How to Start an LLC in Nebraska (August 2024 Update)

Starting a business can be an exciting yet daunting process. One of the first major decisions you need to make is choosing the legal structure for your company. A popular option for small business owners is forming a limited liability company, commonly known as an LLC. LLCs blend elements of partnerships, sole proprietorships and corporations to provide business owners with personal liability protection while retaining taxation flexibility.

If you’re considering starting an LLC in Nebraska, this comprehensive guide will walk you through the steps from start to finish. We’ll look at the benefits of an LLC structure, the state-specific formation requirements, the ongoing maintenance necessities, and answers to frequently asked questions about LLCs in Nebraska.

What is an LLC?

A limited liability company is a business structure that combines aspects of a corporation and a partnership or sole proprietorship. Like with a corporation, LLC owners (called “members”) are not personally responsible for business debts and liabilities. This personal liability protection extends to all members regardless of company ownership structure.

LLCs also provide more flexibility in management and taxation than a traditional corporation. While corporations require formal processes and protocols, LLCs can be more relaxed in their operations. LLC members can actively participate in daily business activities, avoiding the corporate red tape.

In taxation, LLCs default to “pass-through” status with profits and losses passed to the members’ personal tax returns. There is no taxation at the business entity level. LLC members can pay taxes at individual income tax rates, avoiding the double taxation some corporations face.

Benefits of Forming an LLC in Nebraska

There are many good reasons to set up an LLC in the Cornhusker State. These include:

• Limited Personal Liability – Members cannot be held personally responsible for financial or legal liabilities arising from the business. This protection extends to all members regardless of percentage ownership.
• Taxation Flexibility – LLC income and expenses pass-through to members’ personal returns. This avoids business-level taxes and allows members to pay at individual tax rates.
• Credibility and Professionalism – The formal registration process promotes credibility with customers, vendors and lenders. Including “LLC” conveys professionalism and legitimacy.
• Flexible Management – LLCs can choose centralized, top-down management or decentralized, consensus-driven management. Responsibilities can be handled directly by members or hired managers.
• No Residency Requirements – LLC members, owners and managers do not need to live in Nebraska. Even registration agents can live out-of-state by designating a physical street address in Nebraska.

Nebraska Steps for Starting an LLC

Forming an LLC in Nebraska involves several key steps, though the process is fairly straightforward. Here is an overview of what’s required to establish an LLC in the state:

• Choose a Business Name
• Select a Registered Agent
• File Certificate of Organization
• Draft an Operating Agreement
• Obtain an EIN
• Publish Notice of Intent
• Remain Compliant and Maintain Records

Let’s look at each step in more detail.

Step 1: Choose an Available Business Name

The first step to creating an LLC is choosing a business name. There are a few key naming guidelines in Nebraska to keep in mind:

• The name must include the phrases “limited liability company”, “limited company”, or abbreviations LLC or LC at the end
• The proposed name cannot already be registered to another company in Nebraska

You can search names online to ensure statewide availability. You also want to consider registering your own URL that matches the business name.

If you aren’t ready to formally create the LLC, you can reserve a name for up to 120 days in Nebraska for a $15 fee by filing an Application for Reservation of Limited Liability Company Name.

Step 2: Assign a Registered Agent

Nebraska requires all LLCs to designate a registered agent qualified to accept official documents like summons, subpoenas or correspondence from the Secretary of State on behalf of the company. This agent must be reachable during normal business hours at a physical street address in Nebraska.

You have a few options when choosing someone for this important role:

• Yourself or a family member
• Existing company member or manager
• Third-party registered agent service companies

Many businesses prefer to outsource this role to a professional company that specializes in registered agent services. This provides an additional layer of protection for company owners and members.

Step 3: File Certificate of Organization

The formation process formally begins by filing Articles of Organization (often called a Certificate of Organization) with the Secretary of State. This registration serves as the legal birth certificate of your Nebraska LLC.

There is no standard state form, but your Certificate of Organization must include:

• Proposed company name
• Physical and mailing addresses
• Registered agent’s name and complete street address
• The member(s) signatures
• Any professional services the company may provide

You can submit the Certificate by mail or file digitally through the SOS website. Processing times vary but electronic submissions are generally approved within 1-2 business days.

The filing fee differs depending on how you submit:

• Online filing: $100
• Paper filing: $110

Step 4: Create an Operating Agreement

While not legally required, it’s highly recommended for Nebraska LLCs to establish an Operating Agreement. Think of this as your company’s internal constitution that lays out operational processes, financial considerations, ownership parameters, member responsibilities and more.

Having documented guidelines and processes helps resolve disputes, aids in strategic planning and protects the business if a member leaves. It also ensures you comply with formalities required to maintain liability protections under law.

The Operating Agreement details topics like:

• Member percentages & contribution amounts
• How taxes and profits/losses are handled
• Member voting rights & decision making processes
• Rules around owning/transferring interest
• Manager roles and responsibilities
• Amendment procedures
• Continuity guidelines if a member dies or departs

Step 5: Obtain an EIN from the IRS

Once your Certificate of Organization is approved, you should obtain a Federal Employer Identification Number (EIN) from the IRS. An EIN serves as a Social Security Number for your business and is required if you plan to:

• Hire employees
• Open a business bank account
• Apply for business licenses/permits

As a new LLC, you can easily apply online and receive your EIN instantly. There is no fee to obtain one.

Step 6: Publish Intent in Local Newspaper

Within 45 days of forming your Nebraska LLC, state law requires publishing a Notice of Organization locally for three consecutive weeks. This public announcement serves to officially notify the public that your LLC intends to conduct business in Nebraska.

The newspaper must meet these qualifications:

• Be located in the county where your LLC’s designated office is registered OR
• If no in-state office, publish in county where registered agent is located

After successfully publishing for three weeks, the newspaper sends you a proof of publication affidavit. You are then required to file this affidavit with the Secretary of State to fulfill this mandate.

Step 7: Remain Compliant & Maintain Records

With the initial formation process completed, there remain a few ongoing tasks to keep your LLC legally compliant and protected:

• File Biennial Reports – This report confirms basic identifying details about your LLC and must be submitted electronically every two years in odd years by April 1st.
• Open a Business Bank Account – To help track finances and maintain liability protection, deposit LLC funds into a dedicated business account.
• Stay Organized – Maintain thorough records related to your Certificate of Organization, Operating Agreement, EIN verification and meeting minutes.
• Pay Taxes – LLC income passes through to members’ returns, so pay estimated quarterly taxes and file annual income taxes.

What To Do After Starting Your Nebraska LLC

Congratulations, you did it! With the legal formation completed, here are some next steps to consider as you begin LLC operations:

Open a Business Bank Account

Establish a business checking account to accept client payments and pay vendors. This will simplify accounting and maintain separation of business and personal finances. Be sure to shop around as account fees can vary widely.

For more information, take a look at our article on the key benefits of business checking accounts.

Set Up Accounting Software

Using dedicated small business accounting software or apps makes managing company financials much easier. Select software like Quickbooks or Xero that meets your budget and expertise level.

Obtain Necessary Business Licenses

Research if your Nebraska LLC needs additional local, state or federal business licenses or commercial permits to operate legally. Common examples include general business licenses, food handler permits and professional licenses.

Define Roles & Responsibilities

Formally outline the roles, processes and workflows necessary for your company to function smoothly. Clarify who leads key initiatives and how decisions get made in areas like HR, marketing, accounting and operations.

Consider Extended Insurance Coverage

Review existing insurance policies and account for any new risks facing your particular business. Common policies like general liability insurance and professional insurance protect your new LLC.

Develop Marketing Assets

Create logos, brand guidelines, sales sheets, websites and other external-facing assets to market your company professionally with a unified brand.

Issue Membership Ownership Certificates

Formal certificates denoting member ownership percentages serve as valuable records and reinforce each member’s stake in the company. Some banks require these for business accounts too.

FAQs About Starting and Running Nebraska LLCs

Let’s explore answers to some of the most frequently asked questions surrounding Nebraska LLCs:

How much does it cost to form an LLC in Nebraska?

The state charges a one-time $100 filing fee to register your Certificate of Organization, regardless of whether you submit online or by mail. You can reserve an LLC name for 120 days for $15, which could save you money if still finalizing details. Ongoing costs include a $13 Biennial Report submitted every two years.

Does my LLC need an Operating Agreement in Nebraska?

No, Operating Agreements are optional and do not get filed with any state agencies. However, they are highly recommended to outline internal processes and procedures for your LLC. This helps avoid disputes by clarifying rules and expectations upfront.

What are the continuing filing requirements?

Nebraska requires LLCs to submit Biennial Reports to the Secretary of State in odd-numbered years by April 1st. This form confirms your company remains active and up-to-date on any changes to key details. The $13 fee applies each period.

Does Nebraska allow single-member LLCs?

Yes absolutely. The process for forming a single-member LLC is the same as forming a multi-member LLC. Single-member tax treatment also provides additional flexibility for simpler pass-through personal returns.

Can I form a professional LLC in Nebraska?

Those who offer services requiring a state license, like doctors, CPAs or architects, must establish a Professional LLC (PLLC). Additionally, all members must be licensed professionals in that field. Unique suffix designations also apply based on your regulated industry.

How do I transfer LLC ownership in Nebraska?

Updating LLC ownership requires amending your original Certificate of Organization along with revising the company’s Operating Agreement. Some banks also require a “Change of Member” resolution document to update account signers.

Conclusion

Starting a small business as a Nebraska limited liability company offers many advantages – like personal liability protection and pass-through taxation. Forming an LLC does not need to be overwhelming either using the seven steps outlined here. Furthermore, clearly documenting rules and processes in an Operating Agreement places your company on solid legal footing from day one.

With a little time and effort upfront to complete these filings, while also focusing on longer-term best practices, your Nebraska LLC will be well positioned for smooth operations plus withstand any legal scrutiny down the road.

If the compliance obligations ever feel burdensome, or you want help completing filings, third-party registered agent service providers can assist with meeting Nebraska requirements so you can focus on your passion of growing the actual business!