Nebraska LLC Formation
Interested in forming a Nebraska limited liability company? A limited liability company (LLC) is a business entity that many small businesses choose to organize themselves when they are just getting started. An LLC has a few advantages for small businesses but may not be appropriate for more significant ventures or startups seeking investors. In addition, LLCs have a unique business structure that can get very technical.
It would be best to look closely at other business entities like partnerships and S-corporations before launching a Nebraska LLC.
We make business formation EASY. Learn about our DIY business formation services here.
Advantages of LLCs in Nebraska:
- Limited personal liability for members for business debts and lawsuits
- Fewer reporting and recordkeeping requirements than other kinds of entities, including corporations
- Avoiding the double taxation—business and personal—of corporations if taxed as a pass-through entity
- Unlike corporations, Nebraska LLCs do not have to file annual or biennial reports with the state
Disadvantages of LLCs:
- An LLC is not a good investment vehicle for outside investors
- LLCs and S and C-corporations pay commercial activity taxes, unlike sole proprietorships and partnerships
- LLC owners may pay self-employment taxes
Registering Foreign LLCs
Any foreign (out-of-state) LLC that wants to do business in Nebraska must register for a Certificate of Authority.
Step-By-Step: Forming a Nebraska Limited Liability Company
With all of that, you have decided to form an LLC in Nebraska. You have your members, your business plan, and a little startup capital, and you are on your way. Now you have to write and file your formation documents.
Here is a step-by-step guide for creating a fully operational Nebraska LLC.
Step I: Name Your LLC
Creating a legally proper LLC name and then protecting it is one of the first actions in LLC formation. This process can be complex and time-consuming, but the LLC needs to operate legally in Nebraska.
The first thing you have to do is create a great name (that's up to you). Nebraska law requires that the name be unique and different from any other company's name.
Your first task will be to search the Secretary of State business entity search page to make sure that your chosen name isn't already in use for an existing business.
This search is just a preliminary step to the state filing. You still need to go through the registration process to get your name approved by the state. After you have decided on a name, the name you will submit to the Secretary of State must then contain one of these legal suffixes:
- Limited Liability Company
- Limited Company
- Ltd. Co.
The name of the LLC cannot use any variation of the word “corporation." It cannot use language considered obscene or claim a profession or business affiliation that does not exist.
Suppose the LLC is providing a professional service. In that case, the certificate of organization must also state the professional service that the members, managers, and professional employees are licensed (or otherwise authorized) to perform in Nebraska. An LLC that will provide a professional service must also file a certificate of registration.
Reserve Your LLC's Name
Nebraska allows you to reserve a business name for 120 days while the formation process continues. Reserving a name is not a guarantee that your name will be approved, but it keeps anyone else from using it for that time.
Step II: Appoint a Registered Agent
The State of Nebraska requires an LLC to have a registered agent for service of process before formally filing with the state. A registered agent is designated to receive process (legal documents) on behalf of the LLC. A Nebraska registered agent can be an individual or a company (domestic or foreign) and may be an LLC member but does not have to be. The registered agent must have a physical Nebraska street address. A forming LLC will often choose a professional registered agent service or the company lawyer.
Step III: Legally Protect Your Business Name
Next, make sure that no one else can use it in business or on the internet. This means that you have to make sure that no one else uses that name. You do this by doing a name search to ensure that the internet domain name is available. If available, grab it immediately (that will only cost a few dollars).
If you want to do business nationally or operate in several other states, you should trademark the nonprofit's name with the United States Patent and Trademark Office (USPTO). This process takes some time and money. While that application is pending, the name is still protected as a common law trademark.
Once you receive your federal trademark, apply to the Nebraska Secretary of State to register it as a Nebraska trademark or service mark. You may also trademark the Nebraska LLC name with just the state, without a federal trademark.
If you are going to do business under a fictitious name or trade name—that is, a DBA—you must register that name with the Secretary of State. There is a $100 filing fee.
Now you can keep anyone else from using that name, and it conforms to Nebraska law.
Online Registrations You Will Need to File With the State
Open an account with the Secretary of State. It would help if you did this before conducting business with the state as an LLC.
Sign up for Corporate Document eDelivery so that you can file online.
Step IV: Structure the Business
An LLC has a particular, unique business structure.
To begin with, the stakeholders of an LLC are called “members." There is no stock issued, so they cannot be “stockholders." This is the primary reason that an LLC is not a good investment vehicle for either the founders or potential investors.
There is no number of members required. You can have a single-member LLC—say, for a one-person office. Then, you should write an operating agreement. This is not required under Nebraska law, but it is good to keep everybody's interests clear.
A Nebraska limited liability operating agreement should contain the following points:
- Percentage of members' ownership
- Voting rights and responsibilities
- Powers and duties of members and managers
- Distribution of profits and loses
- Holding meetings
- Buyout and buy-sell rules (procedures for transferring interest or in the event of a death)
The members may manage an LLC or hire an outside manager. You will indicate which you have chosen on your registration application.
Step V: Write and File Your Nebraska Certificate of Organization With the Secretary of State
You are now ready to compose and register your Nebraska LLC as your business registration with the Nebraska Secretary of State.
Foreign LLCs cannot use this process. They must register separately, as noted above.
Your LLC certificate of organization must contain the following:
- LLC company name and mailing address
- Members of the company
- Name and street address of the registered agent
- If it will be a professional LLC, list what type and the members who are licensed in that profession
- Effective date of the LLC
- Filing fee of $100 (online) or $110 (in office)
This is filed with the Nebraska Secretary of State, either online or by mail. The state does not supply a fill-in-the-blank LLC Certificate of Organization, so you (or, more likely, your lawyer) will write it.
If you file online, you will have an immediate response. If you file with paper forms, it will take 2-3 business days.
All new LLCs are required to publish a notice of organization in a newspaper of general circulation near the company's principal place of business. This must run a minimum of three consecutive weeks, after which the newspaper will send you a Proof of Publication. That Proof of Publication needs to be filed with the Secretary of State.
After You File Your Certificate of Organization
You will have numerous state and federal requirements for your new LLC after filing with the state.
State Business Licenses
Certain kinds of businesses (professionals, construction, liquor businesses, etc.) must be licensed with Nebraska. In addition, there may be local business licensing requirements, environmental impact requirements, state fees, etc.
State Employer Filing Requirements
- Your LLC will be subject to state rules if it has employees—even if the employees are also members
- You must register all new hires with the state
- You must also register for Workers' Compensation Insurance with the Nebraska Department of Insurance
- You will also file as an employer for Unemployment Insurance with the Nebraska Department of Labor
Taxation for a Nebraska LLC
You will be subject to both state taxes and federal income taxes. This is a job for your accountant, but here is a brief outline of your tax obligations.
You may choose one of several different tax designations for your LLC, including C or S-corporation, partnership, or pass-through organization with personal liability for the members. Consult with your accountant for the best approach.
If you have employees, you must file to receive an IRS Federal Employer Identification Number (FEIN) on the Internal Revenue Service website. You must also apply for your FEIN if the LLC has more than one member. You will be subject to all federal tax-withholding rules.
LLCs also have particular requirements for filing taxes.
Nebraska LLCs must file a biennial report with the Secretary of State in odd-numbered years to remain in good standing.
Need Help Forming an LLC in Nebraska?
Fortunately, forming an LLC can be a straightforward process with FindLaw’s Business Formation Service. If you have questions about starting a Nebraska LLC or would simply like some guidance from a professional, it's best to speak with an experienced business organizations attorney near you.
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