Our work is reader-supported, meaning that we may earn a commission from the products and services mentioned.

StartUp 101 Logo
Close this search box.

How To Start A Business In Alaska

How To Start A Business In Alaska

Advertising Disclosure


How To Start A Business In Alaska

How To Start A Business In Alaska

Thinking about starting your own business in Alaska? You’re in for an exciting adventure! Alaska is a place full of opportunities, but also with its own set of challenges. Here’s the good news: you don’t need to figure everything out by yourself. I’m here to guide you through the essential steps, from crafting a solid business plan to setting up the business structure, registering the business, and more. Let’s make your business dream a reality, step by step.

Steps To Start A Business In Alaska

Step 1: Choose a Business Idea

The first step in starting a business in Alaska is having a good business idea. Whether you’ve already settled on one or are still exploring your options, we’re here to help. Our collection of business ideas offers insights into hundreds of different industries, including startup costs and practical tips to guide you.

Step 2: Write a Business Plan

The next step after finalizing the idea isn’t to get the business registered but instead to write a business plan. While writing a business plan for the first time might be a little intimidating, it helps take your vision and map out how to make it a successful reality. A business plan will not only help you secure funding, but it also serves several purposes, such as outlining your business’s goals and timelines, calculating how many clients or sales you need to break even, calculating the funding needed to start, and more.

Related: How to write a business plan

Step 3: Find the Money

After calculating how much it’s going to start the business in the business plan, the next step is to secure the necessary funding. There are a number of small business financing options, which may include personal savings, loans from friends or family, conventional bank loans, or Small Business Administration (SBA) guarantees. Let’s break down these different sources.

  • Personal funds: Using personal savings, retirement accounts, or home equity to fund your business is the most straightforward option. This approach allows you to maintain full control over your company and avoid debt or share ownership.
  • Conventional bank loan: Traditional bank loans are a popular source of funding for small businesses. To obtain a bank loan, you’ll need a personal investment (typically between 15% and 25%), a business plan, good credit, and collateral. Interest rates and repayment terms may vary depending on the lending institution and your creditworthiness.
  • SBA loan guarantees: The U.S. Small Business Administration (SBA) offers loan guarantee programs that help small businesses access financing through participating lenders. The SBA guarantees a portion of the loan, reducing the risk for lenders and making it easier for small businesses to obtain financing. The most popular SBA loan program is the 7(a) loan, which can be used for various purposes such as working capital, equipment purchases, or real estate acquisition.
  • Microloan programs: Microloan programs provide smaller loan amounts to businesses that may not qualify for traditional loans due to a lack of credit history or collateral, making them more accessible to new or underserved businesses.
  • Investors: Seeking investments from investors or venture capitalists is another option for some startups. Taking on investors means giving up a portion of ownership and control in your business, but they can provide significant capital and valuable expertise to help your company grow.

Related: Understanding the different types of business funding.

Step 4: Select a Business Structure

The next step in starting a business in Alaska is selecting a business structure, also referred to as a business entity, and refers to how a business is legally organized. There are four primary business entities: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). A brief description of each is below.

sole proprietorship is the most simple and common type of business structure in the state of Alaska, where the business is owned and operated by a single individual. In a sole proprietorship, there is 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 name of the owner, a DBA (also referred to as Doing Business As, Fictitious Business Name, Assumed Name, or Trade Name) can be, but is not required to, register with the state. This registration provides exclusive use for 5 years and can be renewed.

Related: How to start a sole proprietorship in Alaska

General partnerships are a type of business structure where two or more individuals agree to share the ownership, profits, and responsibilities and are personally liable for the partnership’s debts and liabilities. A general partnership can be created through an oral or written agreement, though it is highly recommended to have a written partnership agreement to outline the rights, responsibilities, and expectations of each partner.

A partnership can choose to register a DBA if desired.

Related: What is a partnership?

corporation is a type of business structure that is legally separate from its owners (shareholders). It is formed under state law by filing Articles of Incorporation with the Alaska Division of Corporations, Business, and Professional Licensing. A corporation provides limited liability protection to its owners, meaning they are not personally responsible for the corporation’s debts and obligations.

Related: How to form a corporation in Alaska

The Limited Liability Company (LLC) 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 Articles of Organization with the Alaska Division of Corporations, Business, and Professional Licensing.

Related: How to form an LLC in Alaska 

Forming a corporation or LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular formation services include:

IncFile - Great service and free registered agent the first year.

Northwest - Privacy-Focused: Free registered agent and private business address for 1 year!

ZenBusiness - Easy to use and free registered agent for 1 year!

Step 5: Register the Business

After the business structure is in place, the next step is to register the business. Certain licenses and permits will be needed to operate a business in Alaska, and the ones needed will vary on the business’s activities and location. Some common business registrations include:

  • State of Alaska Business License: The State of Alaska requires anyone conducting business in the state to obtain a state business license from the Alaska Department of Commerce, Community, and Economic Development.
  • Local business licenses: In addition to the statewide business license, some municipalities also require businesses to be licensed by the city to operate.
  • Employer Identification Number: The Employer Identification Number, or EIN, is a nine-digit tax identification number issued by the Internal Revenue Service (IRS). This number identifies a business operating in the U.S. and is used for paying payroll taxes, filing tax returns, and more. Much like what a social security number is to a person, the EIN is a unique number for a business, and while many businesses will need to get an EIN, some do not. Also, there is no cost to register for an EIN through the IRS.
  • Professional licensing: Some services, such as acupuncturists, barbers, home inspectors, accountants, and others, require professional licensing in Alaska.

Related: What business licenses and permits are needed in Alaska?

Step 6: Open a Business Bank Account

With the business structure set up and registration out of the way, you will be ready to open a business bank account. Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business. Every bank is different, but in general, they will request the following:

  • Sole proprietorship & partnership: Trade Name Certificate, EIN or SSN, and the owner(s) state ID
  • Corporation: Articles of Incorporation, bylaws, Certificate of Good Standing, EIN, and the owner(s) state ID
  • LLC: Articles of Organization, Operating Agreement, Certificate of Good Standing, EIN, and the owner(s) state ID

Step 7: Hire Employees

If you plan on hiring employees, there are a number of steps and responsibilities to take care of as a new employer.

To get registered, new employers will be sure to have their EIN in addition to the Employer Account Number from the Alaska Department of Labor & Workforce Development.

Employers are responsible for reporting new hires, verifying employees are eligible to work in the U.S., income tax withholding, unemployment insurance, and submitting payroll withholding taxes.

Related: Steps to hiring your first employee in Alaska

Step 8: Obtain Business Insurance

The next step may not impact every business, but it’s still important to do your research to understand the risks and if coverage is necessary.

Most types of business insurance are optional, except for workers’ compensation insurance. The Alaska Workers’ Compensation Act requires every employer with one or more employees to obtain workers’ compensation insurance unless the employer has been approved as a self-insurer by the Alaska Workers’ Compensation Board.

Even if insurance isn’t required and there is a fire, theft, or personal injury lawsuit, the business owner may have to pay out-of-pocket for damages and legal fees. Home-based businesses may want to consider business insurance, too, as personal home and vehicle policies may not cover a business loss.

Related: Types of insurance your business may need

Step 9: Set up a Bookkeeping System

Before opening the doors, having a system in place to track income and expenses needs should be taken care of. Businesses in Alaska have various tax responsibilities, and while Alaska does not impose a state sales tax or a personal income tax, businesses are still subject to certain taxes and filings.

Related: Setting up the accounting for your business

This material is property of StartingYourBusiness.com

Common Questions When Starting A Business In Alaska

Is Alaska a good place to start a business?

Given the remote location, harsh climate, and relatively small population, whether Alaska is a good place to start a business depends on various factors, including the type of business, your target market, the availability of resources, and your personal preferences.

Some of the pros of starting a business in Alaska include the following:

Natural resources: Alaska has abundant natural resources, such as oil, natural gas, seafood, and timber. Businesses in these industries may find it advantageous to operate in the state.

Tourism: Alaska’s breathtaking landscapes, wildlife, and outdoor recreational activities attract tourists from all over the world. Businesses in the tourism and hospitality industries may benefit from this steady stream of visitors.

Small business support: Alaska offers various programs and resources for small businesses, such as the Alaska Small Business Development Center (SBDC) and the Alaska Department of Commerce, Community, and Economic Development.

Unique market opportunities: The state’s remote location and harsh climate create market gaps that other businesses aren’t willing to fill.

Is an LLC better than a sole proprietorship?

Choosing a business entity is a very difficult decision, and we get a lot of questions about whether the sole proprietorship or Limited Liability Company is the best option. The benefits are different for each business owner, but here are a few things to consider when considering the two.

The sole proprietorship is a popular business entity and has advantages such as ease of setting up, fewer administrative requirements, and lower cost than the Limited Liability Company. The biggest downside of the sole proprietorship is that the owner’s personal finances and the finances of the business are tied together. This means if the business is sued or the business can’t pay its debts, the owner is personally responsible.

The LLC is a legal entity that separates the assets of the business and its owners. If the business is sued, the owners are typically not personally liable. Another significant advantage of the LLC comes from its tax flexibility. Once the LLC is profitable enough, it can provide distributions to the owners, which are taxed much less than the self-employment taxes of the sole proprietorship.

Related: Sole Proprietorship vs. LLC – What’s right for you?

What are the steps to starting an LLC in Alaska?

The main steps that most Alaska LLC need to complete include:

1. Making sure the LLC name is available
2. Appointing an Alaska Registered Agent
3. Filing the Articles of Organization
4. Within 6 months of forming the LLC, the Initial Report needs to be filed

To learn more about starting an LLC, check out our guide on starting an LLC in Alaska.

How much does it cost to start an LLC in Alaska?

The cost to file the Articles of Organization with the Alaska Department of Commerce, which is the paperwork to start an Alaska LLC is $250.

Does a sole proprietor need a business license in Alaska?

Yes, a sole proprietor needs a business license in Alaska. In Alaska, anyone engaging in a trade or business, including sole proprietors, is required to obtain a business license. This rule applies regardless of the size of the business or the amount of income generated. The business license serves as a basic permission to operate your business legally within the state.

Alaska Small Business Resources

There are 71,781 small businesses in Alaska, which is 99.1% of all businesses in the state,1 and almost 140,000 people are employed by these small businesses.2 Because of the economic impact of small businesses, there are a number of small business resources to help Alaska businesses start and grow. Some of these include resources from the Alaska Department of Commerce, Community, and Economic Development, Alaska Small Business Development Center, and the Alaska Women’s Business Center. Learn about these and other Alaska small business resources.


  1. Small Business Administration ↩︎
  2. Census Bureau ↩︎

How To Start A Business In Alaska

How To Start A Business In Alaska

Leave a Reply

Your email address will not be published. Required fields are marked *

Some (but not all) of the links on StartUp101.com are affiliate links. This means that a special tracking code is used and that we may make a small commission on the sale of an item if you purchase through one of these links. The price of the item is the same for you whether it is an affiliate link or not, and using affiliate links helps us to maintain this website.

StartUp101.com is also a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Our mission is to help businesses start and promoting inferior products and services doesn’t serve that mission. We keep the opinions fair and balanced and not let the commissions influence our opinions.