Get all of the information you need to start and run a small business.
Here's an overview of the key steps you'll need to take to start your own business in Alaska.
Take some time to explore and research ideas for your business. At this stage, consider your own interests, skills, resources, availability, and the reasons you want to form a business. You should also consider the likelihood of success based on the interests and needs of your community. Read our article for more tips on how to evaluate business ideas.
After you select an idea, consider drafting a business plan to evaluate your chances of making a profit. When you create a plan, you will have a better idea of the startup costs, your competition, and strategies for making money. Typically, investors and lenders will ask to review your business plan before providing financial assistance. To learn more about the benefits of business plans and how to create one for your enterprise see Why You Need to Write a Business Plan.
The most common legal structures for a small business are:
There also are special versions of some of these structures, such as limited partnerships and S corporations. You'll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Read our article for information on how to choose the best ownership structure for your business.
For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the Alaska Division of Corporations, Business and Professional Licensing (CBPL). You can check for available names doing a business entity search on the CBPL website. You can reserve an available name for up to 120 days by filing a Business Name Reservation with the CBPL. There are also certain name requirements for LLCs and corporations (like including a word such as "L.L.C." for LLCs or "Company" for corporations). See How to Form an LLC in Alaska and How to Form a Corporation for more information.
If you plan on doing business online, you may want to register your business name as a domain name. See Choose and Register a Domain Name for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See How to Do a Trademark Search for more information.
Tax Registration. Alaska does not have a state sales tax or a personal income tax on wages so there is no issue of registering for those types of taxes. Be aware, however, that individual Alaska municipalities may charge sales tax.
EIN. If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business's name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application. There is no filing fee.
Regulatory licenses and permits. These cover areas such as:
Most Alaska businesses are required to have a state business license. The license is issued by the CBPL. You have the option to pay for either a one-year or two-year business license. For more information, check the New BL Online section of the CBPL website. Other state agencies issue permits for matters relating to, for example, the environment or health and safety. If you think one of these kinds of permits might apply to your business, check the websites of the Division of Environmental Health, Department of Environmental Conservation, and other state agencies. For information about local licenses and permits, check the websites for any cities or counties where you will do business.
Professional and occupational licenses. These cover people who work in various fields. The Professional Licensing section of the CBPL website lists most of the professions requiring state licensing.
You'll need to pick a location for your business and check local zoning regulations. Before you commit to a location, take time to calculate the costs of running your business in the desired spot, including rent and utilities. You can refer back to your business plan to evaluate whether you can afford your desired location during your company's early months.
It is important to verify that the spot is zoned for your type of business. You might find zoning regulations for your town or city by reviewing your local ordinances and contacting your town's zoning or planning department. Read our article for more tips on picking a location.
One alternative to opening your business at a new location is running your company out of your home. If you decide to run a home-based business, again check your local zoning laws. In addition, review your lease (if you rent your home) and homeowners association rules (if applicable), either of which might ban some or all home businesses.
Alaska is like most states in that it has a corporate income tax, but unlike many states, it does not have any franchise or privilege tax generally applicable to businesses. Moreover, Alaska does not have a personal income tax. See Alaska State Business Income Tax for more information on state business taxes in Alaska.
Sole proprietorships. Sole proprietorships only pay federal taxes on business income.
Partnerships. Typical partnerships only pay federal taxes on business income.
LLCs. For typical LLCs, LLC members only pay federal taxes on business income. In addition, the LLC itself must file a biennial report with the CBPL. See Alaska LLC Annual Report and Tax Requirements for more information.
Corporations. Alaska corporations must pay the state's corporation income tax. Individual shareholders must pay federal taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay federal income tax on his or her individual federal tax return. In addition, corporations must file a biennial report with the CBPL.
Business insurance can protect your company and your personal assets from the fallout of unexpected disasters, such as personal injury lawsuits or natural catastrophes. An insurance agent can help you explore the different coverage options, which might include general liability insurance to protect your business against claims relating to bodily injury or property damage. To learn more, see Nolo's article, What Types of Insurances Does Your Small Business Need?
No matter the type of business you form, you should consider opening a separate business account to make it easier to track your income and expenses. For some business types, like LLCs and corporations, a separate bank account is necessary to maintain your liability protection. To learn more, see Opening a Business Bank Account.