Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Washington and you are looking to open a second location in Nebraska, you may need to complete a foreign qualification in Nebraska before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
What happens if I fail to foreign qualify before doing business in Nebraska?
Foreign qualifying is essentially asking permission to do business in the state of Nebraska. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Nebraska yields consequences that are far costlier than registering in the first place.
If you fail to foreign qualify, your business is prohibited from bringing or maintaining a lawsuit in Nebraska courts. Plus, the Attorney General can halt your LLC’s business activity in the state.
Transacting business without properly qualifying, however, will not cancel or invalidate your current contracts. Nor will it stop your LLC from defending a lawsuit in Nebraska courts.
That said, the loss of your in-state revenue stream and legal rights is a frightening thought, so it’s best to foreign qualify right away.
You can read more about possible penalties in Nebraska Revised Statute 21-162.
What is considered “doing business” in Nebraska?
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Nebraska? Like many other states, Nebraska law is fairly vague on the topic. But other state and tax laws indicate that you are considered to be “doing business” in most cases and required to foreign qualify if:
- Your LLC maintains a physical presence, or nexus, in the state. This might include offices, stores, warehouses, distribution centers, or other structures.
- There are salespeople, agents, or representatives conducting business on behalf of your LLC in the state.
Depending on how you’ve set up your LLC, you might need to pay certain business taxes. By foreign qualifying, you’re informing the state about your tax status, so they know what you’ll be paying. It might seem economical to avoid these LLC taxes by not qualifying, but resist the temptation! It could lead to heftier penalties in the long run. Check out the Nebraska Department of Revenue website to learn more. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.
If you’re unsure whether or not you need to file for a foreign qualification in Nebraska, we suggest seeking legal counsel.
Could I be exempt from foreign qualifying in Nebraska?
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Nebraska. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
- Maintaining, defending, settling, etc. an action or proceeding in a Nebraska court
- Activities concerned only with internal affairs, like LLC member and/or manager meetings
- Maintaining bank accounts
- Having offices/agencies for the maintenance of the LLC’s own securities
- Selling products or services through independent contractors
- Completing orders outside of the state before they become contracts
- Creating or acquiring indebtedness, or securing debts
- Facilitating a single transaction, within 30 days, that isn’t in a series of similar transactions
- Transacting business in interstate commerce
Take a look at a more detailed list in Nebraska Revised Statute 21-157. After reviewing them carefully, if you’ve determined that your business activities in Nebraska all appear there, you’re likely in the clear! But if you’re not sure, check with an attorney.
How to Foreign Qualify Your LLC in Nebraska
Foreign qualification in Nebraska is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Nebraska, you’ll need to get your hands on a Certificate of Authority. You can apply for one using this form, submitted either online or by mail.
Even if you’re submitting it online, you’ll need to fill it out, so first download the application and enter the appropriate information. Then, follow these directions:
- Go to the Secretary of State’s Forms and Fees page
- Scroll down to the section titled Limited Liability Company (Foreign)
- To the right of “Certificate of Authority,” click eDelivery
- If you plan on using the eDelivery system frequently, you can create a subscriber account. Otherwise, select “forming a new entity/qualifying a foreign entity” at the bottom to continue as a non-subscriber
- On the next page, input your LLC information and upload your completed document
- Follow the rest of the instructions and pay your $120 fee with a Visa, Mastercard, Discover, or American Express
Or, take two copies of that completed form and pop it in the mail with a check for $120 (made out to “Secretary of State”). Here’s the address:
Secretary of State
P.O. Box 94608
Lincoln, NE 68509
Along with your form, the Secretary of State requires a Certificate of Good Standing (or Certificate of Existence) – dated within 60 days – from the state where you formed your LLC.
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification and you’re embarking on another chapter in the life of your business.
Name Requirements to Remember
Since you’re taking off in a new state, there will be new rules to remember about your business name. As you submit your documents, check to confirm that your name (or fictitious name) follows them. In Nebraska, your LLC name must:
- Use one of the following terms – “limited liability company,” “limited company,” “L.L.C.,” “LLC,” “L.C.,” or “LC”
- Be distinguishable and not deceptively similar to any other entity names on file with the Secretary of State (perform a Nebraska LLC name search to make sure the name you want is available)
Find more information about these requirements in Nebraska Revised Statute 21-108.
What Is the Nebraska Publication Requirement?
When you register an LLC in Nebraska, whether domestic or foreign, the state requires that you publish proof of your business formation in a newspaper in general circulation. The requirements for your advertisement include the name of your LLC, the name and street address of your registered agent, the physical address of your primary business location, and which (if any) professional service your business provides.
The paper must be located near your LLC’s main office in Nebraska, and you need to run the ad for at least three weeks. Once the three weeks are up, the newspaper will provide you with a proof of publication form, which you can then submit to the Nebraska Secretary of State.
Filing the form with the state is quite inexpensive, especially compared to New York and Arizona, the other two states that require publication. In Nebraska, there is a $10 fee by mail and a $12 fee for online filing, and both options also add on a $5 per page fee.
For more information, consult our full guide to the Nebraska LLC publication requirement.
Should I hire a service to file my Nebraska foreign LLC?
Considering all the work that goes into expanding your business to a new state, you’ve likely got a lot on your plate. Rather than trying to juggle everything yourself, you can bring on an individual or company to help you secure your LLC’s Nebraska foreign qualification.
For example, business attorneys understand all the legal nuances involved, providing peace of mind that the job will get done correctly. But if you go this route, be sure you have the budget for it. Lawyer fees for Nebraska foreign LLC qualifications can be a prohibitively expensive option for businesses operating on tight budgets.
If you’re operating on a limited budget, but still want to have your Nebraska foreign LLC professionally registered, go with an online business service provider. There are plenty of reputable companies that can help you out with Nebraska foreign qualifications, but here are a couple of our favorites:
- MyCompanyWorks ($99): MyCompanyWorks is one of the only service providers offering foreign qualifications for less than $100. This company receives excellent customer reviews and has a great track record of success, making it a smart choice for a wide range of entrepreneurs.
- IncFile ($149): IncFile offers a free LLC formation service that we have always appreciated, and its pricing for foreign qualifications is a reasonable $149. IncFile has the best customer feedback reputation in the industry, with tens of thousands of positive reviews available online.
- Northwest Registered Agent ($225): Northwest is more of a premium service, with the best customer support in the industry, in our opinion. They also include a year of their namesake registered agent service with every foreign qualification. There’s a reason Northwest is our #1 pick among the best registered agent services!
Frequently Asked Questions
When Is the Best Time to Foreign Qualify an LLC?
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a state where you don’t have permission to do so.
How Long Does It Take Nebraska to Process a Foreign Qualification?
You’ll typically need to wait only 1-2 business days for the Nebraska Secretary of State to process a foreign qualification submission.
Where Can I Learn More About the Nebraska LLC Licensing and Permitting Requirements?
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Nebraska state law. For more information about business licenses and more in this state, check out the state’s convenient Business Licensing webpage.
Do I Need to File a Biennial Report for My Foreign LLC in Nebraska?
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Nebraska LLC Biennial Report.
What Is the Total Expected Cost of Operating an LLC in Nebraska?
The overall costs of operating a Nebraska LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
Should I Use an LLC Service, Hire an Attorney, or Foreign Qualify My Own LLC?
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
How Do Online LLC Services Work?
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Nebraska registered agent.
The service then registers your Certificate of Authority with the state to qualify your LLC to do business in Nebraska.
Are LLC Service Websites Legit?
Absolutely. There are quite a few reputable companies offering LLC formation service and foreign qualifications these days, including the two options we discussed earlier: MyCompanyWorks and IncFile.
In fact, while we certainly have our opinions about which ones offer the best pricing and features, every one of the incorporation services we discuss on this website is entirely legitimate and trustworthy.
Need to save time?
Let’s face it, there’s never enough time in the day, especially when you’re running a company. And properly registering your LLC in Nebraska involves research and time, time that you could be using to continue growing your business.
If the thought of paperwork, fees and state correspondence makes your head spin, consider using a service like Northwest Registered Agent to foreign qualify your business. Services like Northwest ensure that your forms are filed correctly and on time, potentially saving you thousands of dollars in penalties, not to mention a bunch of time and stress.