How to Start a Noprofit in Alaska

1. Choose a name to represent your organization

Starting a non-profit organization in Alaska requires many steps. First, you must decide whether to exclude a for-profit entity. Next, you will need to name your non-profit corporation. Names for nonprofits must be consistent with Alaska’s naming requirements. They should also be searchable by potential donors or members.

The name of your non-profit must also meet these requirements:

• Names for nonprofits must include the correct designation, such as unincorporated or corporation.
• It shouldn’t contain any words that could be considered illegal under local laws.
• If your organization holds the appropriate license, it should not include words such as “engineer”.
• Your nonprofit’s name should not be used to suggest it was created for something other than the purpose described in its Articles of Incorporation.
• Must be distinguished from other businesses in the state

The Department of Commerce has published guidelines for naming an Alaska nonprofit. You can check the availability of your name by visiting the Alaska Secretary of State or the State of Alaska website to perform a name search.

2. Nominate an Alaska registered agent

Each Alaska nonprofit organization must have an Alaska registered agent.

A registered agent, also known as a resident or statutory agent, is a business entity responsible for receiving or accepting important legal documentation on behalf of your nonprofit.

The designated person is ultimately the point of contact for the nonprofit with the state. These are the requirements for an Alaska registered agent:

• You must be an Alaska resident or registered agent service.
• You must be at least 18 years old
• You must have an Alaska street or physical address
• To receive legal documents for the nonprofit, they must be available during regular office hours.

Any member of the organization can be elected to serve as Alaska resident agent. This includes you.

3. Recruit your board members

Board members are needed for the Alaska nonprofit. The Alaska board must include:

Minimum three directors that are not related

• Secretary
• Treasurer
• President
• Vice-president

The Board of Directors, also known as the Alaska Nonprofit Board of Directors, plays a critical role in the success of the Alaskan nonprofit. The board has the following responsibilities:

• Recognize and resolve conflicts of interest
• Maintaining a positive public image
• Maintaining the organization’s operations at the top of the board
• Generating funds/Maintaining financial stability
• Distributing funds in a responsible and consistent manner with the purpose of the nonprofit
• Recruiting new members
• Supporting the mission of the non-profit

4. Consent to Conflict of Interest Policy and bylaws

Every non-profit organization must adopt bylaws as well as a conflict of interest policy.

These bylaws outline the procedures and rules the nonprofit will use to hold board meetings, elect officers and directors, and take care of any other corporate formalities required by the state.

The conflict of interests policy is a set of rules that ensures that decisions made by the Board of Directors are in the best interest of the organization and not individual members.

The state does not require a copy of the conflict of interest policy and bylaws. It is recommended that you keep a copy of the bylaws and conflict of interest policy on file. This will be used as an internal operating manual for your nonprofit.

5. Choose an Alaskan nonprofit corporation structure

These are just a few examples of Alaska’s many types of non-profit organizational structures:

• Mutual benefit corporation: This type of non-profit corporation is similar to mutual benefit corporations found under common law countries. These corporations can or not choose to be exempt from tax by the IRS and state.
• Public benefit corporations: Public benefits NPOs were created to support charity and serve as a civic league, or other social welfare organization. Public benefit corporations are religious and charitable organizations that aim to generate public and/or social good.
• Mutual Benefit Common Interest Development Corporations: These nonprofit organizations were created under the Davis Stirling Common Interest Development Act in order to manage common interest development, such as homeowner’s associations.
• Religious organizations/corporations: These nonprofits are solely for religious purposes, such as a church.

6. File and prepare nonprofit Articles of Incorporation

Each Alaska nonprofit must file Articles of Incorporation. The Articles of Incorporation are required to record the date and place of creation of the nonprofit and to make note of any other important information necessary to confirm its existence.

To be eligible for tax-exempt status in Alaska for a nonprofit, your Articles of Incorporation should state the following:

1. Purpose
   

The purpose of an Alaska nonprofit must be restricted to one or more of the following:

• Charitable
• Scientific
• Religious
• Education
• Literary
• Prevention of cruelty to children or animals
• Encouragement of amateur sports competitions at the national and international levels
• Public safety testing

1. Dissolution
   

It is important to state the purpose of the assets and what happens to them if the organization dissolves.

To be tax-exempt in Alaska, assets must only be used to fulfill the requirements of section 501c3.

The Articles of Incorporation may also contain provisions that limit the director’s personal liability for monetary damages due to breach of fiduciary duty.

The articles of incorporation can be filed online or via mail to the address below:

Section State of Alaska Corporations

P.O. P.O. Box 110806

Juneau (AK 99811-0806)

Two copies of the Articles of incorporation will be required. The commissioner will stamp the first copy as “filed” on the date it was filed. This copy is kept in their office. The second copy of the certificate will be attached to it and returned to you at a later time.

7. Send an initial report

An initial report will be required by the Alaska nonprofit. The report must be filed with the Alaska Division for Corporations, Business, and Professional Licensing.

You must file your initial report within six months after incorporation.

8. Get an EIN (Employer Identification number)

The EIN, or Employer Identification Number, is also known as a Federal Tax ID Number. It is used to identify a business entity. It is your nonprofit’s Social Security Number.

No matter if you intend to hire employees, the Alaska nonprofit EIN must be obtained. An EIN has many benefits:

• Used for Federal and State tax purposes (990 Returns).
• Employing employees
• Opening a bank account for your business

To apply, use IRS Form SS-4. The form can be submitted online , or by mail. You will receive your EIN instantly if you submit the form online. This IRS EIN guide provides additional guidance for understanding and obtaining an EIN.

9. For federal tax exemption, apply

Applying to the IRS is required in order to obtain federal tax status. To be eligible for federal tax status, you must form your nonprofit according to IRS requirements.

The Internal Revenue Service recognizes more than 20 types of exempt nonprofits. Most of these are private 501(c),(3) status for private or public charities.

Let’s say you want to become a tax-exempt 501 C3 organization. In this case, your Articles of Incorporation should contain specific language that the IRS requires. This basically means that your organization’s activities will be limited to one or two recognized exempt purposes.

Federal income tax exemptions mean that you will not have to pay Alaska state income taxes. If your nonprofit is solely used for charitable, religious, or hospital purposes, you may be eligible for Alaska property tax exempt. Alaskan nonprofits are exempt from state sales tax.

Before you apply for Alaska federal tax exemption, make sure your non-profit meets these requirements:

• Have an EIN
• Have at least three directors
• Already filed Articles of Incorporation
• Adopted conflict of interest and bylaws

To apply for federal tax exemption, file Form1023 to the Internal Revenue Code or Formula 1023-EZ to a small nonprofit. On the IRS website, you can find instructions for filling out these forms.

After reviewing your application, the IRS will issue a determination letter. If your application is approved, it will be reviewed by the IRS. Your determination letter will clearly state that your Alaska nonprofit is exempted from federal taxes under Section 501c3.

10. Apply for Alaska state tax exemption

Alaska nonprofits who have received an IRS determination letter exempting them from federal taxes need not apply for state tax exemption.

Alaska doesn’t have a sales tax at the state level. You can find more information at the State of Alaska Department of Revenue.

11. Additional licenses and permits may also be required

Alaska Department of Revenue – Charitable Gaming Rules are mandatory for non-profits when they host lotteries and raffles or bingo games.

Additional reporting and state registration requirements

The laws governing charitable solicitation and fundraising activities vary from one state to another.

For information on fundraising and registration requirements, visit the Alaska Attorney General’s website or the Alaska Department of Law Consumer Protection Unit.

For further guidance, you can also refer to the IRS Compliance Manual if your nonprofit is looking to raise funds or consider fiscal sponsorship.

12. Send an annual report

To maintain good standing with IRS, Alaska nonprofits must file a biennial report every year no later than July 2. These are the contents of the biennial report:

• Name of a non-profit
• Name of the process agent/registered agent
• Names and addresses of all board members

How much does it cost to start a nonprofit in Alaska?

• Alaska Articles of Incorporation: $50
• Alaska business license: $50
• Application for 501 (c)3 tax-exemption : $275 or $600 IRS Fee
• Alaska Charitable Registration: $40

Pay.gov is the only way to make payments

Next steps

There are some steps you need to take after you have started your nonprofit. Let’s take a closer at them.

Open a bank account for your business

• Keep your accounting records and file taxes
• Make sure that your personal assets and those of your non-profits are kept apart

You will need the following information to open a bank account:

• Your EIN
• A copy of the articles of incorporation
• A copy of the bylaws for your organization.

Find a business accountant

• Bookkeeping and payroll can be simplified
• Avoid tax and penalty errors for your nonprofit
• Manage the funding of your nonprofit

Get insurance

• Your nonprofit’s growth is your priority
• Manage risks

You can choose General liability, Personal liability, or Worker’s Compensation insurance.

Create a website

You may wish to establish a website to help your business gain credibility and legitimacy. A website dedicated to your nonprofit is a great way to communicate the vision, mission, story, and values of your organization with supporters. It’s also a great place to announce future events and goals.

Sign legal documents

Signing legal documents in your personal capacity, rather than as an authorized representative for your nonprofit, is one aspect that often gets overlooked.

These tips can help you avoid personal liability if you have been appointed as a registered agent for the nonprofit.

• Indicate the registered name of your non-profit
• Sign your name and signature
• As the authorized representative of the organization, state your position/role

It is important to sign legal documents for the nonprofit in your capacity of registered agent and not as an individual.

Resources and Reference links for Alaska nonprofits

• IRS – Information for Charities & Nonprofits
• IRS – Required Provisions for Organizing Documents
• IRS – 990 Series for Tax-Exempt Organizations
• IRS – Applying for Tax-Exempt Status
• IRS – 501(c)(3) Compliance Guide
• Small Business Administration – License and Permits
• Alaska Department of Revenue – Tax Division
• State of Alaska Department of Commerce – Business License
• Alaska Department of Law – Charitable Organization Registration
• Alaska Department of Revenue – New Hire Reporting
• Alaska Nonprofit Community Association Handbook