Nebraska LLC Formation
Are you interested in forming a Nebraska limited liability company? A limited liability company (LLC) is a business entity that many small business owners favor for liability protection and pass-through taxation. Here is a step-by-step guide to setting up your Nebraska business as an LLC.
Steps to Form an LLC in Nebraska
Name Your LLC
Nebraska has a few requirements for naming your LLC. The name must be different than any other business name operating in Nebraska and have the ending "limited liability company" or an abbreviation such as:
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- Limited Company
- Ltd. Co.
The LLC name cannot use any variation of the word "corporation." It cannot use obscene language or claim a profession or business affiliation that does not exist.
Check the Secretary of State's Name Database. First, search the Secretary of State business entity search page to make sure that your chosen name isn't already in use by an existing company. 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.
Reserve Your Business Name. Nebraska allows you to reserve a business name for 120 days during your LLC formation process. Reserving a name is not a guarantee that your name will be approved, but it keeps anyone else from using it for that time. The name reservation fee is $30.
Protect Your Business Name. Next, make sure that no one else can use your business name. You can do this by reserving a domain name and/or trademarking your name.
- Domain Name. Do a name search on the internet to determine that your internet domain name is available. Registering the business domain name to protect your name is worth the nominal fee.
- Trademark. If you want to protect your trade name or brand, trademark the name with the United States Patent and Trademark Office (USPTO). Although it may take time and money, it will keep others from infringing on your brand. Once you receive your federal trademark, you can register it as a Nebraska trademark or service mark. You can also apply for a trademark or service mark directly with the Nebraska Secretary of State. You do not need a federal trademark.
Get 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 receives process (legal documents) on behalf of the LLC.
A Nebraska registered agent must be an individual or a company with a physical Nebraska street address. A registered office can't use a P.O. Box.
Because the registered agent must personally receive service at that registered address during business hours from 9 a.m. to 5 p.m., Monday through Friday, some business owners pay a registered agent service company to serve as the registered agent.
File Your Certificate of Organization
The Nebraska Secretary of State has an e-Delivery online business services portal. The portal allows you to download, complete and sign a certificate of organization for your LLC. You upload the certificate and pay the filing fees with a credit card. You can create a Nebraska.gov subscriber account if you think you will process more than one transaction. The cost to file a certificate of organization online is $100. If submitted in person, the fee is $110. There is a $2 convenience fee if using a credit card.
To start an LLC, your 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 is a professional LLC (PLLC), list the type of profession and the licensed members
- The effective date of the LLC
Business formation service companies can also reserve your business name and file the paperwork on your behalf.
Note, once you register your LLC there is a publication requirement in Nebraska. In Nebraska, all new LLCs must:
- Publish a notice of organization in a newspaper of general circulation near the company's principal place of business.
- Run the notice for a minimum of three consecutive weeks, after which the newspaper will send you a Proof of Publication.
- File the Proof of Publication with the Secretary of State.
Draft an Operating Agreement
An LLC operating agreement is similar to bylaws for a corporation. It sets forth the business structure and rules of how the LLC will operate. Nebraska does not require proof of an operating agreement; however, you may want to draft one for other reasons.
When opening a business bank account or taking out a loan, the bank may want to see your operating agreement and certificate of organization. Additionally, if you're going to attract new members or sell the LLC, you will need an operating agreement.
An operating agreement can be relatively simple and set forth:
- Members' names and their percentage of ownership
- Voting rights and when meetings occur
- Powers and duties of members and managers
- Profits and loss distribution methods
- Procedures for holding meetings
- How interest in the LLC is transferred (i.e., buyout, buy-sell agreements, transfer on death)
Get an EIN (Employer Identification Number)
You may or may not need to apply for a Federal Employer Identification Number (EIN) with the Internal Revenue Service. An EIN is a taxpayer identification number for your business similar to a Social Security number for a person. However, if you have employees, or the LLC has more than one member, the LLC must have its own EIN. You apply for the EIN on the IRS website.
Set Up Business and Tax Accounts
Any new business has state and federal obligations for registering the business and paying taxes. A Nebraska LLC is no different. However, in addition to the business registrations and tax accounts, Nebraska has two unique requirements:
- Publication Requirement. As mentioned above, all newly formed LLCs publish a notice of organization in a newspaper for three consecutive weeks. After the newspaper sends you the Proof of Publication, you file it with the Secretary of State.
- Biennial Reports. Nebraska LLCs must file a biennial report with the Secretary of State in odd-numbered years to remain in good standing. The fee is $25 if filed online or $30 if submitted in writing. The biennial reports are due on the odd-number years following your date of organization. However, check the fee schedule with the state because they might raise the rates during the two years.
When you start a business and hire employees you must pay taxes and withholdings. Additionally, depending on your business you need business licenses and permits.
State Business Tax
When you start a business in Nebraska, you may need to register your new business online with the Nebraska Department of Revenue. Your state taxes depend on how you structure your L.L.C. Single-member LLCs treated as "disregarded entities" for federal tax purposes have profits and losses reported on individual tax returns. This pass-through taxation is true as well for multi-member LLCs. If you elect your LLC to be a C-Corp, you pay a state corporate tax on LLC profits.
State Employer Tax
You must establish an employer account if you plan to have employees in your LLC. You can register online with the Nebraska Department of Labor. As an employer, you must:
- Withhold taxes – set up an income tax withholding account
- Pay unemployment insurance – set up an unemployment insurance tax account
- Carry workers' compensation insurance
Sales and Use Taxes
A sales tax applies if your company sells anything. The Nebraska sales tax is 5.5%. The purchaser pays the tax, and you, as the seller collect and remit the tax to the state. Register your business and set up a Nebraska sales and use tax account with the Department of Revenue.
Business License and Permits
Depending on the type of business, you may need to apply for specific business licenses or permits. Check the Nebraska business licensing website and your town and county offices to determine your requirements.
Registration in Other States
If you want to operate your LLC in another state, you must register your LLC to do business in that state as a foreign LLC and pay their state fees. You may also have to set up tax and employer accounts in that state.
To keep your Nebraska LLC in good standing, file the biennial reports. Nebraska LLCs must file a biennial report with the Secretary of State in odd-numbered years from the formation date of your LLC to remain in good standing. So, for example, if you formed your LLC in 2022, the next biennial report is due in 2023. If you created your LLC in 2023 or 2024, your next biennial report is due in 2025.
File the report anytime from January 2nd to April 1st of the biennial year. The filing fee is $25 to file online. Missing the reporting deadline will jeopardize your LLC, causing it to lapse.