How to Start an LLC in Nebraska
Each state in the United States is responsible for the administration of businesses, from sole proprietorships to corporations and including LLCs. In Nebraska, the Secretary of State’s office is the governing agency. Before your business can be considered officially started, entrepreneurs need to follow all the proper steps to be recognized in Nebraska.
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No matter your experience or industry, starting a business is never an easy endeavor. It requires planning and preparation to get started, as well as the responsibility to carry out over the following years. One of the early choices you will make as a Nebraska business owner is what structure your business should be. Many people choose an LLC, or limited liability company, which is a formal structure that is administered by the Nebraska Secretary of State. If you are planning to join the 181,000 small business owners in Nebraska with your own LLC, follow this step-by-step guide below to get started.
Name your LLC
Have a name in mind? See if it’s already listed in the state’s business directory. If the name comes up in a search, it’s taken. If it doesn’t, it’s yours to claim.
Without a name, your new business cannot be recognized by Nebraska. This name will be the primary identifier in all state records as well as your initial applications. It is important to have a name chosen before you begin any paperwork, as well as to ensure that the name you choose complies with state laws and guidelines.
Nebraska naming guidelines
Like other states, Nebraska requires that each business entity registered there has a unique name that is completely distinguishable from other businesses in the state. The state website allows you to run a name search for existing names to ensure that your chosen moniker is available. Your application will be denied if you submit a name that is taken, so it is important to research name availability.
Nebraska also requires that LLCs have the phrase “limited liability company” or an abbreviation like LLC or L.L.C. in the name itself. Other words may be restricted, like those that sound like a government agency or words that imply a licensed professional is involved in the startup.
Other name considerations
In addition to the availability of a name in Nebraska, it is a good idea to see if it is open for use online. Having a domain name and social media handles that match your business name can make it easier for customers to find you and ensure you don’t get confused with the competition. Before committing to a name, do a quick online search to see if your chosen name is taken.
Reserving a name
If your name is available, you want to make sure you claim it as soon as possible. This is typically done by forming an LLC, but you can also reserve the name until you are ready to proceed. Nebraska doesn’t allow this to be done online, but you can print out the Application for Reservation of Limited Liability Company Name and mail it in.
With your application, include a check for $15 made payable to Nebraska Secretary of State. This reservation is valid for 120 days.
You can reserve a business name in Nebraska for 120 days.
Select a registered agent
Nebraska requires each LLC to name a designated point of contact for your company. This is often called a registered agent, though Nebraska also uses the term agents for service of process. This name refers to the agent’s main role, which is to receive services of process and other official government correspondence on behalf of the LLC.
One option is to name an individual as your registered agent. This can be anyone, including yourself or a loved one. For an individual to be a registered agent in Nebraska, they must:
- Be 18 or older
- Be a full-time resident of Nebraska
- Be on-site and available to receive documentation during regular business hours
Because of the availability requirement, many business owners prefer to use a registered agent service to carry out this role. Any service that is authorized to transact business in Nebraska can be used for this.
File Certificate of Organization
All of the information about your LLC, like the name and registered agent, needs to be captured on the formal application. This is known as a Certificate of Organization and it must be filed with the Nebraska Secretary of State’s office. To do so, you will need to either upload a PDF of the document or mail it to the office.
Unlike most states, Nebraska does not provide a standard Certificate of Organization form to be completed. Instead, you will need to draft your own in accordance with the state statute. This statute requires that you include:
- Name and address of the business
- Agent for Service of Process name and mailing address
- Effective date
- The word “Organizer” and the organizer’s signature
- Applicable information for a PLLC
Once this information has been compiled into a document, it can be submitted to the state.
The formation documents are called Articles of Organization in other states.
You can fill out and submit your LLC formation documents here.
When submitting a Certificate of Organization online, the fee is $100. For those submitted through the mail, it is $110. Both fees are non-refundable for any reason.
Nebraska processing time
The expected turnaround time between filing a Certificate of Organization and having it processed is 2 to 3 business days.
Complete publication requirements
In Nebraska, an LLC must publish a Notice of Organization before the business can be recognized. This must be published for three consecutive weeks in a newspaper of general circulation in the county where the LLC’s main office is located.
The Notice of Publication must include the name and street address of the LLC and the nature of its business. After all three weeks are complete, you will receive an affidavit of publication from the newspaper that can be filed with the Secretary of State.
Create an LLC operating agreement
While LLCs are not required to have an operating agreement in Nebraska, the general best practice is for any business to have one in place before beginning operations. There are many templates online, or a business attorney can help draft an operating agreement, but the purpose is simply to have a legal document in place that outlines how the business will be run. All members of the LLC agree to and sign the procedures, which can be referenced in case of conflict down the line.
Each business may have specific provisions in their agreement, but general topics covered will include:
- Identifying information, like the name and address of the LLC.
- A statement of intent, which covers compliance with LLC laws of the state.
- Business purpose of the LLC.
- Term of the business, which is typically perpetual unless there is a specific end date.
- Management structure (manager-managed, member-managed, or single-member LLC)
- Tax treatment elections.
- How new members will be elected, including capital contributions and formal processes.
- Initial capital contributions of each member and if they will contribute more in the future.
- How profits and losses will be distributed.
- When member meetings will be held and how votes are to be conducted.
- What happens in case of a member leaving or transferring their interest.
- When and how a business can be dissolved.
Once your operating agreement is complete, there is no need to file it with Nebraska. The signed document should be kept on file for your organization’s future reference.
Now that your LLC has been formed, it is time to focus on operating your business. Doing so comes with a set of requirements that keep you in compliance with both federal law and Nebraska state law.
Get your EIN
No matter your tax election, most businesses will need to have an Employer Identification Number at the federal level. This number, issued by the Internal Revenue Service, is used to track your business for tax purposes and ensure it is identifiable. You can think of an EIN like a Social Security Number, but for a business instead of an individual.
A handful of businesses won’t be required to have an EIN. If there are no employees and no excise taxes to be paid, an EIN may not be required for an LLC. However, it is always recommended to have an EIN because banks and other vendors may require one. If you cannot provide an EIN, you may be forced to use your personal Social Security Number, which puts your identity at risk.
It is free to obtain an EIN, and they are issued immediately when you apply.
You can get your EIN by visiting the IRS website.
Get Nebraska business licenses
When it comes to state-level licensing, the only thing you need to worry about is the seller’s permit or tax permit. Any business in Nebraska that sells or leases taxable goods and services must have this permit in place before they can do any business. The Department of Revenue is responsible for issuing tax permits.
Other state-level licenses may be required for certain professions. The Nebraska One Stop License and Inspection Portal provides a full list of these professions and requirements.
Local governments will typically require further licensing at the county or city level. This will vary by location and may include business licenses, local seller’s permits, or professional licensing at the local level.
Open business bank accounts
As an LLC owner, it is important to maintain a separation between yourself and your business in order to maintain the personal asset protection afforded by this business structure. If you are found to be intermingling your personal and business finances, this protection can be eroded, leaving you responsible for business financial obligations. For this reason, it is important to have a separate business bank account set up for your LLC.
A checking account is generally the best place to start, as all expenses and income can be in one place and specifically allocated to the business. Having a central account also makes tax preparation and accounting simpler.
You may also choose to have a savings account in your business’s name, or even credit cards. The latter can help you build a credit score for your business, which may be helpful if you need more funds in the future.
Review LLC tax rules in Nebraska
The majority of LLCs are set up as pass-through entities, meaning that income taxes are not filed on behalf of the business. Instead, members account for profits and losses in their own tax returns, avoiding corporate LLC tax rates.
LLC owners pay federal taxes and state taxes via their own personal tax returns.
File an annual report
Nebraska does require all LLCs to file a biennial report in every odd-numbered year. This can be done by mail or online by filling out a simple form, including your state-issued account number. Reports are due on April 1st of each odd-numbered year and include a $10 fee, or $13 if paying by credit card.
In other states, these reports are known as a Statement of Information.
Get insurance for your LLC
If a business has one or more employees, including LLC members, Nebraska requires that they have workers’ compensation insurance in place. This insurance offers coverage for any employees who are harmed or made ill because of their work.
Along with workers’ compensation insurance, most businesses choose to have liability insurance in place. General liability insurance provides protection in the event of a lawsuit for things like property damage or personal injury where the business is at fault. Additionally, some professional service providers may also have professional liability insurance in place to guard against malpractice suits.
Additional resources to help you set up a business in Nebraska
For those starting an LLC in Nebraska, the state offers a number of resources designed to make the process simple.
Do I need a seller’s permit in Nebraska?
Any business that is conducting operations in Nebraska and selling or leasing taxable goods and services must have a seller’s permit, which is sometimes called a tax permit. This can be obtained through the Nebraska Department of Revenue for no fee.
How do I reserve a business name in Nebraska?
While Nebraska allows for name reservations, they cannot be done online. You can fill out the Application for Reservation of Limited Liability Company Name and mail it to the Secretary of State’s office at P.O. Box 94608 Lincoln, NE 68509. You must include a $15 check payable to the Nebraska Secretary of State.
Does Nebraska require an EIN?
EINs are issued by the IRS and federal law dictates whether a business is required to have one. At the state level, Nebraska issues account numbers to all businesses which are used for most online filings and tax paperwork. The Department of Revenue can issue a Nebraska Identification Number for tax purposes as well.
How do I prove I completed the Notice of Organization in Nebraska?
Once you have appropriately published a Notice of Organization, the newspaper will provide an affidavit or Proof of Publication to you. This document must be filed with the Secretary of State and connected to your existing LLC entity in order to remain in good standing and avoid dissolution of your LLC.
Where do I fill out the Nebraska Certificate of Organization?
Unlike most states, Nebraska does not provide a standard form for Certificates of Organization. Instead, the state law dictates what must be included, and organizers create and submit their own documents. As long as the appropriate information is included, this is considered valid for the purpose of LLC formation.
Where do I publish a Nebraska Notice of Organization?
Any LLC formed in Alaska is required to publish a Notice of Organization as a part of the formation process. This notice includes the basic information found in the Certificate of Organization and must be published three weeks in a row in a newspaper with a general circulation near the LLC’s principal address.
Does an LLC provide liability protection?
Yes. This type of business does provide limited liability protection, which means personal assets are kept separate from the business. If, for instance, the business goes into debt, your personal assets like your home aren’t used to bail out the company.
What happens if I do not have an operating agreement for a Nebraska LLC?
Nebraska does not require that LLCs have an operating agreement in place, so there is no consequence from the state. However, without an operating agreement, any disputes will be settled using Nebraska’s existing LLC laws. These laws will also be used if the operating agreement is not in accordance with state law.
Can my LLC have a DBA in Nebraska?
If you would like to operate your Nebraska LLC under a different name than its legal name, you can file a trade name. This is the same as a DBA or doing business as, in other states. If the name you would like to use is available, you simply register the trade name and publish a notice of its use.
Do Nebraska LLCs file an annual report?
Rather than filing a report every year, Nebraska requires that LLCs file a biennial report. This report must be completed every other year, on odd-numbered years only. This serves to keep business records up to date. It is $10 to file a biennial report by mail or $13 online.
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