This guide on starting an LLC in Nebraska will go through the necessary steps and some recommendations involved. A limited liability company (LLC) is a way to legally structure a business. It provides the limited liability protection as with corporations, but requires far fewer formalities, as with sole proprietorships.
These advantages make LLCs a popular choice with entrepreneurs. However, it’s worth keeping in mind that LLCs can be put to use for other purposes as well. For example, an LLC may hold assets like real estate, vehicles, etc.
So let’s get into the steps to follow when starting your Nebraska LLC.
1. How To Choose A Name For Your Nebraska LLC
If you’re starting an LLC, you probably have a name already in mind. But, things can’t be as simple as that, so there’s some due diligence required.
Nebraska requires LLC names to be unique and distinguishable. That means you can’t have the same name as an entity already registered in the state. Moreover, the chosen name shouldn’t be confusingly similar to a previously registered name.
Names shouldn’t imply the functioning of an LLC beyond its legal mandate. For example, since the LLC isn’t a corporation, it can’t have the word corporation in its name. Similarly, it can’t have a name that confuses it with a government agency or department.
One quick way to check for name availability is the use of the Nebraska Secretary of State’s Business Name Database. This is useful in deciding name availability. Once you have a couple of options, you can contact the Secretary of State’s office with a written request to check name availability. The contact options are:
Fax: (402) 471-3666
Mail: P.O. Box 94608, Lincoln, NE 68509-4608
Nebraska LLC Name Designators
Nebraska LLCs must end their names with a proper designator. The state has a list of acceptable designators. These are:
- Limited Liability Company
Name Reservation Request (Optional)
You may choose to reserve a name for your Nebraska LLC without forming the company. Here’s how to go about it.
On the Name Procedures page on the Secretary of State website, go to the section titled “Procedures and forms for name reservations of corporate entity names”. Under this section, you’ll find the pdf form for “Application for Reservation of Limited Liability Company Name”.
The completed form, along with the $15 filing fee should be submitted to the office of the Secretary of State. Once approved, the name reservation is valid for 120 days.
2. Appoint A Registered Agent
All Nebraska LLCs must have a registered agent in the state. This agent is responsible for receiving service of process on behalf of the LLC. Generally, this includes legal requirements like lawsuits, summons, subpoenas, etc.
Any person or business entity can be your registered agent in Nebraska. The person taking on this role must be a legal, adult resident of the state. If a business entity takes on that role, it must be authorized to do business in Nebraska and have a physical office in the state.
The latter option also includes commercial registered agents, which is a very popular option with many people. This is because hiring commercial agents is simpler and more convenient.
3. Forming An LLC In Nebraska – Certificate Of Organization
Submitting the Certificate of Organization to the Secretary of State is the biggest step to forming an LLC in Nebraska. A Nebraska LLC comes into existence once the Certificate of Organization is approved by the state.
Nebraska Certificate of Organization is analogous to the Articles of Organization used by several other states.
You can submit the Certificate of Organization online or via mail. Both methods are broadly similar, except for the way you submit the form. Nebraska doesn’t provide a specific form filing the Certificate of Organization.
Necessary details like LLC name and address and the registered agent’s name and address must be included in the certificate. You may use the services of a lawyer to include any additional details necessary.
Once the document is ready, you can send it via mail, or scan and upload it for online processing. The mailing address is:
Secretary of State
PO Box 94608
Lincoln, NE 68509-4608
If you choose to mail the documents, remember to include two copies of the completed Certificate of Organization. These should be accompanied by a check or money order for the filing fee payable to the “Secretary of State”.
The cost of filing the Certificate is $105 (if sent via mail). A minimum of $2 additional charge is included for each online transaction. So, you can expect the online filing to cost at least $107.
Once the document is submitted, how long does it take for approval? Filings made online are usually processed within 2-3 business days. Certificate filed through mail can take 4-5 business days after it has been received by the office of the Secretary of State.
4. Nebraska LLC Operating Agreement
Nebraska doesn’t legally require operating agreements for LLCs. However, you should get this agreement for your company.
An operating agreement is immensely helpful in laying out the groundwork, procedures, and processes for functioning of an LLC. Additionally, it can make management easier by laying out necessary roles, responsibilities, and voting powers for members.
While this is very relevant for multi-member LLCs, single-member LLCs should put an operating agreement in place too. These can come useful in several situations, including if your LLC finds itself in a court of law.
5. Nebraska Publication Requirement
Nebraska is one of the few states that have a publication requirement for the LLCs. Any newly-formed LLC in Nebraska must publish ads in a “legal newspaper” (Notice of Organization) for three consecutive weeks.
The newspaper running these ads must have circulation in the county where the LLC has its primary office. In case the company doesn’t have an office, the county of the Registered Agent’s address location can be the one where the newspaper is circulated.
Once the run of the ad is complete, the newspaper will supply you with an Affidavit of Publication. You’ll have to submit this affidavit to the Secretary of State. This can be done by sending it via mail, or by uploading it online.
The filing fee for the affidavit is $10, with an additional $5 per page.
6. Employer Identification Number or Federal Tax ID
The IRS issues a 9-digit Employer Identification Number (EIN) to companies. There is no filing fee for this number and it can be received almost instantly by filing for it online.
In circumstances where the LLC is owned by another entity or if the person filing it doesn’t have an SSN, the online application doesn’t work. For these, or other situations that prevent online filing, you’ll have to submit Form SS-4.
It’s possible to submit this form via fax or mail. Using fax is a better option and sees the processing complete in a few business days. If submitted via mail, the process can take a few weeks.
The EIN is handy not just for taxation, but also for day-to-day operation of the LLC. These include getting a business bank account, business credit cards, building credit with vendors, and so on.
7. Filing Nebraska LLC Biennial Reports
Every LLC in Nebraska must file biennial reports with the state. These reports are filed every odd-numbered year, except in the year when the LLC was formed. For example, if an LLC was formed in 2019 or 2020, it must file its first biennial report in 2021. The next report will be in 2023, and so on.
Biennial reports must be filed between January 1 and April 1 of the filing year. Usually, the LLC’s registered agent will receive a reminder notice from the state for filing the report. This notice also includes the filing fee.
Currently, the filing fee for the report is $10 ($13) if filed online. Interestingly (and weirdly), if you’d like to download a copy of the filed and approved report, the state charges you $0.45.
8. Permits, Licenses, And Taxation
Broadly speaking, the requirements of business licenses and permits depends on:
- Where your business is located.
- Specific industry of your LLC.
This requires being in the green with the three layers of governance, them being local, state, and federal. The city/county of operation of your business may have specific requirements on licensing, permits, and taxation.
Similarly, the state may apply taxes or require permits from businesses operating in a specific industry. You might have to register with Nebraska One-Stop Business Registration Information System to check for required licenses and permits for your Nebraska LLC.
The state’s resource page on Business Licensing Application and Renewal is useful for the application and renewal of business license permits.
For federal taxation, the IRS sees LLCs as pass-through entities by default. This means the income/profits from the company are reported as part of your returns filed with the IRS. However, the requirements can change slightly depending on whether you have a single-member or multi-member LLC.
Additionally, LLCs may choose to be taxed as C-corps or S-corps. These will require additional formalities to be completed and change the tax structure of the Nebraska LLC.