You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees — before you sell a single product, there are startup costs associated with launching an LLC in Nebraska.
Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Nebraska startup fees here.
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Overall Nebraska LLC Formation Costs
LLC Name Reservation Fee
You may be considering reserving your business name while you prepare to start your LLC. Name reservation, however, is completely optional, so you should only apply for it if you aren’t ready to start your business. If you’re still waiting on paperwork or other delays and you’re worried someone might take your name, go ahead and mail or hand-deliver an application for $15. Otherwise, as long as you’re ready, the Certificate of Organization will register your name, so jumping straight to that filing will save time and money.
To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.
Whether you reserve your business name or not, you should always perform a Nebraska business name search to make sure the name you want is available.
Certificate of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Nebraska LLC. Without a Certificate of Organization on file, the state of Nebraska won’t recognize your LLC as a valid business, and you won’t be able to operate in the state. It’s going to set you back $100 plus a $5 recording fee for each page, but considering the significance of this filing, it’s money well spent. Plus, you only file the Certificate of Organization once, so you won’t have to make this payment again.
The information you’ll need to file your Certificate of Organization includes your LLC’s official business name, your LLC’s principal business address, the name and address of your registered agent, the effective date of your LLC formation (if applicable), professional services to be offered by your LLC (if applicable), and your name, title, and signature.
Business and Professional Licenses
Once your Certificate of Organization has been accepted, chances are that you’re ready to commence business in the state. But your business could potentially need to obtain certain licenses from the state or city before getting started. This all depends on the type and location of your LLC. For example, accounting firms need to acquire licensure from the Board of Public Accountancy, and electricians need a license from the State Electrical Division.
Additionally, certain cities and/or counties have their own licensure laws. Check with Nebraska’s business licensing page and your local government to determine which ones your LLC may need.
What are some of the most commonly required business licenses for Nebraska LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.
Online Incorporation Service
Starting an LLC in Nebraska can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an online incorporation service. These services take care of the registration process for you, so you don’t have to spend time on research, paperwork, and filings.
Most of these services (which are often frequently used LegalZoom incorporation alternatives) offer LLC registration services like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, operating agreements, and expedited filing.
Registered Agent Service
Appointing a Nebraska registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Nebraska business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2,000.
Cost variations depend on the experience and location of the lawyer. With the number of business lawyers to choose from, finding the right one can seem intimidating. But if you use a site like Avvo, which provides access to a whole database of Nebraska business attorneys, you can compare rates, specialties, locations, and more, narrowing your choices until you’ve got the perfect fit for your LLC.
If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in Nebraska. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Nebraska. Is this your business? If so, you’ll file the “Certificate of Authority” instead of the Certificate of Organization.
All foreign business entities are required to foreign qualify in Nebraska, or they could incur some pretty severe penalties. To qualify, submit your Certificate of Authority either online or using a paper form. Either way, the filing fee is $120, just slightly more than the Certificate of Organization. But similar to the Certificate of Organization, this is a one-time filing, so once it’s accepted, you’re good to go.
LLC Biennial Fees
Some states require their business entities to file annual reports to provide updates on business information, but Nebraska requires biennial reports instead. Every odd-numbered year, you will be required to submit a report by Apr. 1. Fortunately, at $10, this recurring filing fee won’t break the bank.
The information required to file your biennial report includes your LLC’s official business name, your LLC’s principal office address, the name and address of your registered agent, and your name and title.
For more info on biennial reports for Nebraska LLCs, check out our full article on this topic!
By default, LLCs are classified as “pass-through” entities, meaning that they don’t file corporate tax returns. Rather, the owners and/or members report income and losses on their personal returns. So, there aren’t federal taxes to consider. Plus, Nebraska doesn’t require its business entities to pay a franchise tax for the privilege of doing business there. Still, there are certain circumstances that would make your LLC subject to specific business-related taxes.
It’s less common, but if you’ve structured your LLC to be taxed as a corporation, it will need to file a corporate tax return and pay the corporate income tax — 5.58% if your income is less than $50,000 and 7.81% if it’s greater.
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Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Let’s say you don’t file your biennial report by Apr. 15. Not a big problem. You’ll lose your good standing with the state, so you won’t be able to foreign qualify in other states, apply for business loans, and more. But as long as you file your report right away, you can earn your good standing back. However, if Jun. 1 rolls around and you still haven’t filed it, your LLC will be administratively dissolved and prohibited from doing business until you successfully file for reinstatement and submit all outstanding forms/fees.
There are tax penalties too, although each tax has its own late fees. A late sales tax payment, for instance, accrues a fine of 10% of the amount due (or $25, whichever is greater). Visit the Nebraska Department of Revenue website for more information about tax penalties.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Nebraska.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees — like biennial reports and necessary taxes — so your business doesn’t fall out of good standing.
Key Steps for Starting a Nebraska LLC
- The first step to forming a Nebraska LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
- Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in Nebraska, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
- The third step involves the preparation and filing of your Certificate of Organization. You’ll need to fill out the paperwork and pay a $100 fee. Once the state processes this document, your LLC will be officially open for business!
- That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for Nebraska LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
- You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
- Next, you’ll need to register for any relevant taxes with the Nebraska Department of Revenue, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.
Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of Nebraska!
Key Steps for Maintaining a Nebraska LLC
After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.
You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.
As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.
Frequently Asked Questions
Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in Nebraska.
What are the state business tax rates in Nebraska?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 2.46% and 6.84%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay Nebraska’s 5.58-7.81% corporate income tax on your business revenue.
How quickly does Nebraska process LLC formations?
The Secretary of State should be able to process your LLC’s formation within 3-5 business days. If you’re in a hurry, you can file online, which speeds up your turnaround time to roughly 1-2 business days.
How many small businesses are there in Nebraska today?
The state of Nebraska is home to more than 150,000 small businesses. Entrepreneurs of all backgrounds and business types find that Nebraska is a great place to own and operate a small business.
What are the top small business resources and websites in Nebraska?
The Nebraska chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Nebraska LLCs. The U.S. Small Business Administration’s Nebraska District Office is another valuable resource, and the state’s small business resource page also has plenty of good info.
Should I form my LLC in Nebraska, or choose a state like Delaware or Wyoming?
Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.
However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.