If you own a business that was created in a state other than Alaska, you will need to qualify or register that business in Alaska if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Alaska) limited liability company (LLC) to do business in Alaska.
For Alaska purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Alaska. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Arizona is a foreign LLC in Colorado.
According to Alaska’s LLC Act, you are required to register your foreign company with the state of Alaska if you are “conducting affairs” in Alaska.(Other states use the terms “transacting business” or “doing business.”) What does this mean? Well, like most states, Alaska’s LLC Act does not specifically define the phrase “conducting affairs” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Alaska’s LLC Act specifies certain activities that do not constitute conducting affairs in the state. The items listed include:
For the full, legal description of each of the listed items, check Section 10.50.720 of the Alaska Statutes. If your LLC’s only activity in Alaska is one or more of the listed items, you should not need to register with the state.
To register your business in Alaska, you must file a Certificate of Registration with the Corporations Section of the Alaska Division of Corporations, Business and Professional Licensing. You can download a copy of the registration form from the Corporations Section website.
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state.More specifically, for an Alaska application for registration, you need to provide:
Include the contact information sheet with your filing (it’s part of the downloadable registration form). You can file by mail or online. The filing fee is $350.
If your LLC transacts business in Alaska without authority, it cannot bring a lawsuit in any of the state’s courts. In addition, the LLC is liable for the fees that should have been paid if the LLC had properly registered and civil penalties up to $10,000 per year. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in the Alaska. Also, a member of the LLC is not liable for the LLC’s debts and obligations solely because the company transacted business in Alaska without registration.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Alaska are similar. You will, however, have to use a different application form.See the Corporations Section website for forms, information, and filing instructions for registering a foreign corporation in Alaska.