Steps to Dissolve Your Alaska Business Today
- Establish a valuation of your Alaska business
- Compile a full account of your Alaska business’s debts
- Identify Alaska’s official dissolution document
- Follow instructions in your Alaska business’s operating document
- Cancel your Alaska business’s permits, licenses, and registrations
- Wrap up your Alaska business’s legal and financial obligations
- File the Articles of Dissolution for your Alaska business
Starting your own business is exciting and rewarding work. However, the fact remains that many businesses choose to dissolve each and every day. This happens even for some of the most successful businesses. In fact, there are a number of reasons why a business may choose to close, including:
- Owners want to retire
- To avoid bankruptcy
- To start a new business venture entirely
Regardless of the reasons for choosing to dissolve an Alaska LLC or an Alaska corporation, it’s important to know how to dissolve a business and what to expect. No matter the business’s financial position, failure to properly dissolve and wind up the business can result in:
- Continued tax liability and reporting requirements
- Possible fines and other financial penalties for the entity and individual owners
- Negative impact on potential future business ventures and the credit of individual owners
It’s imperative that you correctly and timely dissolve your business. It is also critical to properly form your business and stay compliant with the state until it’s time to close the company. Failure to do so can make the dissolution process more complicated than it needs to be.
Before dissolving your Alaska business
There are a few important things you should know before you actually dissolve your Alaska business.
Specifically, you’ll want to establish a thorough and secure record of all of your corporate or LLC business dealings from the company’s entire lifespan. While this may seem unnecessarily tedious and time-consuming, just know that doing this legwork up front will save you valuable time and effort moving forward.
We know this can feel overwhelming. That’s why we’ve created the guide below to help you learn more about the dissolution process in Alaska, and what we can do to make this as easy as possible for you.
Step 1: Establish a valuation of your Alaska business
To accurately establish a valuation of your business, you need to gather as much information as you can about your business’s assets. Such assets include real estate, current inventory, and anything else of value your business owns. Any documents related to your operations, including contracts with third parties and tax information, can be crucial to establishing an accurate valuation for your business entity.
Also, don’t be afraid to hire a professional to help you evaluate certain aspects of your business. With so much on your plate already, it can’t hurt to have someone familiar with business valuations to give you an unbiased and accurate opinion.
If you sign up for our Worry-Free Compliance Service and our easy-to-use dashboard, we can help keep your business documents organized so that gathering your information is easier.
Step 2: Compile a full account of your Alaska business’s debts
Be sure to verify what debts your company owes to whom. Then, make sure to pay off those debts. Remember — just because you’re closing up your business doesn’t mean that your business debts are automatically forgiven and forgotten.
In fact, failure to pay off company debts can result in ramifications and legal liability for the business itself, as well as for individual owners. So don’t forget this crucial step in the dissolution process.
Step 3: Identify Alaska’s official dissolution document
Next, it’s time to identify your state’s official dissolution document. In Alaska, limited liability companies must file what’s called the Articles of Dissolution. In addition, corporations must also file Articles of Dissolution (Part 2 of 2). However, business corporations have to file a Certificate of Election to Dissolve (Part 1 of 2) first before filing the Articles of Dissolution.
The Articles of Dissolution for your Alaska business must include certain information, including:
- The name of the entity
- Your Alaska entity number
- The date of the filing of the Certificate of Formation for the business
- A brief statement regarding the reason(s) for filing an Alaska Voluntary Dissolution
- The effective date of the articles, if different from the date of filing
- Any other information deemed appropriate by those filing the Articles of Dissolution
In Alaska, you’ll submit the Articles of Dissolution along with the requisite filing fee to the State of Alaska Department of Commerce, Community, and Economic Development Division of Corporations, Business and Professional Licensing, Corporations Section.
Filings can be submitted by mail. Processing times for hardcopy filings is typically 10-15 business days, but may take longer. Alternatively, you may be able to select online filing for immediate processing of certain filings.
Step 4: Follow instructions in your Alaska business’s operating document
Many businesses have governing documents — such as an Operating Agreement for LLCs or corporate bylaws for a corporation — that outline detailed rules and procedures for the dissolution of the business entity. If your business has such governing documents, you’ll need to follow those procedures correctly to avoid disputes moving forward.
If your business doesn’t have any governing documents that lay out the procedure for dissolution, Alaska law provides default rules. However, keep in mind that these default rules may not provide enough detail or clarity for certain situations that may arise. The best way to ensure a clear and fair process is in place is to have it set forth in your governing documents.
If you don’t have an operating agreement for your LLC, you can use our operating agreement template to help you get started. This can serve as a jumping off point from which you can craft specific rules that work well for your particular business’s needs.
But don’t forget — no matter what your governing documents say, you’ll still need to file the proper dissolution paperwork required by the State of Alaska.
Step 5: Cancel your Alaska business’s permits, licenses, and registrations
There are many business licensing requirements at the federal, state, and local levels. So most businesses are subject to certain permitting and licensure requirements. Some may renew automatically, but others have to be renewed at periodic intervals throughout the life of your enterprise.
Don’t spend money on licenses and permits you no longer need. Once you dissolve your business entity, any permits and licenses you previously obtained become obsolete. Therefore, it’s a good idea to check for and cancel any licenses and permits you no longer need after the successful dissolution of your business.
Step 6: Wrap up your Alaska business’s legal and financial obligations
Next, you can start to wrap up your business’s various legal and financial obligations. Examples of actions you may need to take include:
- Making final payments in compensation or other earned benefits to any employees in accordance with state and federal laws
- Filing final tax returns for the business at both the state and federal levels
- Cancel your Employer Identification Number (EIN)
All of these steps help you tie up any loose ends after dissolving your business.
Step 7: File the Articles of Dissolution for your Alaska business
Finally, you’re ready to file your Articles of Dissolution, along with the appropriate filing fee. For questions about the process or any difficulties with filing, you can contact the Alaska Department of Commerce, Community, and Economic Development Division of Corporations, Business and Professional Licensing.
We are here to support your Alaska business
Most businesses spend a lot of time forming their entity, but not as much thought is given to the closing process. Nevertheless, dissolution remains an important step in the business lifecycle. Make sure you take the appropriate steps from the outset to make dissolving your business as smooth and simple as possible.
No matter where you are in the business lifecycle, we’re here to help with your business needs so you can stay compliant along the way.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How do I dissolve a business in Alaska?
To dissolve your Alaska business, you’ll need to file a Resolution to Dissolve and subsequent Articles of Dissolution with the state. By getting your affairs in order before it’s time to file, you can ensure that the dissolution process is as quick and efficient as possible.
- How much does it cost to dissolve an LLC in Alaska?
Filing fees vary depending on the form you have to file, and they are always subject to change. It’s best to check periodically with the state for the most up to date filing fee information.
- How long does it take to dissolve an LLC in Alaska?
In most cases, the dissolution takes effect upon filing unless an alternate date is noted in the Articles of Dissolution.
- How do I dissolve a nonprofit organization in Alaska?
The process for dissolving a nonprofit corporation in Alaska is similar to the process for a for-profit corporation. However, a business corporation must file a Certificate of Election to Dissolve prior to the Articles of Dissolution, a nonprofit corporation must first file what’s called a Resolution to Dissolve.