Corporations Exemption FAQs Generally, the State of Alaska requires the following: STEP #1: Professional Licensing Section Individual Professional License (if applicable) — Issued by the State of Alaska. For more information go to ProfessionalLicensing.Alaska.Gov and select the appropriate professional license program. Entity Professional License for Corporations, LLCs, LLPs, LPs (if applicable) — Issued by the State of Alaska. NOTE: This may require Step #2 to be completed prior to professional licensing. For more information go to ProfessionalLicensing.Alaska.Gov and select the appropriate professional license program. IMPORTANT: exemptions under Professional Licensing Statutes do not apply to entity registration with the Corporations Section or business licensing with the Business License Section STEP #2 Corporations Section Corporation/entity registration with the State of Alaska (if applicable) — Issued by the State of Alaska. For more information go to www.Corporations.Alaska.Gov IMPORTANT: exemptions under Corporations Statutes do not apply to professional licensing with the Professional Licensing Statutes or business licensing with the Business License Section. STEP #3 Business Licensing Section Business License(s) — Issued by the State of Alaska. For more information go to www.BusinessLicense.Alaska.Gov IMPORTANT: exemptions under Business Licensing Statutes do not apply to entity registration with the Corporations Section or professional licensing with the Professional Licensing Statutes . For more information on how to get started with this Division, go to: How to Get Licensed 1. What is the difference between “unincorporated” and “incorporated”? Which sections do they register with? There are two classes of businesses: unincorporated and incorporated. An unincorporated business (such as a sole proprietor or partnership) has not been granted formal corporate status by the state and is simply an extension of its owners. Unincorporated business owners control the finances of the business and are generally personally liable for the business’s profits, losses, lawsuits and liabilities. Unincorporated businesses may do STEP #1 and STEP #3 above. Unincorporated businesses do not do STEP #2 above. An incorporated entity (such as business corporation, LLC, LLP, LP, etc.) is an independent legal entity, which exists separately from its owners. Generally an incorporated business is held accountable for the corporation’s profits, losses, lawsuits and liabilities. Incorporated entities may do STEP #1, STEP #2, and STEP #3 above. For more information about the different types of businesses, go to: Business Structure FAQs NOTE: for federal tax purposes, the Internal Revenue Service has separate entity classification rules pertaining to unincorporated businesses and incorporated entities; for more information go to: IRS 2. CORPORATIONS SECTION: Does a domestic (Alaskan) entity have to register with the Corporations Section? Yes. For more information go to Corporations Statutes and look up your specific entity type. 3. CORPORATION SECTION: are there domestic (Alaskan) entity registration exemptions? No. For more information go to Corporations Statutes and look up your specific entity type. 4. CORPORATIONS SECTION: Does a foreign (non-Alaskan) entity have to register with the Corporations Section? Yes. Under Corporations Statutes (law), a foreign (non-Alaskan) entity may not transact business in this state until it has authority through the registration of the entity with the Corporations Section and obtained an Alaska Entity Number. Generally, a company is transacting business in this state if it has sales, or payroll, and real or personal property in this state. However, it is the responsibility of the foreign entity or its legal counsel to determine whether it must obtain authority; the Division does not render legal opinions in this matter. An out of state company that transacts business in Alaska without authority may be liable for the years or portions of years during which it transacts business in this state without authority. That liability may be equal to all fees and taxes that would have been imposed, plus penalties. In most cases, an out of state company that transacts business in this state without authority may not maintain an action, suit, or proceeding in a court of this state until it obtains authority. For more information go to Corporations Statutes and look up your specific entity type. 5. CORPORATION SECTION: are there foreign (non-Alaskan) entity registration exemptions? Per Corporations Statutes (law) foreign (non-Alaskan) entities (business corporations, non-profit corporations, LLC, or LLP) may be exempt from registration with the Corporations Section of this division. Exemptions under Corporations Statutes only apply to foreign entity registration with the Corporations Section and are not exemptions from business licensing requirements with the Business License Section under AS 43.70 or professional licensing with the Professional Licensing Section The few Corporation statutory foreign entity registration exemptions are based upon entity type: Foreign Business Corporation Foreign Business Corporation: AS 10.06.718. Activities not constituting transacting business in this state. Without excluding other activities that may not constitute transacting business in this state, a foreign corporation is not considered to be transacting business in this state, for the purposes of this chapter, by reason of carrying on in this state any one or more of the following activities: maintaining, defending, or settling an action, suit, or administrative or arbitration proceeding, or the settlement of claims or disputes; holding meetings of directors or shareholders of the corporation, or carrying on other activities concerning the internal affairs of the corporation; maintaining bank accounts; maintaining an office or agency for the transfer, exchange, and registration of securities of the corporation, or appointing and maintaining a trustee or depositary for the securities of the corporation; making sales through independent contractors; soliciting or procuring orders by mail, through employees, agents, or otherwise, if the orders require acceptance outside the state before becoming binding contracts; creating, as borrower or lender, or acquiring indebtedness or mortgages or other security interests in real or personal property; securing or collecting debts, or enforcing rights in property securing debts; transacting business in interstate commerce; conducting an isolated [meaning one] transaction completed within a period of 30 days not in the course of a number of repeated transactions of like nature. Foreign Non-Profit Corporation Foreign Non-Profit Corporation: AS 10.20.460. Activities not constituting transacting business in the state. Without excluding other activities which may not constitute transacting business in the state, a foreign corporation does not transact business in the state by carrying on any of the following activities: maintaining or defending any action or suit or an administrative or arbitration proceeding, or effecting its settlement or the settlement of claims or disputes; holding meetings of its directors, shareholders, or members or carrying on other activities concerning its internal affairs; maintaining bank accounts; securing or collecting debts, or enforcing rights in property securing debts; transacting business in interstate commerce; granting funds; distributing information to members; conducting an isolated [meaning one] transaction completed within a period of 30 days not in the course of a number of repeated transactions of like nature. Foreign Limited Liability Company (LLC) Foreign Limited Liability Company (LLC): AS 10.50.720. Transactions not constituting conducting affairs. The activities of a foreign limited liability company that are not considered to be conducting affairs in this state for the purposes of AS 10.50.600 - 10.50.720 include: maintaining, defending, or settling a court action or other proceeding or a claim; holding meetings of the members or managers of the company; maintaining bank accounts; selling through independent contractors; soliciting or procuring orders by mail, through employees, agents, or otherwise, if the orders require acceptance outside the state before becoming binding contracts; creating as borrower or lender, or acquiring, indebtedness or mortgages or other security interests in real or personal property; securing or collecting debts, or enforcing rights in property securing debts; conducting an isolated [meaning one] transaction that is completed within 30 days and that is not part of a course of repeated transactions of a similar nature; or conducting affairs in interstate commerce. Foreign Limited Liability Partnership (LLP) Foreign Limited Liability Partnership (LLP): 32.06.924. Activities not constituting transacting business. (a) Activities of a foreign limited liability partnership that do not constitute transacting business under AS 32.06.921 - 32.06.925 include: maintaining, defending, or settling an action or proceeding; holding meetings of its partners or carrying on another activity concerning its internal affairs; maintaining bank accounts; maintaining offices or agencies for the transfer, exchange, and registration of the partnership's own securities or maintaining trustees or depositories for those securities; selling through independent contractors; soliciting or obtaining orders, whether by mail or through employees or agents or by another method, if the orders require acceptance outside this state before they become contracts; creating or acquiring indebtedness, with or without a mortgage, or other security interest in property; collecting debts or foreclosing mortgages or other security interests in property securing the debts, and holding, protecting, and maintaining property so acquired; conducting an isolated transaction that is completed within 30 days and is not one transaction in the course of similar transactions; and transacting business in interstate commerce. In AS 32.06.921 - 32.06.925, the ownership in this state of income-producing real property or tangible personal property, other than property excluded under (a) of this section, constitutes transacting business in this state. This section does not apply in determining the contacts or activities that may subject a foreign limited liability partnership to service of process, taxation, or regulation under another law of this state. NOTE: foreign entity registration exemption may exist under Corporations Statutes but may not exist under other program or agency statutes. For example: procurement statutory requirements, professional licensing requirements, grant programs, other businesses, local government, and federal government requirements. 6. BUSINESS LICENSING SECTION: do I have to have an Alaska Business License? Per AS 43.70.020(a) a business license is required for the privilege of engaging in a business in the State of Alaska. Per AS 43.70.110(1) “Business” means a for-profit or non-profit entity engaging or offering to engage in a trade, a service, a profession, or an activity with the goal of receiving a financial benefit in exchange for the provision of services, or goods, or other property. Per AS 43.70.020(f) a business license may cover multiple lines of business, which are based upon your business activities and NAICS codes. For more information go to: Multiple Lines of Business FAQs For more information, go to: Business Licensing FAQs Business Licensing Statutes and Regulations 7. BUSINESS LICENSING SECTION: what are the business licensing exemptions? Exemptions under Business Licensing Statutes only apply to business licensing and are not exemptions from entity registrations with the Corporations Section or professional licensing with the Professional Licensing Section Per Business Licensing Statutes (law) AS 43.70.105 there are a few exemptions for business licensing, if your activities are limited to the below licenses: a fisheries business For information regarding a Fisheries Business License, Direct Market License, Salmon Enhancement Tax, and Surety Bonding contact the Alaska Dept. of Revenue. For information regarding Limited Entry Permits, Interim-Use Permits, Commercial Vessel Licenses, and Crewmember Licenses please contact the Alaska Dept. of Fish and Game. the sale of liquor under a license issued under AS 04.11. For information regarding liquor licenses and the Alaska Beverages Surety Bond contact the Marijuana Control Office. an insurance business For information regarding insurance producers licensing and insurance company licensing requirements contact the Alaska Dept. of Commerce, Community, and Economic Development, Division of Insurance . a mining business For information regarding an Alaska Mining License contact the Alaska Dept. of Revenue. supplying services as an employee For information regarding who is an “employee” contact the IRS and/or the Alaska Dept. of Labor . furnishing goods or services by a person who does not represent to be regularly engaged in furnishing goods or services. the activities of an investment club. An investment club is a group of individuals, incorporated or otherwise organized, that engages primarily in investing in securities, that does not sell investment services to another person, that does not advertise, the primary purpose of which is educational. a bank organized under AS 06.05 or the laws of another state. a national bank chartered by the United States. a credit union organized under AS 06.45 or the laws of another state. a credit union regulated by the National Credit Union Administration. a mutual savings bank chartered under AS 06.15 or organized under the laws of another state. For information regarding the regulation and licensing requirements of 8-12 above, please contact the Alaska Dept. of Commerce, Community, and Economic Development, Banking and Securities. IMPORTANT: If your business activities extend beyond the above exceptions, then you must have a business license. Example: Exemption for the sale of liquor is only for the sale of liquor. If you sell anything else (such as non-alcoholic mixes or beverages, ice, cups, etc.), then you must have a business license. NOTE: business licensing exemption may exist under Business Licensing Statutes but may not exist under other program or agency statutes. For example: procurement statutory requirements , professional licensing requirements, grant programs, other businesses, local government, and federal government requirements. 8. HOW TO APPLY FOR A BUSINESS LICENSE WITH AN ENTITY REGISTRATION EXEMPTION REQUEST: I need a business license; however, I believe my foreign (non-Alaskan) entity may be exempt from registration under Corporation Statutes . How do I apply for an Alaska Business License? IF, after reviewing the above information and links, you believe your foreign (non-Alaskan) entity MAY BE exempt from registering with the Corporations Section THEN: You must apply for a business license hardcopy (in-person, fax, or US Mail) for your application to be reviewed by a Business License Examiner to determine qualification for foreign entity registration exemption. Include a letter, on letterhead, explaining the following: You are requesting exemption from foreign entity registration under Corporation Statutes; Describe your business activities; For example: XYZ Incorporated, a filming company for Flower & Fauna Society. Reference the very specific Corporation Statute exemption, based on your entity type (see above), that you believe you may qualify for; For example: AS 10.06.718(10) an isolated (single) transaction completed within 30 days. . Explain how your business activities very specifically relate to the specific corporation exemption you are seeking (how does “b” apply to “c”); For example: XYZ Incorporated, a filming company for Flower & Fauna Society, will be coming once into Alaska for 10 consecutive days, July 1-10, to film flower and fauna next to oil rigs in Prudhoe Bay. Any other information relevant to the statutes and the exemption you are seeking. For example: XYZ Incorporated is only applying for a one year business license with no intention of renewing, since this will be an isolated (single) trip to Alaska and completed in less than 30 consecutive days. In addition, at the completion of this isolated trip of less than 30 consecutive days to Alaska, XYZ Incorporated will submit Business License: Request to Cancel or Inactivate (form 08-4732) to cancel its business license. IMPORTANT - Processing time for hardcopy filings: Standard processing time from March-September is 10-15 business days. During heavy renewal and filing seasons, October-February, the processing time will be delayed. We do not offer expediting services. Once your application has been reviewed: IF the application is complete, compliant, AND qualifies for entity exemption THEN the business license will be issued. (Tip: watch online and print your business license as soon as it is issued.) IF the application is denied you will be sent a problem letter via U.S. Mail. 9. I CANNOT WAIT FOR THE PROCESSING TIME FOR A HARDCOPY BUSINESS LICENSE APPLICATION WITH ENTITY EXEMPTION. HOW CAN I GET AN ALASKA BUSINESS LICENSE FASTER? Processing time for hardcopy filings: March-September: standard processing time is 10-15 business days. October-February: is heavy filing season and there will be significant delays in processing time. We do not offer expediting services. IF you need a business license sooner than our hardcopy processing time: THEN you may choose to NOT seek entity exemption AND instead apply online for immediate entity registration with the Corporations Section and then apply online for immediate business licensing with the Business Licensing Section. For more information go to HOW TO GET LICENSED. It is up to you to determine which processing timeframe best meets your business needs: hardcopy application process time; or online immediate filing. This Division does not provide legal advice. The information contained within these webpages is provided for your convenience and is not to be interpreted as legal advice. It is your responsibility to know what your registering, reporting and filing requirements are based on your specific business activities. Not knowing what is expected of you may not preclude you from the legal obligation to meet these requirements and compliance with the law. You are encouraged to seek the advice of a professional, such as a Certified Public Accountant (CPA) and/or Attorney if you need additional assistance. Contact Us When contacting this office, please direct your questions to the appropriate Section: Corporations, Professional Licensing, or Business Licensing. Each Section specializes in its own requirements per Alaska statutes and regulations. Professional Licensing Section Email: License@Alaska.Gov Corporations Section Email: Corporations@Alaska.Gov Business Licensing Section Email: BusinessLicense@Alaska.Gov