How to Form a Professional Corporation in Alaska


Steve Bennett
Steve Bennett
Business Formation Expert
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Form a Professional Corporation in Alaska

Are you considering starting a professional corporation in Alaska? Congratulations! Establishing a professional corporation is an excellent choice for entrepreneurs and professionals alike who seek to benefit from a business structure that provides limited liability protection, tax advantages, and enhanced credibility. However, navigating the process of forming a professional corporation in Alaska can be daunting.

This article aims to provide a comprehensive guide on how to form a professional corporation in Alaska, covering everything from understanding the basics of this business entity to the essential steps and requirements you must comply with to launch your new venture successfully. Let’s dive in and explore the ins and outs of forming a professional corporation in Alaska!

What is a Professional Corporation in Alaska?

A professional service corporation (PSC), sometimes called a professional corporation (abbreviated as PC), is a type of organization authorized by state law to allow owners of particularly licensed professions in Alaska. The owner of a professional corporation is responsible for their own negligence or misconduct, but they are not held personally accountable for the actions of other owners. PC or P.C. is a regularly used abbreviation to identify professional corporations.

PCs and LLCs provide personal asset protection; that is, the personal assets are free from business debts. However, they do not have similar tax benefits. There is no secret formula as to which type of business structure is better than the other. It solely depends on the requirements of your business. However, forming an LLC is easier than setting up a PC in Alaska.

– LLCBuddy Editorial Team

Unlike other types of corporations, owners of Professional Corporations get two types of citizenship. One is where they incorporated the corporation, and the other is where they conduct the business. This benefit is not available for other types of corporations. You can form a free LLC in Alaska if you hire a professional service that provides LLC formation at $0.

How to Form a Professional Corporation in Alaska

To form a Professional Corporation for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Alaska, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

  • Doctors
  • Architects
  • Engineers
  • Accountants
  • Lawyers and others

You should be qualified to have a license to provide your service. In most cases, once you have graduated with your studies, passed the exam, and got your license, you may now form a professional corporation. However, if you work in an industry that doesn’t offer a license or professional certification, you should consider forming a corporation or limited liability company.

Step 2: Name your Professional Corporation in Alaska

After you have decided on the idea to form a professional corporation in Alaska, deciding the name for your corporation is significant. There is a complete guide on Alaska LLC name guidelines for you to have a proper business name. Here are some regulations you must follow while naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • No confusion with a government entity name.
  • A unique name is needed with no match
  • Limit of restricted words that need a license.

In Alaska, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. To keep the name, you must file a name reservation application with Alaska Secretary of State.

A professional corporation, professional association, service corporation, or professional service corporation must be present in the name if it doesn’t already. You might opt to register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). In this manner, you can choose any name you desire to run a clinic or law firm.

Step 3: Choose the Alaska Registered Agent

The next step in forming a professional corporation is hiring the Alaska Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Alaska. Forming a professional corporation for your service will be easier if you have Registered Agent in Alaska.

Alternatively, you can serve as your own Alaska Registered Agent if you have the time. However, you must stay compliant to avoid missing any important documents from Alaska.

Step 4: File the Articles of Incorporation in Alaska

After you hire a Alaska Registered Agent to form a professional corporation, the next step is to file the Alaska Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information should be written. You should also include the names of all co-owners. All owners have to prove they have the proper license to practice the specific profession they intend to.

Filing the Articles of Incorporation in Alaska may be done with two ways, online and by mail. The Articles of Incorporation fee may vary from different states. However, in Alaska, it costs $250 for filing online and by mail. Get the online form from Secretary of State, fill it up, and submit. Don’t refresh the page during the process. It will erase everything. . For offline filing, Send the form to State of Alaska Corporations Section, P.O. Box 110806, Juneau, AK 99811.

Step 5: Write an Operating Agreement in Alaska

An operating agreement is a document that contains all of your company’s organizational details. It is not required to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The Alaska operating agreement includes information like-

  1. About Business
  2. Members and management
  3. Capital contribution
  4. Profit Distribution
  5. Change of membership
  6. Dissolution

Step 6: Designate the PC Board of Directors in Alaska

The next step is to appoint the initial board of directors in your PC in Alaska. All the initial directors must submit their details to the owner. The owner must keep the records and submit them in accordance with the Alaska SOS. When writing the By-laws, as a shareholder and owner, you must make sure there is a point mentioned about appointing a new director later.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made.

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 8: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 9: Request an EIN in Alaska

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Alaska can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your professional corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 10: Open a Bank Account and Prepare for Taxes

Once you have filed and received your Employer Identification Number, you should open a bank account since you will use this account for yourself, your clients, and your employees.

Your business dealings in Alaska might be simpler by having a US business bank account because it boosts your company’s legitimacy and liquidity. For firms other than sole proprietorships, most banks demand an EIN to create a business bank account. Also, keeping separate finances helps you avoid combining personal and professional finances. Also, having an EIN makes tax preparation easier. With a professional corporation, you can anticipate paying employment and corporate taxes.

Step 11: Get a Business License in Alaska

Before your professional corporation operates in Alaska, you need to have a business license first. A business license is a formal document issued by the state government agency that allows you to operate your business in the geographic region that that agency governs. In Alaska, business license and permit costs depend on the business’s nature and type. You must check with the local authorities if any special licenses or city-based permits are needed.

Step 12: File Your Taxes in Alaska

Finally, you are down to the last step. After getting a business license and being ready to operate, do not forget to file your taxes first. You should start paying taxes quarterly as soon as possible to avoid a large tax bill. Each state has different tax requirements. Go through the Alaska classification of taxes for the taxes an LLC in Alaska has to pay.

Important Information

Maintaining Professional and Business License in Alaska

Now that you have established your professional corporation, you must maintain or renew your professional license every now and then. Even if your business is established but you don’t have a valid license to operate, your business is irrelevant. And, even if your professional license is still valid for a year or two, but your business license is already expired, it is still irrelevant.

Make time to check the status of your licenses at least once per year. Then, you can keep from missing anything significant. If there are any issues, you can address them.

Filing an Annual Report in Alaska

In Alaska, you will be required to submit a report each year. The owners’ and Registered Agent’s names and contact details are listed in the annual report. Also, it should include all of your yearly financial activity. You must submit one yearly in Alaska, and you can do it yourself or hire someone else to handle it. Everything must be precise and up to date.

Advantages of Forming a Professional Corporation in Alaska

A professional corporation takes a lot of time to process and pursue. However, with the help of the Alaska Registered Agent, everything will become easier. In fact, there are advantages that will help you form a professional corporation in Alaska.

  1. Limited Liability: The biggest advantage of setting up a professional corporation is that the owners are not held personally responsible for the debts and obligations of the company. This indicates that only the company’s assets will be confiscated to settle claims and creditors if the business is sued or declares bankruptcy. Additionally, this protection exempts corporate owners from being held accountable for other owners’ reckless or criminally negligent acts.
  1. Tax Deductions: Similar company expenses, such as employee fringe benefits, startup and operating costs, and equipment purchases, can be written off by professional companies in the same ways they can be for other kinds of firms. However, there are several tax deductions professional corporations can take advantage of that other types of businesses can’t. For example, the salaries and bonuses paid to owners and employees are tax-deductible.
  1. Retained Earnings: Professional corporations can keep a portion of their profits under the corporate tax system to grow their companies.

FAQs

What is a Professional Corporation in Alaska?
A professional corporation in Alaska is a business entity that allows professionals, such as attorneys, dentists, and physicians, to incorporate their practice to gain the advantages of operating as a corporation.
What are the benefits of forming a Professional Corporation in Alaska?
Forming a professional corporation in Alaska offers a number of benefits, including limited liability protection for the owners, the ability to attract investors, and more favorable tax treatment than a sole proprietorship or partnership.
What documents are required to form a Professional Corporation in Alaska?
The documents required to form a professional corporation in Alaska include an Articles of Incorporation, a Professional Corporation Registration, and a Certificate of Good Standing.
How do I file Articles of Incorporation for a Professional Corporation in Alaska?
To file Articles of Incorporation for a professional corporation in Alaska, you must submit the required documents and filing fee to the Division of Corporations, Business and Professional Licensing in the Alaska Department of Commerce, Community, and Economic Development.
What is the filing fee for forming a Professional Corporation in Alaska?
The filing fee for forming a professional corporation in Alaska is $250.
How long does it take to form a Professional Corporation in Alaska?
It typically takes between two to three weeks to form a professional corporation in Alaska.
Is there a legal requirement to have a corporate name for a Professional Corporation in Alaska?
Yes, all professional corporations in Alaska must have a corporate name that meets the naming requirements of the state. The name must include “Professional Corporation,” “P.C.,” or “PC” and must be distinguishable from other names on file with the state.
How do I register my Professional Corporation in Alaska?
To register your professional corporation in Alaska, you must submit the required documents and filing fee to the Division of Corporations, Business and Professional Licensing in the Alaska Department of Commerce, Community, and Economic Development.
Is an Alaska Professional Corporation required to have a registered agent?
Yes, all professional corporations in Alaska are required to have a registered agent. The registered agent must be a natural person, corporation, or other entity physically located in Alaska.
What other license or permits are required for a Professional Corporation in Alaska?
In addition to registering the professional corporation, you may need to obtain other licenses or permits depending on the type of business you are conducting. These may include a business license, health license, or other professional licenses.
What are the reporting requirements for a Professional Corporation in Alaska?
All professional corporations in Alaska are required to file a biennial report and pay a filing fee every two years. The biennial report must include information such as the name and address of the corporation, the names of officers and directors, and the mailing address of any shareholders.
What is the fee for filing a biennial report for a Professional Corporation in Alaska?
The fee for filing a biennial report for a professional corporation in Alaska is $50.
Are there any restrictions on ownership of a Professional Corporation in Alaska?
Yes, there are restrictions on ownership of a professional corporation in Alaska. Generally, only licensed professionals can own shares in the corporation, and there may be restrictions on the transfer of shares.
What are the tax implications of forming a Professional Corporation in Alaska?
Forming a professional corporation in Alaska may provide certain tax advantages, including the ability to deduct certain expenses and the ability to split income among shareholders. It is important to consult with a tax professional to determine the tax implications of forming a professional corporation in Alaska.
What is a professional corporation?
A professional corporation is a type of corporation in which members must be licensed to provide certain services, such as legal or medical services, in order to offer these services to the public.
Is forming a professional corporation in Alaska different than in other states?
Yes, each state has its own set of laws governing professional corporations, and Alaska is no exception. To form a professional corporation in Alaska, you must adhere to the state’s specific laws and regulations.
How do I form a professional corporation in Alaska?
To form a professional corporation in Alaska, you must file a Certificate of Formation with the Alaska Department of Commerce, Corporate and Professional Licensing. You will also need to register with the Alaska Department of Labor and Workforce Development and obtain any professional licenses or permits required by the state.
What documents do I need to form a professional corporation in Alaska?
To form a professional corporation in Alaska, you must prepare and submit a Certificate of Formation, Articles of Incorporation, and a Statement of Professional Corporation to the Alaska Department of Commerce, Corporate and Professional Licensing. You will also need to provide any professional licenses or permits required by the state.
How much does it cost to form a professional corporation in Alaska?
The cost of forming a professional corporation in Alaska varies depending on the type of professional corporation and the services you offer. Generally, the state filing fee for forming a professional corporation in Alaska is $100.
How long does it take to form a professional corporation in Alaska?
It typically takes two to four weeks to form a professional corporation in Alaska.
What are the benefits of forming a professional corporation in Alaska?
Forming a professional corporation in Alaska provides business owners with limited liability protection, which means that the owners’ personal assets are not at risk in the event that the business is sued. Additionally, a professional corporation in Alaska can help you establish a more professional presence in the marketplace and attract new clients.
Can I form a professional corporation in Alaska if I live outside of the state?
Yes, you can form a professional corporation in Alaska regardless of where you live. However, you must appoint a registered agent in the state who is authorized to receive service of process on behalf of the corporation.
What is a registered agent?
A registered agent is an individual or entity that is authorized to receive service of process on behalf of a corporation, such as a summons or complaint. In Alaska, a registered agent must have a physical address in the state.
Do I need a special license to form a professional corporation in Alaska?
Yes, you may need a special license or permit in order to form a professional corporation in Alaska. Depending on the services you offer, you may need a professional license from the state or a permit from a federal agency, such as the U.S. Department of Health and Human Services.
How often do I need to file reports with the Alaska Department of Commerce, Corporate and Professional Licensing?
You must file an annual report with the Alaska Department of Commerce, Corporate and Professional Licensing every year to keep your professional corporation in good standing.
What happens if I don’t file an annual report with the Alaska Department of Commerce, Corporate and Professional Licensing?
If you fail to file an annual report, your professional corporation may be administratively dissolved by the state.
Do I need to hold regular meetings for my professional corporation in Alaska?
Yes, you must hold regular meetings for your professional corporation in Alaska. You must also keep minutes of each meeting and document important decisions and actions taken by the corporation.
Are there any restrictions on how I can use the profits of my professional corporation in Alaska?
Yes, any profits generated by your professional corporation in Alaska must be used exclusively for the purpose of operating the business.
What are the tax implications of forming a professional corporation in Alaska?
Professional corporations in Alaska are subject to federal, state, and local taxes. Additionally, Alaska professional corporations must pay an annual corporate income tax and may be subject to other taxes, such as sales taxes.
What are the requirements for maintaining a professional corporation in Alaska?
In order to maintain a professional corporation in Alaska, you must file an annual report with the state, hold regular meetings, and document important decisions and actions taken by the corporation. Additionally, you must keep all required professional licenses and permits up to date.
Can I dissolve my professional corporation in Alaska?
Yes, you can dissolve your professional corporation in Alaska by filing a Certificate of Dissolution with the Alaska Department of Commerce, Corporate and Professional Licensing.
How long does it take to dissolve a professional corporation in Alaska?
It typically takes two to four weeks to dissolve a professional corporation in Alaska.

Also Read

Why Alaska Professional Corporation is So Important

Professional corporations are entities formed by professionals, such as doctors, lawyers, accountants, engineers, and architects, to conduct businesses and provide services in their respective fields. These corporations offer numerous benefits and advantages that make them essential to Alaska’s business landscape.

First and foremost, professional corporations provide a level of liability protection to their owners that is crucial in today’s litigious society. By operating as a corporation rather than as a sole proprietorship or partnership, professionals can protect their personal assets from the potential liabilities of their business operations. This protection is invaluable in safeguarding the financial well-being of professionals and their families, especially in high-risk industries.

Furthermore, professional corporations allow professionals to access various tax benefits and incentives that are not available to other types of businesses. By structuring their operations as a corporation, professionals can take advantage of deductions, credits, and other tax-saving strategies to reduce their overall tax burden. These tax benefits can result in significant savings for professionals and provide them with more resources to invest in their businesses or improve service delivery.

In addition to liability protection and tax advantages, professional corporations offer professionals the opportunity to attract investment and raise capital more effectively. By incorporating their businesses, professionals can issue shares of stock to investors, partners, or employees, raising capital to fund expansions, acquisitions, or research and development. This access to capital is critical for professionals looking to grow their businesses or take advantage of new opportunities in the market.

Moreover, professional corporations provide a level of professionalism and credibility to professionals that can enhance their reputation in the eyes of clients, customers, and partners. By operating under the umbrella of a corporation, professionals demonstrate a commitment to transparency, accountability, and ethical conduct in their business practices. This commitment can instill confidence and trust in stakeholders, leading to stronger relationships, more business opportunities, and increased growth.

Overall, professional corporations play a vital role in the success and sustainability of Alaska’s business community. These entities offer professionals the legal protection, tax advantages, capital access, and professional credibility they need to thrive in competitive markets and navigate challenging economic conditions. Without professional corporations, Alaska’s professionals would face unnecessary risks, challenges, and constraints that could hinder their ability to grow and prosper in the long run.

In conclusion, professional corporations are a cornerstone of Alaska’s business landscape and a key driver of its economic growth and prosperity. By supporting professionals in their respective fields, these entities contribute to the overall well-being and vitality of Alaska’s economy, ensuring that the Last Frontier remains a vibrant and dynamic place for businesses to flourish.

Conclusion

In forming a professional corporation in Alaska, having someone to help you build it is not necessary but suggestible. Even though it is easy because of the listed benefits and advantages above, forming your group of professional individuals will make it somehow successful. Just make sure to be guided by the steps and ensure that every one of the details and records is accurate and precise. And if you have any questions, share them in the comment section below.

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