LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in Alaska

At a glance

Requirements one by one

Outside and company proceedings

Alaska Stat. § 10.50.148(a) permits indemnity for a manager, managing member, employee or agent in an outside proceeding, including requested service for another enterprise. It can cover actually and reasonably incurred expenses, attorney fees, judgments, fines and settlements if the person acted in good faith, reasonably believed the conduct was in or not opposed to the company's best interests, and lacked reasonable cause to believe criminal conduct was unlawful. § 10.50.148(b) permits expenses and fees in an action by or in the company's right under its good-faith and interest test, but an adjudication of negligence or misconduct bars payment unless the court allows proper expenses on application. Under § 10.50.148(c), a successful defense requires indemnity for actually and reasonably incurred expenses and attorney fees.

Approval, interim expenses and insurance

Section 10.50.148(d) requires a member determination that the statutory conduct standard is met for discretionary indemnity unless a court orders otherwise. § 10.50.148(e) permits advance payment or reimbursement of reasonable civil or criminal defense costs before final disposition through that decision route. A manager or managing member must provide a written good-faith affirmation tied to § 10.50.135(a); all covered recipients provide a written unlimited repayment undertaking, and known facts must not preclude indemnity. § 10.50.148(g) permits insurance for present or former covered people and requested outside service even if the LLC lacks indemnity power for the liability.

What trips people up

§ 10.50.148(f) makes indemnity nonexclusive and continues the right after a person leaves the covered role, with a stated benefit for heirs, executors and administrators. The section's reimbursement language concerns proceeding expenses, not a general reimbursement rule for an ordinary company payment. Advance payment under subsection (e) does not resolve final indemnity or insurance coverage.

Common questions

Does a complete defense change the result? Yes. Section 10.50.148(c) uses “shall” for reasonable expenses and attorney fees when the covered person succeeds on the merits or otherwise.

Can the LLC insure conduct it may not indemnify? Section 10.50.148(g) expressly permits insurance even when the company lacks indemnity power; the policy determines coverage.

Statutes and sources

• Alaska Stat. § 10.50.135(a): manager and managing-member good-faith, interest and prudent-care standard cited by the advance rule. Official current chapter, accessed 2026-09-23.
• Alaska Stat. § 10.50.148(a)–(c): outside and company proceeding indemnity, adjudicated-liability court exception, and mandatory successful-defense expenses. Official current chapter, accessed 2026-09-23.
• Alaska Stat. § 10.50.148(d)–(g): member eligibility decision, written advance assurances, survival, and insurance even without indemnity power. Official current chapter, accessed 2026-09-23.