Alaska LLC Formation: Articles, Fees and the Biennial Report

What Alaska asks for beyond the Articles of Organization

An Alaska organizer hands the filing office two documents at once. AS 10.50.078 provides that the organizers "shall deliver with the articles a separate statement of the codes ... that most closely describe the activities in which the company will initially engage," drawn from the coded list of business activities the commissioner adopts under AS 10.06.870. The statement is a distinct document delivered alongside the Articles of Organization, not a field inside them.

Two further rules shape the company afterwards. Its recurring filing is a Biennial Report whose cycle is fixed by the year of organization rather than by one statewide date, and that report must name each person owning at least a five percent interest in the company and the percentage owned.

Filing the Articles of Organization

AS 10.50.070 provides that one or more persons may organize a limited liability company by signing articles of organization and delivering the signed articles to the department for filing. That department is the Department of Commerce, Community, and Economic Development, and the office named on the state's own forms is the Division of Corporations, Business and Professional Licensing, Corporations Section. Under AS 10.50.080 the company is organized when conforming articles are delivered for filing, so it dates from delivery rather than from the department's later acceptance.

AS 10.50.075 sets the complete statutory contents: the company name; the purpose for which it is organized; the mailing address of the registered office and the name of the registered agent; if applicable, that the company will be managed by a manager; and any optional provisions on internal affairs. The chapter, which AS 10.50.995 titles the Alaska Revised Limited Liability Company Act, allows a company to be organized "for any lawful purpose, including the rendering of a professional service."

Fees

3 AAC 16.065(a) sets the fee for a domestic limited liability company filing articles of organization under AS 10.50 at $150. Any other document filed under the chapter, including amendment, merger, consolidation or dissolution, carries a nonrefundable $25 fee, and 3 AAC 16.105(a) sets an additional fee of $150 for an expedited filing.

Where filings go

Mailed filings go to PO Box 110806, Juneau, AK 99811-0806, the address printed on the Division's domestic LLC forms, which also point filers to www.Corporations.Alaska.Gov and its Search Corporations Database to verify an entity's status and current information.

On its forms for amendment, dissolution, a statement of change and foreign LLC filings, the Division prints that "Standard processing time for complete and correct filings submitted to this office is approximately 10-15 business days (2-3 weeks)" and that "All filings are reviewed in the date order they are received."

Those filings also depend on the company being current. Form 08-485 warns that "The Articles of Amendment will not be filed if a biennial report is due or the signatures do not match what the Corporations Section has on record," and the other forms repeat it.

Naming the company

AS 10.50.020(a) requires that the name "must contain the words 'limited liability company' or the abbreviation 'L.L.C.,' or 'LLC'," and allows "limited" to be abbreviated as "Ltd." and "company" as "Co." Municipal references split in two: the name of a city, borough or village may be used, but the company name may not contain the word "city," "borough," or "village" or otherwise imply that the company is a municipality.

A name must also be distinguishable on the department's records from that of any other organized entity and from a reserved or registered name (AS 10.50.025). Under 3 AAC 16.120(a)(2), entity identifiers, punctuation, capitalization, spacing, and the presence or absence of an article, preposition or conjunction are not what makes a name distinguishable.

Reserving a name

Under AS 10.50.035 the department reserves an available name for the exclusive use of the applicant for a period of 120 days, and 3 AAC 16.010(a) sets the nonrefundable fee for an initial reservation or registration of a business name at $25. The regulation sets no cap on renewals; 3 AAC 16.010(c) requires a statement of intent to start a business if a reservation is renewed more than twice within a 12-month period.

Business name registration

A business name registration under AS 10.35 is made on Form 08-557 for the same $25 nonrefundable fee, though entities on record under Title 10 "do not need to file a business name registration for the entity's legal name." The form adds that "A corresponding Alaskan Business License must be obtained first in order to register an unincorporated ... or DBA business name." A registration expires on December 31 of its fifth year and may renew every five years.

Exclusive rights under Title 10 do not carry into licensing: the same form states that "Under Business Licensing Statutes, AS 43.70, there is no restriction on issuing multiple business licenses with the exact same name."

Registered agent and registered office

An Alaska LLC "shall continuously maintain in this state a registered agent and a registered office" (AS 10.50.055). The section admits only an individual resident of this state, or a domestic or foreign corporation authorized to transact business here, whose business office is the same as the registered office. Form 08-492 states that the registered agent "cannot be the entity listed in Item 3 on Page 1 and cannot be an LLC," and requires a registered office with an Alaskan physical location and an Alaskan mailing address, the state field on each marked "AK (mandatory)."

A change of agent or office is made on a Statement of Change for a $25 nonrefundable fee. AS 10.50.060 requires the statement to give the company name, the current registered office address, any new address, the current and any new agent's name, and that the change is authorized; it "becomes effective when the statement is filed."

A resignation takes effect 30 days after the written notice is filed unless the company appoints a successor sooner (AS 10.50.063). Where no agent is maintained, AS 10.50.065 makes the commissioner an agent on whom process, notice or demand may be served, and 30 days without an agent, or 30 days after a change without filing the statement, is a ground for involuntary dissolution. The Alaska registered agent guide has more.

The Biennial Report

AS 10.50.750 requires a biennial report from every limited liability company and every foreign one conducting affairs in Alaska. AS 10.50.760 makes it due before January 2 of the filing year and ties that year to organization: articles filed in an even-numbered year put the company on an even-year cycle, and articles filed in an odd-numbered year on an odd-year cycle. The report is delinquent if not filed before February 1, and a new company files its first one within six months after original organization, upon receipt of a form from the department.

AS 10.50.755 sets the contents: company name and home state; the Alaska registered office address and agent name; the names and addresses of the managers, or of the members if member-managed; and the name, address and percentage of each person owning at least a five percent interest. The fee under 3 AAC 16.065(c) is $100 for a domestic LLC and $200 for a foreign LLC doing business in the state.

If a manager, or a managing member, changes during the first year of the reporting period, AS 10.50.765 requires a notice of change amending the report before the following January 2.

When the report is late

3 AAC 16.065(c) sets a late charge of $25 for each year or part of a year of delinquency, and 3 AAC 16.065(d) adds a further 10 percent of the total amount of the filing fee. Under AS 10.50.408 the commissioner may dissolve a company delinquent six months in filing its report or in paying a fee or a penalty. Reinstatement runs for two years from the certificate, on payment of double the amount delinquent plus what the company would have paid had it not been dissolved, and only if the name is still distinguishable.

Operating agreement

AS 10.50.990 defines an operating agreement as "a written agreement among all of the members of a limited liability company about conducting the affairs of the company." AS 10.50.095 makes adoption permissive: the members may adopt one and may amend and repeal it, and the articles of organization "may restrict or eliminate the power of the members" to do so. It is not filed with the department, being absent from the contents AS 10.50.075 requires and from the 3 AAC 16.065 fee schedule. The operating agreement guide covers drafting.

Employer identification number

An employer identification number is issued by the federal Internal Revenue Service. The EIN guide sets out the application.

State taxes

The Alaska Department of Revenue's Tax Division states that "The State of Alaska currently does not have an individual income tax, therefore no employee withholding for state income tax is required," and that it "does not have a sales and use tax; however, some local jurisdictions impose local sales taxes." The complete fee schedule for AS 10.50 filings contains no franchise tax.

Alaska adopts the federal check-the-box regulations for limited liability companies, and the Form 6900 instructions state that an LLC doing business in the state must file an Alaska return consistent with its federal tax status. A company treated as a partnership files Form 6900, the Alaska Partnership Information Return, although the instructions excuse the filing where all of the partners or members are natural persons or are effectively treated as such; the return must be filed if any partner is a corporation or another partnership. A general partner or LLC member manager signs it, and it is due within 30 days of the date the federal return is required to be filed.

A company treated as a corporation files Form 6000, 6100 or 6150 instead, under rates graduated from 0% to 9.4%: the 0% rate applies to taxable income of $25,000 and below and the 9.4% rate to taxable income of $222,000 and over. Returns are due 30 days after the federal return due date, and full payment by the 15th day of the fourth month after the close of the tax year, a date the Tax Division states cannot be extended. The Alaska LLC tax guide goes further.

State business license

AS 43.70.020 provides that "For the privilege of engaging in a business in the state, a person shall first apply, on forms prescribed by the commissioner, and obtain a license, and pay the license fee." The license names the licensee, the line of business and the business name to be used. The fee under AS 43.70.030 is $50 a year, except that it is $25 where the business is a sole proprietorship and the sole proprietor is 65 years of age or older or a disabled veteran. Knowingly engaging in business without a current license carries a civil fine of up to $300.

AS 43.70.105 lists businesses the chapter does not apply to, among them a fisheries business, an insurance business, a mining business, services supplied as an employee, investment clubs and banks. Form 08-557 points applicants to www.BusinessLicense.Alaska.Gov.

Frequently asked questions

How much does it cost to file Alaska Articles of Organization?

3 AAC 16.065(a) sets the fee for a domestic limited liability company filing articles of organization under AS 10.50 at $150. An expedited filing under AS 10.50 carries an additional $150 fee under 3 AAC 16.105(a).

What does Alaska require alongside the Articles of Organization?

AS 10.50.078 requires the organizers to deliver with the articles a separate statement of the codes that most closely describe the activities in which the company will initially engage. The codes come from the list the commissioner adopts under AS 10.06.870.

When is an Alaska LLC biennial report due?

Before January 2 of the filing year. Articles filed in an even-numbered year put the company on an even-year cycle and articles filed in an odd-numbered year on an odd-year cycle, under AS 10.50.760(a). The report is delinquent if not filed before February 1, and the domestic fee is $100.

Can an LLC serve as registered agent in Alaska?

No. AS 10.50.055 admits only an individual resident of Alaska whose business office is the registered office, or a domestic or foreign corporation authorized to transact business in the state, and Form 08-492 states that the registered agent cannot be an LLC.

Does an Alaska LLC need a state business license?

AS 43.70.020(a) requires a person to obtain a license before engaging in a business in the state, and AS 43.70.030(a) sets the fee at $50 a year, or $25 for a sole proprietorship whose sole proprietor is 65 years of age or older or a disabled veteran. AS 43.70.105(a) lists businesses the chapter does not apply to.

What happens if an Alaska LLC misses its biennial report?

3 AAC 16.065(c) adds a late charge of $25 for each year or part of a year of delinquency and 3 AAC 16.065(d) adds a further 10 percent of the total filing fee. Under AS 10.50.408(a)(1) the commissioner may dissolve a company delinquent six months in filing the report or paying a fee or penalty.