Limited Liability Company – General – Alaska
Related Alaska Legal Forms
In Alaska, a limited liability company (LLC) organized to engage in the practice of public accontancy is subject to the provisions of the Alaska Limited Liability Company Act as well as the rules and regulations of the State Board of Public Accountancy.
The Alaska Limited Liability Company Act provides that a LLC may be organized to engage in any lawful purpose. However, the Act does not address with specificity any restrictions that are applicable to a LLC organized to engage in the practice of a profession.
Therefore, it seems prudent to incorporate in a LLC operating agreement, those restrictions which the Alaska Professional Corporation Act imposes on corporations organized to engage in the practice of a profession. Those restrictions will be discussed in this Summary and are incorporated in the forms included herewith.
The Alaska Revised Limited Liability Company Act provides that the name of a limited liability company must contain the words “limited liability company” or the abbreviation “L.L.C.,” or “LLC”. The word “limited” may be abbreviated as “Ltd.,” and the word “company” may be abbreviated as “Co.” The name of a city, borough, or village may be used in a limited liability company name; however, the name may not contain the word “city,” “borough,” or “village” or otherwise imply that the company is a municipality.
Further, the name of a limited liability company must be distinguishable on the records of the Department of Community and Economic Development from the name of any other organized entity and from a reserved or registered name.
The restrictions that are placed on an Alaska professional corporation that could be significant to an Alaska LLC organized to engage in the practice of engineering are:
1. A professional corporation may issue shares of its capital stock to persons licensed to render the professional service specified in the articles of incorporation. It may not issue shares to any other person.
2. A person may not be a director or officer of a professional corporation if the person is not a shareholder of that corporation. A person may not be a shareholder, director, or officer of more than one professional corporation at one time.
3. A shareholder of a professional corporation may sell or transfer shares in the professional corporation only to another individual licensed to render the same professional service as that for which the professional corporation was formed.
4. A proxy may be given to a licensed shareholder of the same corporation to vote the shares of the professional corporation. No other person may be given a proxy.
5. The provisions of the Alaska Professional Corporation Act do not modify the law applicable to the relationship between a person furnishing professional service and a person receiving the service, including liability arising out of the professional service, and including any confidential relationship between the person rendering the professional service and the person receiving the service.
6. The Alaska Professional Corporation Act does not restrict or limit the authority and duty of the regulatory boards for the licensing of persons rendering professional services or for the practice of the profession which is within the board’s jurisdiction.
7. If a shareholder, director, officer, employee, or agent of a professional corporation is legally disqualified to render professional service in this state, or is elected or appointed to a public office which under law restricts or limits the rendering of professional services, that person shall sever all employment and financial interest in the professional corporation immediately.
8. A professional corporation may provide in its articles of incorporation that the shares of a legally disqualified shareholder may be sold only to other shareholders or licensed persons of the same profession, or it may provide for the purchase, redemption, or retirement of the shares by the corporation out of capital as well as surplus funds and without regard to the impairment of its capital. If there is no provision for the disposal of the shares and the legally disqualified shareholder has not disposed of the shares as required under AS 10.45.200 , the corporation shall purchase, redeem, or retire the shares out of capital as well as surplus funds without regard to the impairment of its capital within 30 days after the disqualification occurs.
9. A professional corporation may provide for the disposal of the shares of a deceased shareholder in its articles of incorporation or bylaws, or its shareholders may provide for their disposal by private agreement. If there is no provision or private agreement, the shares shall first be offered for sale to the remaining shareholders by the personal representative of the deceased shareholder’s estate at a price not to exceed their book value, and, if not sold, then offered and sold to any licensed person of the same profession as the corporation without obtaining the approval of the remaining shareholders. If the shares are not disposed of within six months from the date of the death of the shareholder, the corporation shall call a special meeting of its shareholders and shall decide by a majority vote of the remaining shareholders whether or not the corporation purchases, redeems, or retires the shares at book value or lesser price if agreed, or files for a dissolution of the corporation. At the special meeting the shares of the deceased shareholder may not be voted on or counted for any purpose, unless the deceased shareholder was the sole shareholder.
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