In Alaska, you may incorporate a S corporation (S corp) by founding a limited liability company (LLC) or a corporation, then choosing S corp status from the IRS when you file for your EIN.
An S corporation is a tax categorization, not a company structure, according to the IRS. The S corp classification is used to lower a company’s tax burden.
Table of Contents
Considerations Before Forming a S Corp
You must examine the following things before founding a S corporation:
Is a S corporation the best option for your company?
S corporation limitations
Why is an LLC the ideal structure for the S corporation tax status?
Are the tax benefits of a S corporation good for you?
Is a S Corporation the Best Business Structure for You?
Restrictions on S Corporations
S corporations are restricted to one class of stock and 100 stockholders, among other things. For more information, see our What Is a S Corporation?
Why is an LLC the best structure for S Corporation tax status?
As entrepreneurs, we feel that incorporating a S corporation via an LLC is the best option since the benefits of founding a corporation are offset by S corp limitations. LLCs are also less difficult to manage than corporations.
Are S Corporation Tax Benefits Right for You?
You must determine if the S corp tax status is preferable to the default LLC tax status for your company.
How to Form a S Corporation
There are two major methods to form a S corporation:
When requesting your employee identification number, organize an LLC and obtain S corp tax status from the IRS (EIN)
By creating a company and applying to the IRS for S corp status
We do not advocate forming a company with the S corp tax status since it undermines all of the advantages of forming a corporation.
Forming an LLC and Choosing S Corp Status in Alaska
Step 1: Give Your LLC a Name
Step 2: Select a Registered Agent.
Step 3: Submit the Articles of Incorporation.
Create an Operating Agreement in Step 4
Step 5: Obtain an EIN and submit Form 2553 to elect S Corporation tax status.
Step 1: Give Your LLC a Name
The first and most significant step in forming an LLC in Alaska is deciding on a name.
Make certain that the name you chose conforms with Alaska’s naming regulations and is readily searched by prospective customers.
1. Follow the Alaska LLC naming guidelines:
The word “limited liability corporation” or one of its acronyms must be in your name (LLC or L.L.C.). “Limited” is shortened as “Ltd.,” while “business” is abbreviated as “co.”
Your LLC’s name cannot include terms that may be confused with a government organization or unit (FBI, Treasury, State Department, etc.).
Unless the company has the proper professional license, a business name may not include a term with professional licensing requirements, such as “Engineer.”
Entity names that mislead about corporate aims are not permitted. If you operate an oil firm, you couldn’t call your company “Solar Power Visionaries, LLC.”
An LLC’s name may include the name of a city, borough, or town; but, the name may not contain the words “city,” “borough,” or “village,” or otherwise indicate that the business is a municipality.
2. Does the name exist in Alaska? To determine whether your chosen LLC name is available, visit the Alaska Department of Commerce, Community, and Economic Development website and search the companies database.
3. Is the URL accessible?
We suggest that you check to see whether your company’s name is accessible as a web domain. Even if you don’t intend to construct a company website right away, you may want to purchase the URL to prevent others from gaining it.
Step 2: Select an Alaska Registered Agent
Your Alaska LLC must have a registered agent.
A registered agent for your LLC will accept legal papers and tax notifications on your behalf. When you submit your LLC’s Articles of Organization, you will name your registered agent.
Many company owners opt to use the services of a registered agent. Many of these firms will incorporate your LLC for a modest price and provide free registered agent services for the first year.
Step 3: Fill out and submit the Alaska LLC Articles of Organization.
To properly register an LLC, the Alaska Articles of Organization are utilized.
Step 4: Draft an Operating Agreement for your LLC.
An LLC operating agreement is a legal document that defines your LLC’s ownership and member responsibilities.
Step 5: Apply for an EIN and fill out Form 2553 on the IRS website.
An EIN is a number assigned by the US Internal Revenue Service (IRS) to companies in order to identify and tax them. It is basically a business’s Social Security number.
When you apply directly with the IRS, EINs are free.
Select S Corporation Tax Status
The IRS will give a link to Form 2553, the Election by a Small Business form, during the online EIN application process.
For full assistance with completing the form, please see our Form 2553 Instructions page.
This is the form to use if you want to elect S corp tax status for your LLC: