- Get to know why Nebraska is an ideal place for starting your business venture
- Muster a clear understanding of the rules and regulations of forming Nebraska Corporation
- Get to know why registered agents are essential for business formation and how to appoint them
- Gather an understanding of the critical requirements, Nebraska permits, compliances, and more
Overview of the benefits of forming a corporation in Nebraska
The benefits of forming a corporation in Nebraska are numerous. Easy transfer of ownership, limited personal liability, business continuity, better access to the capital city (although it depends on the location), occasional tax benefits, improved quality of life, and access to a job-ready workforce in the service sector, both blue-collar and white-collar occupations. Additionally, Nebraska is a state that efficiently incorporates opportunity and a progressive environment within a fruitful budget.
Importance of understanding state-specific requirements
It is always required to clearly understand and have ample knowledge about the legal procedures and documents needed. As an initial step toward the incorporation process in Nebraska, you need to register with the Nebraska Department of Revenue for any business that involves retail sales, employee engagement, and renting or leasing of tangible personal property. Similarly, there are quite a few such registrations to be done and permits to be obtained for the authentic functioning of your business. Continue reading to know further about the same.
Choosing a Business Name
One of the essential tasks while forming a corporation is selecting a business name. An easy-to-remember name with uniqueness plays a cardinal role in better business reach and improved retention of names among the target population.
Name availability and reservation process
The name reservation process starts after fixing a name for your corporation in Nebraska. Some people take help from company name checkers and business name generators for convenience and for finding names with web-space availability. Below mentioned are the procedures for filing corporate entity names:
Name reservations must be submitted in writing to the Secretary of State Office. A nominal fee of $30 has to be paid at the office. On approval of your business venture's name, entity documentation must be filed within 120 days. Also, name reservation helps protect your preferred entity name during filing and documentation procedures.
Corporate name requirements and restrictions
While choosing a name for your corporation in Nebraska, it is required to add "incorporated," "corporation," "limited," or "company" with the company name. By paying a nominal fee of $30, your corporate names can be saved for about 120 days (ideally the time period to get the documentation done)
Considerations for a fictitious business name or DBA
DBA refers to "Doing Business As," and it is used when corporations want to or do run their company under a name other than their legally registered name. This fictitious or assumed business name is popularly known as a "trade name" in Nebraska. The trade name is unnecessary, but the concept is helpful when the company name is unavailable as a domain name.
Appointing a Registered Agent
A registered agent is a person or an entity appointed by the business corporation to be the official point of contact with the government in the state.
Role and responsibilities of a registered agent
The registered agent is liable for receiving the service of process, legal documents, documentation, and other official communications on behalf of the business corporation.
Three primary responsibilities of the registered agents:
- Be the recipient of services
- Be the corporate liaison
- Be the official person of contact
Choosing a qualified individual or professional service
You need to be careful while choosing your registered agent in Nebraska. Selecting a registered agent who can be a person or entity who is a resident of the state or a qualified business entity in Nebraska is mandatory. Additionally, from the vast set of options you are left to choose from, finalize after thoroughly studying the registered agent services, their professional qualifications, and industry experience for your company's better functioning.
Registered agent requirements in Nebraska
Specific requirements you need to check for in your registered agent are as follows:
- Confirm that your registered agent is a resident of the state
- Confirm that your registered agent is authorized to transact business in the state
- Your registered agent is well-versed with corporate and tax laws and also is available to receive legal documents during business hours
- Has a registered office in the state with proper address proof
Preparing and Filing Articles of Incorporation
Articles of incorporation are a set of legal documents prepared and filed with government bodies to document the corporation's establishment legally.
Information required in the Articles of Incorporation
Articles of incorporation essentially cover basic details like the ones mentioned below:
- Firm's name
- Information on the type of business
- The Business structure
- The amount invested
- The type of stock to be issued
- Contact details of the in-state registered agent
Optional provisions to include
Apart from the usual mandatory details, some of the optional provisions to include in the articles of incorporation in Nebraska are as follows:
- Rights of stockholders in terms of the purchase of shares
- Rights of the company in terms of buying their shares of stock
- Corporate Bylaws
- Exceptional management provisions for the corporation affairs
Filing fees and submission process
Articles of incorporation in Nebraska need to be filed with Nebraska's Secretary of State. You can file the articles in person or online in their official portal.
The filing fee is based on the following factors:
- Type of your business entity
- Total number of pages in the document
- Amount of your company stock that will be issued
However, the filing cost depends on the above-said factors; the minimum filing fee is $15.
Expedited processing options
Expedited processing is when your applications are responded to faster than the standard time on special requests. Expedited processing is beneficial in times of emergency.
In Nebraska, expedited filings are unavailable through the mail and online methods. However, there are walk-in expedited filing options. You need to contact Nebraska's Secretary of State to file the same.
Creating Corporate Bylaws
Corporate bylaws are a set of information regarding rules and regulations of the functioning of the corporation. In layman's language, corporate bylaws are nothing but the user manual of a business corporation.
Purpose and Significance of corporate bylaws
The corporate bylaw contains all the information required for the smooth functioning and conduct of the corporation. The bylaws include all the provisions and knowledge essential for managing the business and various corporation affairs.
Key components to include in bylaws
Below mentioned are the key components of information that need to be mandatorily mentioned in a corporate bylaw while forming a corporation in Nebraska:
- Information on the board of directors
- Information on how the board of directors is selected and about their functional period
- Information about the management structure
- Information about the company structure
- Information on business share structure and shareholders
- Information on contracts and loan approvals
Customizing bylaws to suit your corporation's needs
Corporate bylaws can be customized to suit your corporation's needs by carefully understanding the motives and setting goals. Additionally, being inclusive for smoother functioning and collective goodness can help draft efficient and custom-made corporate bylaws.
Organizing the Initial Board of Directors
The board of directors refers to an elected panel of members in an organization representing the company's shareholders and holding other high-order positions.
Selecting board members and establishing roles
While selecting the initial board of directors, below mentioned are the criteria to look for:
- Expertise in the field
- Leadership quality
- A problem solver
- Time and energy to devote to board meetings
- Nature of commitment to the business
After selecting the initial board of members, their positions are officially established in the Nebraska corporation through the first board meeting and by adding their names to the documents.
Setting the terms and conditions for board members
Terms and conditions for the board members are established concerning the details given in the corporate bylaws. Additionally, rules and regulations, as mentioned in the articles of incorporation, are also taken into action.
Conducting the initial board meeting
Initial board meetings are conducted after setting a comprehensive agenda and goals. Extra care and precautionary methods are also taken to ensure the success of the first board meeting of the corporation. Aspects like budget and plans for the year are discussed and finalized in the board meetings.
Issuing Stock and Establishing Share Structure
Issuing Stock and Establishing Share Structure means giving elaborate details and finalizing partial ownerships. It also clarifies the share structures and details on the formerly private company and money exchange.
Authorized shares and share classes
Authorized shares are details on the maximum number of shares a business can issue, as mentioned while filing the articles of incorporation.
Stock issuance process
Issuance of stock refers to the maximum number of shares a business can issue to its shareholders.
Below mentioned are the process for stock issuance:
- Understanding the funding needs
- Getting an appointment with an underwriter
- Getting input from the financial advisor
- Deciding on the offer structure and pricing
- Creating a marketing strategy
- Preparation of marketing prospectus
- Collecting the receipts of funds
- Seeking approval from the stock exchange
Regulatory compliance and record-keeping
Verifying the company records and monitoring the retention of records marked by law is termed regulatory compliance. It is necessary to check for the latter for the smooth and hassle-free functioning of your organization in the future.
Obtaining Necessary Licenses and Permits
To form a corporation in Nebraska, obtaining specific licenses and permits is mandatory, depending upon the type of business entity you own.
Federal, state, and local licenses and permits
To form a corporation in Nebraska, you must file for a sales tax permit called a seller's permit.
Below mentioned are the available options for filing a seller's permit:
- Apply online through the official website of Nebraska's revenue department
- Apply via mail (Mailing Address: Nebraska Department of Revenue. P.O. Box 98903. Lincoln, NE 68509-8903.)
- Apply via fax (Fax: (402) 471-5927.)
Federal licenses and permits are required for starting up a corporation in the following business sectors:
- Alcoholic sales, serving, distribution, or importing
- Firearms, ammunition, and explosives
- Fish and wildlife
- Commercial fisheries
- Maritime transportation
- Mining and drilling
- Nuclear energy
- Radio and television broadcasting
Ongoing license renewal and maintenance
Nebraska license renewals are usually down biennially (every two years). Corporations in Nebraska need to publish a notice of incorporation amendment for the same procedures. The notice paper should mention all the details of corporation names, authorization details, and complete information on the share structure, the street address of the corporate's registered office and contact details of the registered agent.
Complying with Nebraska Tax Requirements
Certain taxes must be filed with the Revenue State Revenue Department of Nebraska to run your corporation in Nebraska.
Federal Employer Identification Number (EIN)
EIN, or Employer Identification Number, is a unique identification number assigned to every business entity by the revenue department for easy identification. The EIN is usually a 9-digit number. EINs can be applied through their official website.
State tax registration and requirements
Seller's permit is the mandatory state tax in Nebraska, and the same can be applied either through online mode, offline mode or via fax:
- Online mode: Official portal."
- Offline mode: Mail it to "Nebraska Department of Revenue, P.O. Box 98903, Lincoln, NE 68509-8903
- Fax ID: 402-471-5927
Sales and use tax, and other applicable taxes
Below mentioned are the details on the different tax rates in Nebraska:
- Income tax: 2.46% - 6.84%
- Sales tax: 5.50% - 10%
- Property tax: 1.51% average effective rate.
Annual Reporting and Ongoing Compliance
Annual reporting refers to the detailed record of the corporation's financial and operational functions of the past year.
Nebraska Annual Report filing
Maintaining a detailed annual report is essential for the company's good status and solid existence. The annual report is filed with Nebraska's State of Organization, and the four components of the annual report are as follows:
Brief description of the business and industry
- A letter to the shareholders
- A report showing balance sheets, income statements
- Foolproof statement of cash flows
Maintaining corporate records and minutes
For future reference and authenticity, it is advised and mandatory to maintain corporate records and minutes of all meetings.
Here are some practical ways to record the minutes of the meeting:
- Note down the details on the name of the company, day and time of the meeting
- Mention the type of the meeting (annual, quarterly, etc)
- Note down the details of the person chairing the meeting
- Write down the attendees
- Note down the agenda of the meeting
- Mention the discussed points and details associated with the same
Staying informed on changes in state requirements
Like the funding for running the corporation, it is equally important to stay informed on changes in state requirements. An efficient registered agent for your corporation makes this task easy.
Recap of the process of forming a corporation in Nebraska
Forming a corporation in Nebraska is never a tiring task when done systematically by following the below-mentioned steps:
- Fixing on a name after checking the uniqueness, and web-space availability
- Reservation of your business entity's name at the Secretary of State's office
- Appointing a registered agent after a thorough background check
- Preparing and filing Articles of Corporation
- Drafting of Corporate Bylaws
- Selecting the initial Board of Directors
- Hosting the first board meeting with a pre-set agenda
- Issuing of stock structure and establishment of share structures
- Applying and obtaining the required set of business licenses and permits in Nebraska
- Filing for necessary taxes
- Applying and getting for EIN
- Check for tax and other compliances
- Keeping up with the annual reports
- Maintenance of records
Resources and support for ongoing corporate success
- Nebraska Secretary of State - Official website
- Nebraska Department of Revenue- Official website
- Nebraska EIN Portal - Official website
We can help!
At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
We can help you start an LLC in Virginia. Learn more.
Like our content?
Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for early-stage founders navigating their start-up journeys.
Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.