Starting a Corporation in Nebraska | What You Need to Know

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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Start a Corporation in Nebraska

In Nebraska, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Nebraska, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Nebraska.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Nebraska?

A corporation in Nebraska is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Nebraska are required to have at least One directors. One of the main advantages of a corporation in Nebraska is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Nebraska is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Nebraska if you would like to provide limited liability protection to your shareholders rather than Nebraska LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Nebraska

To start a corporation in Nebraska, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Nebraska naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Nebraska-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Nebraska Secretary of State‘s business name database and Business Name Search in Nebraska. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $15 and mail name reservation fee of $15. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by two methods, by mail and in person., which costs around $100. In addition, the DBA’s validity in Nebraska is ten years, which you can file in Nebraska Secretary of State.

You can check out How to File a DBA in Nebraska for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Nebraska Registered Agent Services to check in forming Nebraska Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Nebraska are required to have at least One directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Nebraska, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

After you appoint the initial board of directors in your Nebraska corporation, the next step is to write and file a Articles of Incorporation. In writing, the Nebraska Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Nebraska corporation, you must prepare and file Articles of Incorporation with the Nebraska Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Nebraska Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Nebraska, the Articles of Incorporation filing fee costs around $30 for in office filing and $25 for online filing. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create a subcriber account/Log in to the SOS site, get the online eDelivery form, fill it, and submit online or go to office to do the proces.
  • Offline filing: there’s no offline method of filing the documents

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Nebraska, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Nebraska corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Nebraska corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Nebraska are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Nebraska Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Nebraska licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Nebraska corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Nebraska for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Nebraska corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Nebraska can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Nebraska Department of Revenue for guidance on your specific obligations.

Step 11: Biennial Reporting and Ongoing Compliance

Once your Nebraska corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Biennial Report with the Nebraska Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Nebraska

Even if you have established your corporation in Nebraska, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Nebraska has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Nebraska are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Nebraska

In forming a corporation in Nebraska, a filing and Biennial fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Nebraska, it costs $30 for in office filing and $25 for online filing. The corporation in Nebraska also has to file an Biennial Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

How do I start a corporation in Nebraska?
You must file Articles of Incorporation with the Nebraska Secretary of State’s office.
What is the cost of filing Articles of Incorporation?
It costs $100 to file Articles of Incorporation with the Nebraska Secretary of State’s office.
Can I reserve a corporation name before filing Articles of Incorporation?
Yes, you can reserve a corporation name for 120 days by submitting a name reservation request to the Nebraska Secretary of State’s office.
Do I need a registered agent for my Nebraska corporation?
Yes, your Nebraska corporation must have a registered agent who is located in Nebraska.
What is a registered agent?
A registered agent is a designated individual or entity who is responsible for receiving service of process on behalf of a corporation.
Can I use a PO Box as my corporation’s registered office address in Nebraska?
No, you must use a physical street address as the registered office address for your corporation in Nebraska.
What is the minimum number of directors required by law for a Nebraska corporation?
A Nebraska corporation must have at least one director.
Can the same person be the director and the registered agent for a Nebraska corporation?
Yes, the same person can be the director and the registered agent for a Nebraska corporation.
How long does it take to file Articles of Incorporation in Nebraska?
It typically takes 2-3 business days for the Secretary of State’s office to process Articles of Incorporation.
Can I file Articles of Incorporation online in Nebraska?
Yes, you can file Articles of Incorporation online through the Nebraska Secretary of State’s website.
Do I need to obtain a federal taxpayer identification number (EIN) for my Nebraska corporation?
Yes, you must obtain an EIN from the Internal Revenue Service (IRS) for your Nebraska corporation.
How much does it cost to obtain an EIN from the IRS?
It is free to obtain an EIN from the IRS.
What is a Nebraska certificate of good standing?
A Nebraska certificate of good standing is a document that verifies that your corporation is in compliance with state requirements and has paid all relevant fees.
How much does a certificate of good standing cost in Nebraska?
A certificate of good standing costs $5 in Nebraska.
Can I register my corporation in multiple states?
Yes, you can register your corporation in multiple states, but you will need to comply with the specific registration requirements of each state.
Can a foreign corporation do business in Nebraska?
Yes, a foreign corporation can do business in Nebraska, but it will need to file a Foreign Corporation Registration Statement.
What is a foreign corporation?
A foreign corporation is a corporation that is registered in a state other than Nebraska.
How can I dissolve my corporation in Nebraska?
You must file Articles of Dissolution with the Nebraska Secretary of State’s office to dissolve a corporation in Nebraska.
Is there a fee to dissolve a corporation in Nebraska?
Yes, it costs $10 to file Articles of Dissolution with the Nebraska Secretary of State’s office.
What is an annual report?
An annual report is a document that businesses are required to file with the state that provides information about the business’s operations and status.
Do I need to file an annual report for my Nebraska corporation?
Yes, you must file an annual report with the Nebraska Secretary of State’s office for your corporation.
When is the annual report due for Nebraska corporations?
The annual report is due by April 1st of each year in Nebraska.
How much does it cost to file an annual report in Nebraska?
The cost to file an annual report in Nebraska is $10 for corporations with less than $200,000 in assets and $30 for corporations with more than $200,000 in assets.
Can I file the annual report for my Nebraska corporation online?
Yes, you can file the annual report for your Nebraska corporation online through the Secretary of State’s website.
How long does it take to receive the articles of incorporation from the Nebraska Secretary of State’s office?
It can take up to seven business days to receive the articles of incorporation from the Nebraska Secretary of State’s office.
Do I need to file the articles of incorporation with any local Nebraska government agencies?
You do not need to file the articles of incorporation with any local Nebraska government agencies.
What Nebraska state taxes does a corporation need to pay?
A corporation that operates in Nebraska must pay the corporate income tax, which is currently 7.81%.
Can a corporation have a non-Nebraska mailing address?
A corporation can have a non-Nebraska mailing address, but it must have a registered agent located in Nebraska who has a physical Nebraska address to receive service of process.
What is the minimum number of shareholders required to start a corporation in Nebraska?
A minimum of one shareholder is required to start a corporation in Nebraska.
What is the minimum amount of capital required to start a corporation in Nebraska?
There is no minimum amount of capital required to start a corporation in Nebraska.
What is the name reservation process in Nebraska?
You can reserve your corporation name for 120 days in Nebraska by filing an online application with the Secretary of State.
How long does it take to start a corporation in Nebraska?
It typically takes around 7-10 business days to process incorporation documents for a corporation in Nebraska.
Is a registered agent required for a corporation in Nebraska?
Yes, a registered agent is required for a corporation in Nebraska.
Can a foreign corporation register to do business in Nebraska?
Yes, a foreign corporation can register to do business in Nebraska by filing an application with the Secretary of State.
What type of corporation should I start in Nebraska?
Your choice of corporation structure in Nebraska depends on your business needs and goals, and you may want to consult with a lawyer to determine which type of corporation is best for you.
Can I use a PO box as my corporation’s registered address in Nebraska?
No, you cannot use a PO box as your corporation’s registered address in Nebraska – it must be a physical street address.
How do I obtain an Employer Identification Number (EIN) for my Nebraska corporation?
You can obtain an EIN for your Nebraska corporation by filing an online application via the IRS website.
What are the annual reporting requirements for corporations in Nebraska?
Corporations in Nebraska must file an annual report with the Secretary of State and pay a registration fee.
Do I need to get a business license to start a corporation in Nebraska?
Depending on your business type, you may need to obtain a business license from the Nebraska Department of Revenue.
What are the state tax implications of starting a corporation in Nebraska?
Corporations in Nebraska will be subject to a state corporate income tax and may also be subject to sales and use taxes.
How do I file articles of incorporation for my Nebraska corporation?
You can file articles of incorporation online or by mail via the Nebraska Secretary of State.
What are the filing fees for incorporating a business in Nebraska?
The filing fee for incorporating a business in Nebraska is $125 for online filings and $130 for mail-in filings.
Can I elect to be taxed as an S corporation for my Nebraska corporation?
Yes, you can elect to be taxed as an S corporation for your Nebraska corporation by filing Form 2553 with the IRS.
Are Nebraska corporations required to hold annual shareholder meetings?
Nebraska corporations are required to hold annual shareholder meetings unless the corporation’s bylaws state otherwise.
Can I file the articles of incorporation using a public form or do I need to create a custom legal file?
You can file articles of incorporation in Nebraska using a public form provided by the Secretary of State.
Do I need to publish the articles of incorporation in Nebraska?
There is no requirement to publish the articles of incorporation in Nebraska.
What are the ongoing formalities required for corporations in Nebraska?
Nebraska corporations are required to hold director and shareholder meetings and maintain accurate record keeping.
Can a Nebraska corporation have just one director?
Yes, a Nebraska corporation can have only one director, however, it is advised to have at least two directors.
What is the difference between filing a corporation and an LLC in Nebraska?
Corporations offer liability protection for its shareholders, while LLCs provide liability protection for individuals who are members.
Can I change my Nebraska corporation’s name after it is formed?
Yes, you can change your Nebraska corporation’s name by filing a certificate of amendment with the Secretary of State.
Is there a corporate franchise tax in Nebraska?
Nebraska no longer has a corporate franchise tax.
What should I do if I want to dissolve my Nebraska corporation?
You can dissolve your Nebraska corporation by filing articles of dissolution with the Secretary of State.
Can a corporation be its own registered agent in Nebraska?
No, a corporation cannot be its own registered agent in Nebraska.
Is it a requirement for a corporation to have a physical address in Nebraska?
Yes, a corporation must have a physical address in Nebraska for itself and its registered agents.
Are there any state grants for starting a corporation in Nebraska?
Yes, there are certain state grants available for starting a corporation in Nebraska. You can check the Nebraska Department of Economic Development website for more information.
Do Nebraska corporations have to file their financial reports with the Secretary of State?
No, Nebraska corporations are not required to file their financial reports with the Secretary of State.
What is the Corporate Officers Tax in Nebraska?
There is no Corporate Officers Tax in Nebraska, but officers need to pay the state payroll taxes like any other employee.

Also Read

How to Save Money While Forming Your Nebraska Corporation

Often, the process of setting up a corporation can be an expensive affair if not approached wisely. However, by adopting a strategic approach and exploring cost-saving opportunities, aspiring business owners can ensure their funds are utilized optimally. Here are a few tips to help entrepreneurs save money during the formation of their Nebraska corporation.

First and foremost, thorough research and planning at the initial stages can lay the foundation for economical decision-making. Before diving into the process, aspiring business owners should familiarize themselves with Nebraska’s legal and economic landscape through online resources, community workshops, and networking events. Such knowledge will not only provide a comprehensive understanding but also reveal potential ways to save money.

Another approach to save on costs while forming a corporation is to brush up on the available legal options. Depending on the business nature and liabilities involved, entrepreneurs can consider registering as a limited liability company (LLC) instead of a traditional corporation. LLCs often come with fewer compliance and administrative requirements, leading to reduced expenses.

Furthermore, seeking guidance from professionals specializing in corporate formation can be invaluable. While it may sound counterintuitive due to the associated fees, the expertise and insights these professionals bring to the table can prevent costly mistakes in the long run. They can advise on selecting affordable registered agents, navigating the paperwork, and structuring the corporation in the most efficient manner.

Exploring free or low-cost resources can also help entrepreneurs save money. In Nebraska, the Secretary of State’s website provides vital information and forms required during the incorporation process, ensuring no unnecessary expenses are incurred on unnecessary consultancy fees. Additionally, various online platforms offer affordable or even free templates for essential legal documents, such as operating agreements or articles of incorporation.

Negotiating with vendors for essential services can make a significant difference in savings. Startups can approach multiple registered agent service providers and compare prices to strike a reasonable deal. Taking advantage of introductory offers and discounted rates can help reduce initial investments while maintaining the quality of services. Moreover, entrepreneurs should scrutinize service packages to ensure they are not paying for unnecessary features that do not directly benefit their businesses.

Lastly, networking within the entrepreneur community can lead to insightful advice and potential opportunities to cut costs. Interacting with fellow business owners can potentially reveal alternate, cost-saving approaches they may have successfully employed themselves. This exchange of ideas and information is not only helpful but can also foster mutually beneficial partnerships.

While starting a Nebraska corporation may seem like a daunting task, it does not have to drain your bank account completely. By adopting a strategic and diligent approach to research, utilizing available resources, seeking professional advice when necessary, negotiating with vendors, and leveraging the support of the entrepreneurial community, aspiring business owners can significantly reduce expenses and save money during the formation process. In doing so, entrepreneurs can allocate their funds more efficiently, ensuring a solid financial foundation for their new venture.

Conclusion

Starting a corporation in Nebraska involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Nebraska corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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