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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
Alaska is one of the most small business-friendly states in the nation, and its famously low tax burden and income tax rate are attracting more and more entrepreneurs. To start a business in Alaska, you must undergo an incorporation process. In this guide, we’ll explain how to go from dreaming up an exciting business idea to running a successful Alaska business.
Start Operating in Alaska: Key Points
Small businesses make up 99.1% of all companies in Alaska, and there are diverse opportunities for entrepreneurs to explore.[1]
You can run your business as a sole proprietorship or form an LLC, a corporation, or a nonprofit.
All Alaska businesses (except for a few exceptions) must apply for an Alaska business license to operate in the state.
Easily start your business and remain compliant with our all-in-one tools, guiding you well past the initial setup with the right support and documents.
Ready to Start an Alaska Business?
Setting up a business in Alaska starts with having the correct information at your fingertips. The incorporation process may seem daunting at first but don’t worry. Even a completely new entrepreneur can successfully form a small business in Alaska.
Yet, doing your research is essential. You’ll have many crucial decisions to make during the formation process, and mistakes can be costly. To support you, we created a step-by-step guide that you can follow to successfully register your new business with the state and start operating in Alaska. Becoming a business owner is just around the corner.
1. Choose a Business Idea
Every successful business was just an idea at first. Choosing a business idea that lights you up is the first step to starting a business in Alaska, perhaps the most important one. Your business should make you feel passionate and excited even on the most challenging days, so spend a fair amount of time choosing a business idea.
If you already have a clear vision of what you want your Alaska business to do, you can skip to the next step. But if you’re still not sure what you want your new business to be all about, here are a few tips to help you find inspiration.
Dedicate yourself to a cause you care about. You may run a small business, but it can significantly impact your community. Think about the problems your local area faces and how you can solve them or at least improve the current state. Check out these nine green small business ideas you can start today.
Get creative about your skill set. Chances are, you’re good at something. Maybe even excellent at it. Many entrepreneurs are told that they can’t make money doing something they love, but it’s rarely true. If you were feeling courageous, what would you like to do?
Brainstorm how you can improve an existing product or service. You don’t need to develop a brand-new product or service to start a successful business. Think about a business that already exists and analyze what you can do better than them.
As a small business owner, you should be passionate about your work. Your business idea can grow and evolve, but it’s essential to start with something that makes you feel excited.
→ Looking for more tips? Read about the thirteen places entrepreneurs can find inspiration and our best small business ideas for recent college grads.
2. Draft an Alaska Business Plan
Having an exciting business idea is a great start. Still, it would be best to determine how to turn it into a functional new business. This is why you need a business plan. It’s a detailed document articulating your business vision and how you plan to achieve your goals. It is a thought-through framework for making important decisions and securing business funding.
Drafting your business plan before starting the business formation process is essential. Although having a business plan is not a legal requirement to begin operating in Alaska, it can expose you to costly mistakes, such as an inability to cover business expenses because you didn’t expect them.
There’s no business plan format that every business needs to follow. However, some of the sections you may consider including are:
Executive summary: a one-page section that summarizes the most important parts of your business plan and gives your mission statement.
Market analysis: an analysis of industry trends, what kind of solutions already exist on the market, and how you stand out from your competitors.
Target audience: an in-depth overview of who your target customers or clients are.
Products/services: an explanation of the products or services you’re going to be selling and what their main features and benefits are.
Financial plan: an overview of important financial considerations for your business, such as revenue and expenses projections and funding.
Operations plan: a summary of how your business is going to deliver your product and/or service and whether you’re going to hire employees.
Marketing plan: a strategy overview of how you’re going to promote your brand and attract customers or clients.
This is not an extensive list. Depending on your goals for your startup, you can create a shorter or longer version of a business plan.
If you want more inspiration, the Small Business Administration website, sba.gov, has downloadable business plan templates. The State of Alaska Department of Commerce, Community, and Economic Development also has a helpful business plan checklist.
3. Select a Business Name
Deciding on a business name for your Alaska business is a crucial step that can’t be overlooked. Your Alaska business name should reflect your business idea, resonate with your target market, and comply with Alaska’s naming requirements for business entities.
Some of the most critical Alaska business name requirements include:
If your business is not incorporated, you can’t use words implying incorporation as part of its name. For example, you can’t use “incorporated” or “corporation” as a sole proprietor.
If your business is incorporated, then it “must contain ‘corporation,’ ‘company,’ ‘incorporation,’ or ‘limited,’ or an abbreviation, as part of its name.”[2]
Your business name can’t imply that it is a governmental unit (ex: city, village) if it’s not a governmental unit.
Your business name can’t be misleading and must accurately reflect the nature of your business activities. If you operate a bakery, your business name shouldn’t claim that you’re a florist.
Don’t include words with professional licensing restrictions, such as “engineer” or “lawyer,” if you don’t have the appropriate business licenses.
There’s no state-level restriction on including vulgar words in your business name. Still, your local authorities or business bank may have regulations in place. Double-check with local authorities if you want to include vulgar language in your business name.
Your Alaska business name should be unique. You can search Alaska businesses via a government database or use the Swyft Filings Free Business Name Search tool to get the answers faster.
Once you find a business name you like, reserve it with the Secretary of State for 120 days by paying a $25 fee.[3] Name reservation is an excellent option for entrepreneurs who want to hold off starting a business in Alaska but want to ensure their business name will be available once they decide to incorporate.
This is also an excellent time to get your domain name and social media handles.
4. Choose a Business Structure
Choosing a business structure for your Alaska business is a significant step to successful incorporation. Your business structure determines how your startup will be taxed and organized, so researching your options is essential.
You can incorporate your new business as a limited liability company, a corporation, or a nonprofit. A sole proprietorship is the default unincorporated business structure, but you can file for a DBA. We’ll give you more information on different types of business structures below.
Sole Proprietorship
A sole proprietorship is the most straightforward business to start in Alaska. You don’t need to file any organizational documents with the Secretary of State, and there are fewer formalities and reporting requirements than with other business structures. The only thing you need to do to become a sole proprietor is to fulfill business licensing requirements.
However, running your business as a sole proprietorship comes with significant disadvantages. As a sole proprietor, your assets are not separate from your business assets. If your sole proprietorship faces debts or litigation, you may lose personal property, such as your house or car.
If you want to conduct your business under an assumed name, you can apply for a DBA (doing business as). Sole proprietors also need a DBA to open a business bank account. You may form a general partnership if you want to do business with a business partner.
As a sole proprietor, you are your business. A sole proprietorship may work well for entrepreneurs in the early stages of business. Still, we recommend forming a legal entity as soon as possible.
Limited Liability Company (LLC)
Many entrepreneurs decide to form a limited liability company because it’s a hybrid business structure that combines a sole proprietorship's simplicity with a corporation's liability protection. LLCs are easy to manage, yet they protect your assets from potential litigation. Swyft Filings can help you start an Alaska LLC in just a few minutes.
Corporation
A corporation is a robust legal entity that provides its owners with strong personal liability protection and the ability to take advantage of multiple benefits, such as issuing stock to shareholders.
However, a corporation is typically more expensive to organize and more challenging to operate than a limited liability company. It may also be subject to double taxation when you must pay taxes on both personal and business levels. If you run an LLC, you can “pass-through” your business profits and losses to your income tax return.
You can avoid double taxation if you qualify for an S Corporation status.
Forming an Alaska corporation is a nuanced process, but Swyft Filings is here to help. Answer a few questions about your business, and we’ll prepare and file all the necessary paperwork with the Secretary of State.
Nonprofit
A nonprofit business structure is reserved for businesses advancing a social cause without expecting a financial gain. They’re funded by donations, not investments, and may qualify for tax-exempt status. Charitable organizations and churches are examples of nonprofits. If you want to form a nonprofit in Alaska, Swyft Filings can help.
When it comes to choosing the proper structure for your new business, be sure to consider all of your options carefully. Most small business owners decide to form an LLC or a corporation.
5. File Business Formation Documents
To officially become a business owner in Alaska, you must file important business formation documents with the Secretary of State. This is also part of the business formation process when you must pay a filing fee to register your business with the state.
You can expect to have to complete the following documents, depending on your chosen business structure:
Articles of organization: if you’re forming an LLC, you’ll need to fill out articles of organization and provide foundational information about your LLC such as your business name and your Alaska registered agent’s address. This is the principal LLC formation document. It’s also known as a certificate of formation.
Articles of incorporation: this document is similar to articles of organization, but you’ll need to file it if you’re forming a corporation. It’s sometimes also referred to as a certificate of incorporation.
LLC operating agreement: this document outlines essential rules and regulations that govern your LLC and “may range from 12 to 16 pages in length.”[4] The State of Alaska doesn’t require LLCs to have an operating agreement. Still, you’ll likely need one to open a business bank account.
Corporate bylaws: bylaws are similar to an LLC operating agreement but apply to corporations. If you’re forming a corporation, you’re required to file corporate bylaws.
Business Name Registration Form: you need to submit this form if you’re applying for a DBA along with a $25 fee.
It’s essential to complete your formation documents accurately. Making a mistake on even one of these forms can result in losing liability protection or tax benefits. In the worst scenarios, you may even have to dissolve your business and start the business formation process from scratch.
We’re here to help. Swyft Filings has formed over 300,000 businesses since 2015 and can help you successfully file for an LLC, a C Corp, a DBA, or a nonprofit on the first try.
6. Apply for Alaska Business Licenses and Permits
After incorporation, your small business must obtain all applicable business licenses to start operating in Alaska. Depending on the type of business you run, you may be required to apply for business licenses and permits at a federal, state, and local level.
Federal Licenses
The federal government regulates specific business industries, such as alcoholic beverages and transportation. If your startup conducts business in one of these regulated industries, you’ll need to apply for a federal business license. To check if the federal government regulates your business industry, visit the Small Business Administration website.[5]
Remember that applying for a federal business license doesn’t fulfill state or local licensing requirements. For example, if you sell alcoholic beverages, you will likely face federal, state, and local requirements. You will need to obtain multiple licenses and permits.
State Licenses
Alaska requires all businesses (including sole proprietorships) to obtain a general Alaska business license from the Department of Commerce, Community, and Economic Development. You must get this license regardless of the type of business you’re forming. The license fee is $50 per year.
In addition to the general business license, you may also be required to obtain additional state licenses and permits depending on the nature of your business. For example, acupuncturists, hairdressers, and construction contractors must obtain an occupational license. You'll also need additional licensing if your company sells cigarettes and tobacco products.
→ For more information on state licensing requirements, see Department of Commerce's PDF resource.
Local Licenses
Your city, county, or local municipality most likely has additional licensing requirements for your new Alaska business. You may be required to get a general business license from your local government or get a zoning permit. Check with your local authorities for more information.
Obtaining all necessary business licenses before officially starting operating your business is essential. Conducting business without appropriate licenses and permits can result in fines and legal issues for your business.
As a busy entrepreneur, finding the time to research federal, state, and local license requirements can be tricky. Swyft Filings can investigate what business license and permits your Alaska business needs at a federal, state, and local level and swiftly file your applications with appropriate authorities.
7. File and Report Business Taxes
Running your own business means that you’re also responsible for paying your taxes. Your small business may have to file federal, state, and local taxes to the IRS. The requirements depend on your chosen business structure, location, and business activities.
Alaska doesn’t have a franchise task. It also doesn’t levy a sales tax, but your local government may require one. Anchorage and Fairbanks are two major municipalities that don’t levy a sales tax.
As a business owner, you must file your business taxes on time. Delays in filing or missed deadlines can cause serious consequences, so research your tax obligations.
8. Open a Business Bank Account
Opening a dedicated business bank account protects your assets, streamlines accounting, and simplifies the tax season. Business owners should also consider getting a business credit card if they decide to apply for funding and must show their business’s credit history.
Most banks require an employer identification number (EIN) to open a business account. It’s a tax ID number that works similarly to a social security number but for your business. You can apply for it on the internal revenue service’s website (IRS) or use Swyft Filings for a more straightforward process. An EIN is also sometimes called a federal employer identification number.
Take Your First Steps Toward Small Business Ownership
The Last Frontier is one of the most business-friendly states in the nation, and there are many opportunities for entrepreneurs to take advantage of.
To start a business in Alaska, you must undergo a business formation process. It starts with choosing a business idea for your startup. It ends with obtaining proper licenses, opening a business bank account, and clarifying your tax obligations.
The good news is that you don’t have to go through the business formation process alone. Swyft Filings can support you every step of the way, whether you’re forming an LLC, a corporation, or a nonprofit. Let us help you start operating in Alaska in no time.
Your Perfect Fit: Whether you're looking at a simple LLC or a dedicated nonprofit, we'll help you identify the best structure for your dream business.
Continued Support: Your entrepreneurial journey doesn’t stop at formation. Our key management services help ensure your business thrives.
Tailored Affordability: Get value-packed options suited to your business needs, starting at just $0 + state fees.
Frequently Asked Questions
Is Alaska a good place to start a business?
Alaska is a great place to start a small business. It has business-friendly tax laws, including no state-wide sales tax. It offers a lot of business resources to entrepreneurs. It also provides access to unique industries, such as agriculture and a growing tourism sector.
How much does it cost to start operating in Alaska?
Startup costs vary, but at the very least, you can expect to pay a business formation fee and a $50 general business license fee. You have to renew your business license every year.
Can I start a business in Alaska without a business plan?
It’s highly recommended to draft a business plan before you start a business in Alaska. It maximizes your chances of success and helps you understand your cash flow better.
What does Alaska require to start a business?
To start a business in Alaska, you must choose a business structure and file formation paperwork with the Secretary of State. You’ll also need to obtain appropriate business licenses, open a business bank account, and file taxes on time.
What is the process for starting a business in Alaska?
Once you decide on your business name and structure, you must file formation paperwork with the Secretary of State. To start operating your business, you must obtain a general business license and any other appropriate licenses or permits.
Why are most LLCs in Delaware?
Delaware is a business-friendly state that offers many advantages to entrepreneurs, such as no income tax. Learn more about starting an LLC in Delaware.
Bibliography
U.S. Small Business Administration. “Small Business Profile.” Accessed July 15, 2023.
Department of Commerce, Community, and Economic Development. “Selecting a Name for Your Business.” Accessed July 15, 2023.
Department of Commerce, Community, and Economic Development. “Reserve or Register a Business Name.” Accessed July 15, 2023.
Department of Commerce, Community, and Economic Development. “Establishing a Business in Alaska.”Accessed July 15, 2023.
U.S. Small Business Administration. “Apply for licenses and permits.” Accessed July 15, 2023.
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