.

Step 6: Hold the Initial Board of Directors Meeting

During the first board meeting, the board of directors, at a minimum, will elect the officers of the corporation (the President, Vice President, Treasurer, and Secretary), review and approve corporate bylaws, choose a bank, issue shares of stock, and decide whether the Corporation will be taxed as a C corporation or S corporation.

It’s critical to remember that minutes are taken at all meetings to protect shareholders from lawsuits and court actions. The minutes record all decisions and actions taken during the meeting. Minutes aren’t filed with the state but should be stored with other corporate documents.

Step 7: Issue Shares of Stock

The corporation can exchange shares of stock in exchange for money or services. The number of stock-issued shares cannot exceed the number of authorized shares listed in the Articles of Incorporation. 

Step 8: Obtain an EIN

The EIN or Employer Identification Number (Federal Employer Identification Number, FEIN, or Tax ID Number) is a unique 9-digit tax identification number the Internal Revenue Service (IRS) assigned to a business. Similar to an individual’s social security number, the EIN identifies the corporation for tax purposes. The EIN will be needed to hire employees, open a bank account, register for business licenses and permits, file tax returns, and more.

The EIN is free when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Step 9: Elect the Corporation’s Form of Federal Income Taxation

By default, the Internal Revenue Service (IRS) taxes new corporations like C-corporations. C-corporations pay corporate taxes on their profits, and the owners pay personal income taxes on their dividends.

A Corporation can elect to be taxed as an S-Corporation. S-Corporations are taxed as “pass-through entities,” meaning the Corporation does not file corporate taxes. Instead, the profits (or losses) “pass through” to the shareholders, who then report this income on their individual taxes.

For most small businesses, the S-Corporation tax election is the most beneficial because it eliminates the double taxation of the C-Corporation. This tax election can be changed; however, it is highly recommended to talk with an accountant before making this decision.

Step 10: Open a Bank Account

Opening a bank account for your Corporation is important for liability protection as the bank account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account, such as:

  • banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original Articles of Incorporation showing the creation of the Corporation in addition to the bylaws.
  • Driver’s licenses of the members.
  • Depending on the age of the Corporation, an Alaska Certificate of Good Standing may be needed to prove the business entity is active and in good standing with the state.

Step 11: Apply for Business Licenses and Permits

Depending on what your business does and the county or municipality where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business License: Some states and several cities require businesses to obtain licensing before they can start.
  • Professional License: Certain services, such as barbershops and salons, must be licensed by the state.

Related: How To Register A Business In Alaska

Step 12: File the Biennial Report

Corporations are required to submit a biennial annual report on the Alaska Division of Corporations, Business, and Professional Licensing’s website.  The annual report is due every two years on January 2nd.

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