How to Incorporate in Nebraska (August 2024 Update)

Incorporating a business in Nebraska establishes it as a legal entity separate from its owners. An incorporated business can enter into contracts, sue and be sued, and continue to exist even if ownership changes. Forming a Nebraska corporation also offers liability protection and potential tax advantages.

While incorporating requires more paperwork than operating as a sole proprietor or partnership, the benefits often make it worthwhile for small business owners planning long-term growth. This article provides a step-by-step guide to incorporating in Nebraska, covering key requirements and processes.

Choosing a Business Name

The first step to incorporating in Nebraska is choosing your corporation’s official name. You’ll want to check name availability to ensure no other active or reserved business entities in the state are using the exact name you want.

You can conduct a preliminary name search using the Nebraska Secretary of State’s free online business search tool. For an official determination, email a name request to sos.corp@nebraska.gov or fax it to 402-471-3666.

If your preferred name passes the availability check, you can reserve it for 120 days by filing an Application for Reservation of Name with the Secretary of State’s office ($30 fee).

In addition to uniqueness, your corporate name must follow Nebraska's naming guidelines, including:

• Containing a required business identifier like "Corporation,""Incorporated," or "Corp." Banking corporations can use just "bank" without a corporate designator.
• Not implying the business is being formed for an illegal purpose.

Once you land on an available name that meets requirements, you’ll use it consistently throughout the incorporation process.

Appointing a Registered Agent

All Nebraska corporations must designate a registered agent to receive important legal and tax documents on the company's behalf. The registered agent must have a physical street address in Nebraska where they can receive service during normal business hours.

You can serve as your corporation's registered agent yourself, but listing a commercial registered agent service can better preserve your privacy. These services let you use their Nebraska address on public filings related to your business.

Filing Articles of Incorporation

To formally create your Nebraska corporation, you’ll need to prepare and file Articles of Incorporation with the Secretary of State. While concise articles are recommended to save on the $5/page recording fee, make sure to cover these minimum required elements:

• Exact corporate name
• Names and addresses of incorporators
• Number of authorized shares, classes, par values
• Registered agent name and registered office address
• Primary business purpose
• Duration and effective date

Rather than your home address, consider listing a registered agent’s address for your registered office. You can file articles by mail with two copies and payment or file online through the SOS’s Corporate Document eDelivery system.

Publishing a Notice

After the state approves your Articles of Incorporation, statute requires publishing a notice in a legal newspaper local to your designated corporate address for three consecutive weeks (NE Code 21-2,229). This notice should include basic information like your corporate name and authorized shares.

Once published, the newspaper sends an affidavit of publication, which you must file with the Secretary of State to complete this requirement.

Obtaining an EIN

Now that your Nebraska corporation exists, head to IRS.gov to apply for an employer identification number (EIN). This number identifies your business for federal tax purposes and other needs like opening a bank account. EIN applications are free and can be completed online instantly.

Drafting Bylaws

Bylaws outline your corporation's internal management, from stock classes and voting procedures to director duties and shareholder meetings. While not filed publicly, adopting corporate bylaws is required by statute before you begin formal operations.

Carefully drafted, comprehensive bylaws prevent confusion down the road by addressing foreseeable situations like transferring stock, filling officer vacancies, or distributing income.

Holding an Organizational Meeting

Once you have bylaws established, the next step is holding an initial organizational meeting. Shareholders and directors can use this first corporate meeting to appoint officers, approve stock distribution, and discuss priorities for the new company.

Detailed meeting minutes should be prepared reflecting organizational decisions made. Ongoing corporate meetings will follow protocols defined in your bylaws.

Opening a Bank Account

Before you begin accepting investments or transacting business as a Nebraska corporation, open a dedicated corporate bank account. Keeping corporate finances separated from your personal funds is vital for liability protection.

Bring a copy of your Articles of Incorporation, EIN, and corporate bylaws to the bank to open an account. Some banks may require a corporate resolution formally authorizing account opening.

For more information, take a look at our article on the key benefits of business checking accounts.

Reporting Requirements

On an ongoing basis, Nebraska corporations must submit a biennial report to the SOS by April 1st of even-numbered years. This report covers information like your current directors, officers, capital stock, registered office address, and nature of business.

You must also pay an occupation tax with your biennial report based on authorized capital stock. Tax ranges from $26 for corporations with under $10,000 in stock to $1,100 for those with over $100 million in stock.

In addition to biennial reporting, Nebraska corporations pay state income taxes—5.58% on the first $50,000 in income and 7.81% on income above $50,000. You may need additional tax registrations depending on your activities.

Conclusion

While forming a corporation in Nebraska entails more upfront work than other business structures, taking these key steps lays a solid foundation if you plan to grow. Plus, you’ll enjoy ongoing benefits like liability protection and flexible stock options. Don’t hesitate to seek legal or financial advice for business-specific needs.