There are many reasons to form a corporation in Nebraska. The state has quite a few interesting industries and is also a major producer of soybeans, corn, pork, beef, and sorghum in the agricultural sector.
Additionally, Nebraska drives important revenues in other sectors such as manufacturing, freight transport, telecommunications, etc.
The following step-by-step guide will show you how to start a corporation in Nebraska.
1. Select a name for your corporation
Irrespective of the type of corporation you’re forming, the first step in the process is deciding on a Nebraska corporation name. Additionally, the name needs to adhere to state naming requirements in Nebraska.
General corporate name guidelines
Use the following Nebraska state naming requirements when deciding on your business name:
- Your Nebraska corporation name cannot suggest that the business is formed for any illegal or unlawful purpose
- Your Nebraska corporation name must imply that it is formed for the purposes outlined in the company’s Articles of Incorporation
- The name cannot resemble any other existing businesses in the state. Nebraska reserved names apply as well.
- Your Nebraska corporation name must include the word Corporation, Inc., company, limited, or abbreviations of these words
Nebraska business naming guidelines will come in handy, so feel free to refer to the Nebraska state statute.
Trademark
Trademarking your Nebraska corporation name protects it from intellectual property misuse and theft. Additionally, it ensures that no other business will be able to transact under your Nebraska corporation name. The best way to register a trademark is to submit an application on the US Patent and Trademark Office’s website or www.uspto.gov.
Entity name
Every business has a legal name. The legal corporation name is what the federal and state governments use to identify your business. This is also referred to as an entity name.
DBA (Doing-business-as) name
If you’d like to conduct business under a separate name from your entity name, then it is required by law that you register a DBA in Nebraska. You can start with a Nebraska DBA name search on the Nebraska Secretary of State website. Once you’ve established that the DBA name is indeed available, then you may go ahead and register your Nebraska DBA. You can file an online application with the Secretary of State’s Corporate Document eDelivery website. Alternatively, complete the application for registration of trade name Form and have it mailed to the Nebraska Secretary of State.
2. Nominate a registered agent
It’s not only necessary that you have a Nebraska resident agent for your corporation is also a legal requirement in the state. This is because a resident agent serves an important purpose which is to accept service of process, compliance documents, and government correspondence on your business’s behalf.
Therefore, you need to nominate a resident agent to legally form your corporation in the state. Resident agents can be natural persons or individuals; however, they need to meet a few requirements such as:
- Your Nebraska resident agent will need to be off the legal age, which is 18 years old or older
- Your Nebraska resident agent will need to maintain availability during usual business hours
- Your Nebraska resident agent will need to have a physical address in Nebraska or be a citizen of the state
- Your Nebraska resident agent will need to consent to the appointment
3. Appoint initial directors at the organizational meeting
Your Nebraska corporation is required to have a Board of Directors or at least one corporate director. The role of the corporate director will be to oversee the operations of the business pending the first shareholders’ meeting. The corporate director is responsible for the repealing, amending, and adopting corporate bylaws, along with removing, supervising, and electing corporate officers.
The election of the corporate director should be done during the corporation’s first organizational meeting. Additionally, some other tasks that should be completed during this meeting include creating and ratifying bylaws, determining the corporation’s share structure, and executing an incorporator’s statement.
4. File Articles of Incorporation
Your Nebraska corporation is only legally formed once the Articles of Incorporation are filed. The Articles of Incorporation, which is also referred to as the Certificate of Incorporation, must include relevant information pertaining to your corporation. Therefore, include the following basics in your articles:
- An indication of where your corporation will be issuing more than one approved series or share class
- The incorporator’s address and name
- The number of shares the corporation intends on issuing and the par value
- The corporate registered agent’s address and name
- The name of your Nebraska corporation
For additional requirements for completing the Articles of Incorporation, refer to the Nebraska state statute.
Once you’ve compiled the relevant information for the articles, go ahead and file it online with Nebraska’s Corporate Document eDelivery service.
If you’d prefer to have the articles mailed instead, then follow the Articles of Incorporation instructions to complete the Form and have it mailed to the Nebraska Secretary of State at the following address:
Nebraska Secretary of State
P.O. Box 94608
Lincoln, NE 68509-4608
A legal requirement in the state of Nebraska is publishing a notice of incorporation. You are required to publish a notice of incorporation in a legal newspaper that operates under the jurisdiction of your business’s principal office, once you’ve filed the Articles of Incorporation. Notice of incorporation must be done for three weeks in a row.
Additionally, the notice must include certain information such as:
- The physical address of the Nebraska corporation’s registered office, including the name of its registered agent based at the said office
- Your Nebraska corporation’s entity name
- The number of shares your Nebraska corporation will be issuing
- The street address and names of incorporators
5. Create and approve bylaws
Although corporate bylaws are not a legal requirement, nor do they need to be submitted to the state, they are still essential for the effective running of a corporation.
Therefore, bylaws must be created and approved to ensure that there is a process and a procedure for handling any and all possible situations that may arise within the corporation. Additionally, the bylaws must be clarified for members within the organization so that everyone is on the same page about the priorities of the corporation.
6. Select a share structure
Shares are often structured into classes which are termed, share classes. Additionally, the share classes hold different privileges and rights. An organization may have multiple classes, and each class may hold any number of shares. A share of stock is basically a unit of ownership of a corporation.
Therefore each share of stock represents the percentage of ownership of the corporation. For example, if your corporation issues stock in the form of one share of stock to a stock owner or shareholder, then that individual now owns a hundred percent of the corporation.
7. Obtain an EIN
Obtaining an EIN is one of the essential steps in forming your Nebraska corporation. This is because your EIN will allow you to complete a number of steps both before and after formation, such as opening up a business bank account, completing paperwork for tax purposes, and hiring staff for your corporation.
EINs are assigned by the federal government or Internal Revenue Service. It is used as a way to identify businesses in every state and functions as a Social Security number for your corporation. Obtaining an EIN is completely free of charge.
In order to obtain an EIN, you can apply online on the IRS website, or you can download the EIN Application Form and have it mailed to the Internal Revenue Service at the following address:
Internal Revenue Service
Cincinnati, OH 45999
8. File Nebraska state taxes
Depending on the type of business entity you’re forming or your business structure, your Nebraska corporation may be liable for one or more corporate taxes:
- Nebraska sales tax: All Nebraska corporations that are selling physical products will need to obtain a seller’s permit from the Nebraska Department of Revenue’s website. The seller’s permit is essentially a certificate allowing businesses to collect sales tax on goods that are taxable.
- Corporate income tax: All Nebraska corporations are liable for Nebraska’s corporate income tax. Additionally, you are liable for corporation occupation tax every other year.
- Nebraska employer taxes: Every corporation that’s hiring employees will need to apply for Nebraska employer taxes via the Nebraska Department of Revenue’s website.
9. Nebraska business licenses and permits
Irrespective of whether you’re forming a small business of a large corporation, the following licenses and permits may be applicable to your Nebraska corporation.
- Seller’s permit: The sales tax permit is the only state-level license in the state of Nebraska. It’s also called a seller’s permit and needs to be obtained if you engage in business in Nebraska. It’s also necessary if you plan on selling or leasing products and services that would ordinarily be subject to sales tax if sold on the retail level.
For more information on acquiring a seller’s permit, visit the Department of Revenue website.
- Professional license: Professional corporations may require specific licenses in order to offer their services legally in the state. For more information on this, refer to the Nebraska One-Stop License and Inspection Portal, which contains all of the relevant applications and information you require.
10. Annual report requirements in Nebraska
Corporations in Nebraska must file a biennial report. This report must be filed every even-numbered year by the 1st of March with the Secretary of State . You’re free to file the report online using the state office’s online filing system.
11. Costs of starting a corporation in Nebraska
The filing fees below apply to all Nebraska corporations:
- Name reservation: $15
- DBA name: $100
- Articles of Incorporation: $65
- Annual report: $55
- Nebraska Certificate of Good Standing: $10
Next steps after forming a corporation
After forming your Nebraska corporation, there are steps you need to take in order to maintain your business and keep it running smoothly:
Get business insurance
Obtaining business insurance for your Nebraska corporation is compulsory as it protects your personal assets and your company from unexpected and costly events such as natural disasters or personal injury claims. Speak to an insurance consultant to help you explore the different packages or coverage options available such as general liability insurance, to protect your business from claims relating to property damage or bodily injury.
Open a business bank account
Irrespective of the type of business you’re running, it’s necessary to separate your business finances from your personal ones. It makes it easier to track your income and expenses and also file tax returns, etc. A separate bank account is also necessary when it comes to maintaining your personal liability protection.
FAQs
When forming a C Corporation, or C Corp. you’ll experience a number of advantages, including limited liability protection, corporate tax benefits, appeal to investors, unlimited capital generation, and a more formal management structure.
C corporations are owned by stockholders and are subject to double taxation. S corporations share some similarities with C corporations; however, they enjoy pass-through income for tax purposes, so they are not liable for double taxation. Professional corporations will generally need a licensed individual, and nonprofit corporations are formed for public benefit rather than profit.
An LLC or limited liability company is a corporation and a partnership hybrid. So while it affords business owners the liability protection of a corporation, it also provides the tax advantages of a partnership. A sole proprietorship is a small business with no employees and is also one of the easiest and cheapest businesses to form.
An SLE or separate legal entity, as it is often referred to, pertains to a type of legal entity with detached accountability. Some examples of separate legal entities include limited liability companies and corporations.
Corporate records must be maintained for a minimum of seven years. Corporate records include a copy of your Articles of Incorporation, bylaws, minutes of shareholder and director meetings and stock register, etc.
