Nebraska has consistently been ranked as one of the best states in the country for doing business. The state is exceptionally welcoming for entrepreneurs thanks to its low income tax rates and stable market.
If you plan to become an entrepreneur but are still unfamiliar with the state’s formation process, this article is meant to outline how to form an LLC in Nebraska and navigate the early stages of its management.
Table of Content
Small businesses make up over 99.1% of all businesses in Nebraska, including limited liability companies. The LLC structure attracts many new entrepreneurs for its tax concessions, personal asset protection, and general flexibility when it comes to membership and management. It’s also fairly simple to organize, so let’s go through the basic steps of its formation.
One of the first things you might want to tackle on the path of creating an LLC in Nebraska is finding an appropriate name for your company. It’s important to not only make the Nebraska LLC name memorable for marketing reasons, but it’s also essential to follow the state’s naming regulations to ensure your name is fully legal.
Under the Nebraska Revised Statutes Section 21-108, an LLC name has to clearly indicate the company’s type, i.e., that it is, in fact, a limited liability company. In order to do this, you should include any of the following to the name:
Remember that an LLC name is legally required to be distinguishable from other entity names registered in Nebraska. Plainly speaking, your company name can’t be identical to that of an already existing entity or even have a name that is deceptively similar to an already registered name. To see if your name hasn’t been taken, be sure to run it through the free Corporate & Business name search tool on the Nebraska Secretary of State website.
Though it is theoretically possible to use a non-distinguishable name, it entails obtaining either the consent of the current name user or a court ruling that certifies you for such usage.
One of the minor issues that occur quite often when setting up an LLC in Nebraska is the timing, specifically when it concerns handing in the actual application. Say you found the ideal name for your company, but you can’t proceed with the registration quite yet, be it due to lack of funding or some hold-ups with paperwork.
In cases like this, it’s important to make sure your LLC name remains your own. This is made possible by the name reservation option outlined in the Nebraska Revised Statutes Section 21-109. If you wish to reserve your LLC name, including a DBA or fictitious name, simply fill out the Application form and file it with the Secretary of State at:
Robert B. Evnen, Secretary of State
P.O. Box 94608
Lincoln, NE 68509
The form must include the moniker you wish to reserve as is, plus your name and address. The filing fee for this application is $30 per name. You can also transfer reserved names for the same price, should you require it.
Trade names are a good way to expand the nature of your operations, but they can also be used in cases when an LLC had to be initially registered under a name that is not very viable for subsequent marketing and promotion of its services or products.
A trade name is more free-form, meaning there is no need to attach company designation to it. It can also better reflect your company’s business activities. Your application form must be submitted along with the filing fee of $100 (for e-filings) or $110 (for physical filings).
Please note that Nebraska extends its publication requirements to trade names. You should:
If your municipality does not have such a periodical, the publication should be handled by a county newspaper. Publication fees are determined by each newspaper based on their ad fees.
It’s worth noting that trade names that are available in Nebraska might be taken in other regions. You can use the USPTO search to ensure your preferred trade name is free.
The agent for service of process, also commonly known as the registered agent, is an official representative of any given formal entity whose main duties involve receiving correspondence and legal documents and forwarding them to the business in question.
According to the Nebraska Revised Statutes Section 21-113, an agent for service of process is mandatory for Nebraska LLC registration and subsequent maintenance. If you don’t appoint an agent for your company, you simply won’t be able to operate your business in any legal capacity.
A Nebraska agent for service of process can be an individual resident or an entity authorized to operate in the state. This means that an LLC owner or any of its key members can technically appoint themselves as their company’s registered agent as long as they are a Nebraska resident.
The tendency for company owners to appoint themselves as their own agents is tied directly to the financial aspect of forming an LLC in Nebraska. By taking this route, you will likely be able to:
Keep in mind, though, that any cost-saving benefits offered by this method become obsolete in the face of sheer inconvenience of performing this job as well as potential fines for missing state alerts.
If you choose to be your own RA, expect the following conditions:
This is precisely why most entrepreneurs choose to hire a professional agent—both to preserve their privacy and to keep their schedule flexible.
Although appointing a professional agent is more costly, most agencies strive to keep the annual fees within $99-$200, with the most affordable companies offering free services for up to a year. All in all, paying $100 per year is an acceptable adjustment to the overall LLC Nebraska cost, as it will keep your company fully compliant and minimize the risk of penalty fees.
The process of starting an LLC in Nebraska legally begins with the filing of your Certificate of Organization, commonly referred to as the Articles of Organization.
This document contains all relevant information about the company, and its approval by the state will signify the official commencement of your company.
According to the Nebraska Revised Statutes Section 21-117, the organizer must fill out the certificate of organization with all relevant information about the business, namely:
If you wish to file LLC Nebraska documents for a professional limited liability company (PLLC), be sure to detail the professions and services (subject to license) that your company owners, managers, members, and employees are authorized to perform.
The state fee for this filing forms the baseline for your Nebraska LLC cost. Online applications cost $100 and can be submitted via eDelivery. In-person applications cost $110 and can be filed at:
Robert B. Evnen, Secretary of State
P.O. Box 94608
Lincoln, NE 68509
Please also note that the certificate of organization can’t act as a statement of authority, i.e. specifying which LLC members have the legal power to act on behalf of the company for certain business affairs and transactions.
Under the Nebraska Revised Statutes Section 21-127, a statement of authority should be filed separately with the Secretary of State along with the filing fee of $25 (via eDelivery) or $30 (in-person).
An operating agreement is not a formal document regulated by the state itself, but rather a legal contract between the organizing LLC members. The contract is designed to establish the ground rules for member conduct and company operations.
There is no stipulation in the LLC formation Nebraska rules that mandates the LLC owners to draft an operating agreement, but it’s highly irregular for an LLC to go without one. Even the most cursory research into how to register an LLC in Nebraska will indicate that this step is extremely important, as this contract is meant to organize the company, outline responsibilities, and protect the interests of its members.
If an operating agreement does not specify a specific issue, such an issue will fall under default judgment as administered by the Nebraska Uniform Limited Liability Company Act.
Every company tailors its operating agreement to the LLC’s operations and various needs, so it’s not exactly possible to enforce a single standardized form. That said, a standard list of contents for an operating agreement usually covers:
Naturally, the safest way to draft a solid operating agreement is by hiring an attorney who specializes in these types of contracts. A cheaper option would be using a template provided by an LLC formation service with one of their formation packages, buy it from them as a separate feature, or use one of the free online templates.
Nebraska is one of the three states (apart from Arizona and New York) that have the LLC publication rule. This means that when you open LLC in Nebraska, it’s legally required to run a notice about this formation in a local newspaper.
After you file your certificate of organization with the Secretary of State, you must then publish the date of formation and other information about your company in a legal newspaper that circulates in your jurisdiction.
The Nebraska Revised Statutes Section 21-193 states that the notice has to:
It’s hard to estimate the exact cost for this publication, since each periodical sets its own fees for ad placements. Rather than charging for the placement itself, legal newspapers tend to calculate their fees per line. Publications in large counties and bigger newspapers could cost you anything between $100 and $250, while more modest periodicals in smaller counties tend to be more affordable, charging $40-$70.
Plenty of guides on how to start an LLC in Nebraska will specify that an EIN is not technically required for every business. While legally true, most industry specialists recommend going through this step as soon as possible.
An Employer Identification Number, also known as EIN or federal tax ID, is a unique number assigned by the IRS to a formal entity with the purpose to monitor its financial activities.
Acquiring an EIN is necessary when:
The EIN plays the same role as a Social Security Number does for private individuals, hence why sole proprietors and single-member LLC owners sometimes use their personal SSNs instead of applying for the tax ID.
Again, companies of this type can technically do that, as the owners don’t have employees or other members, but in practice it will still be more convenient to use an EIN to conduct your business.
Registering for tax ID is a straightforward process. When you look through packages offered by most formation companies, they often try to sell this feature as a premium service. And even reading some step-by-step manuals on how to get an LLC in Nebraska will make you believe it’s a feature worth paying for.
However, the IRS can issue an EIN entirely free of charge. You can register your tax ID through the IRS website, in which case they will issue the number almost immediately, or send your Form SS-4 through post or by fax.
The base cost for opening a limited liability company is determined by the state filing fees. Nebraska Secretary of State provides detailed forms and fee information on their website, including the prices for LLC registration.
However, if you are trying to find any single figure to answer the question of how much is an LLC in Nebraska, you won’t be able to get a certain estimate. Although the base fee for sending your application is $100 (or $110 for physical filings), the actual cost is usually higher than that since you have to factor in other mandatory fees.
|Certificate of Organization||$100 - $110|
|Registered Agent||$99 - $300+|
|NE Publication||$40 - $250|
|Total||$239 - $600|
The main fee you have to consider when researching how to set up an LLC in Nebraska is the registered agent, or agent for service of process as they are known in Nebraska.
Professional agents typically charge on an annual basis, starting from around $99 per year, so it’s a recurrent expense for maintaining a business. But given that you can’t legally start a company without hiring an agent, the first year of their services is usually added to your LLC formation costs.
Some formation services offer registered agent services for free for the first year of usage, but it is unlikely to cut your initial expenses as you will have to pay their professional fees on top of Nebraska state fees. In some cases, it will prove to be more affordable to purchase a registered agent service separately for $99, $119, or $199 per year, and then file the certificate of organization yourself.
Another mandatory expense that fluctuates greatly is publication. The cost of running your formation notice depends on:
You can expect small publications to be cheaper, somewhere between $40 and $70, so naturally it will be more affordable to start a company in a small county.
So what is an LLC in Nebraska exactly? Including the publication and registered agent fees, the minimum cost for opening a business is $239. It should be noted, however, that additional maintenance costs (like seller’s permit, should you need one) will increase the overall cost.
After you learn how to apply for LLC in Nebraska and the first stage of preparing your business for operation is finished, it’s time to ensure your company runs smoothly on a daily basis.
It’s fairly standard for sole proprietors and certain small businesses to use personal bank accounts to conduct their business transactions.
While not against the rules, the situation could prove difficult for LLC owners that keep their business finances mixed up with their personal ones.
A dedicated business bank account gives you major advantages as an owner, as it can help:
Licenses are applied within state, federal, and local jurisdictions. Each business is bound to have different requirements based on the nature of its operations as well as its location in Nebraska.
While there is no general business license requirement in Nebraska by name, you do need to register for the sales tax permit, also called the seller’s permit, even if you don’t plan to sell goods and services.
The seller’s permit is something you will need if you do business transactions in the state or engage in retail. There are three ways to get the seller’s permit:
Nebraska Department of Revenue
PO Box 98903, Lincoln
Professional licenses are also mandatory for companies that offer services subject to professional certification. You can learn more about which professions and occupations need permits or licenses on the Nebraska One Stop License and Inspection Portal.
Certain business operations require federal licensing, even if your state does not have any domestic requirements for the same industry. If your line of work is something that falls under federal government regulations, you will need to obtain all relevant licenses to be able to operate your business.
|Agriculture||U.S. Department of Agriculture|
|Alcohol||Alcohol and Tobacco Tax and Trade Bureau|
Local Alcohol Beverage Control Board
|Aviation||Federal Aviation Administration|
|Firearms, ammunition, explosives||Bureau of Alcohol, Tobacco, Firearms and Explosives|
|Fish and wildlife||U.S. Fish and Wildlife Service|
|Commercial fisheries||National Oceanic and Atmospheric Administration Fisheries Service|
|Maritime transportation||Federal Maritime Commission|
|Mining and drilling||Bureau of Safety and Environmental Enforcement|
|Nuclear energy||U.S. Nuclear Regulatory Commission|
|Radio and television broadcasting||Federal Communications Commission|
|Transportation and logistics||U.S. Department of Transportation|
One major thing you need to understand when you research how to get a LLC in Nebraska is that some aspects of acquiring local licenses and permits are far from being streamlined.
In most cases, you will have to contact government offices to inquire about licensing rules before you can do any business in your city. To learn more about local licenses, check with your town and county representatives. Alternatively, you can hire a formation service or an attorney to handle that for you.
Making necessary steps to ensure your LLC’s protection is a huge part of managing your business successfully. It’s all about commitment when it comes to fully understanding how to open an LLC in Nebraska, and this means the general need to plan for every contingency early on.
Just like personal health or car insurance, business insurance is an investment that seems too costly on the surface, but will definitely make your life easier and safer in the long run. Every business has its own vulnerabilities directly connected to the line of work it tackles, so insurance recommendations vary based on what risks you take at work.
The most common types of business insurance include:
The next stage of the formation process is handling state compliance requirements. It won’t be enough to just learn how to create an LLC in Nebraska—you will need to understand all legal aspects involving your company’s day-to-day management.
Nebraska LLCs are exempt from corporate income and occupation taxes as they are treated as disregarded entities. You can find out more about state taxation and payment on the official DOR and Business tax FAQ pages.
That said, if you choose to elect a C-corp tax system for your company, your LLC will be subject to the state’s corporate income tax. These returns are generally filed on a federal schedule with the Nebraska Department of Revenue using Form 1120N. Failure to pay this tax will result in a penalty calculated at 5% per month of the due sum for the maximum of five months, after which your company may be dissolved.
Nebraska sets its sales and use tax rate at 5.5%. In order to file your annual sales tax, you must first obtain a permit from the Department of Revenue by filing Form 20. Additionally, you will need to file local (county and city) sales and use taxes using Form 10.
If you have employees, it’s your duty to withhold their portion of the taxes from every paycheck, usually monthly or once every quarter, as well file Form W-3N for reconciliation.
In addition to this, LLC owners with employees must file unemployment insurance taxes with the Nebraska Department of Labor. To register for this tax, you need to file UI Form 1 with the DOL, after which you will be expected to file reports each quarter using Form UI 11-T.
The IRS classifies LLCs as pass-through or flow-through entities, meaning that a multi-member LLC will be taxed as a partnership and a single-member LLC as a sole proprietorship. Unlike partners in a C-corporation, LLC members do not pay corporate tax but report the profits and losses from their share on their personal returns using Form 1040, Schedule C.
As mentioned before, if you have employees, your LLC will be subject to FICA taxes (Social Security and Medicare) at the 15.3% rate.
Every domestic and foreign Nebraska LLC must file a biennial report—every two years on odd numbered years). The reports must be sent in no later than April 1. If you fail to submit your statement of information by June 2, your LLC will be classified as delinquent. According to the Nebraska Revised Statutes Section 21-192, the report must be filed along with the state fee of $30 (by mail) or $25 (online).
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.