Limited Liability Company (LLC) Business Formation

Limited Liability Company (LLC) Business Formation

A Limited Liability Company (LLC) provides its owners with limited personal liability for the company’s debts and obligations, protecting their personal assets, while profits and losses are reported on individual owner tax returns like a partnership for potential tax advantages over corporations. LLCs offer operational flexibility, with members able to manage themselves or appoint designated managers, making it a common structure for Nebraska small businesses.

Key aspects:

  • Legal liability is limited to the investment contributed to the business.
  • If only 1 owner, the business profits are taxed as in the sole proprietorship. If there are at least 2 owners, the business profits are taxed as in the partnership.
  • For compensation, the owner(s) can take a draw if the LLC is set up as a sole proprietorship or receive a reasonable salary if it is set up as a partnership.

Register the Business Name

Register: Complete the Application for Reserved Name with the Nebraska Secretary of State.

Submit: Submit the completed form to the Nebraska Secretary of State via the Corporate Document Delivery System.

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Registered Agent

When forming a Limited Liability Company (LLC), it is required to appoint a Registered Agent who acts as the recipient for legal documents and government communications, specified in the Certificate of Organization by name and physical address of the registered office. The Registered Agent role can be fulfilled by someone affiliated with the LLC or an external third-party individual residing in the state, with the registered office address precisely matching the agent’s business address.

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Certificate of Organization

Nebraska LLCs are officially created and legally recognized as a business entity with rights, protections, and tax status upon the proper filing and acceptance of a Certificate of Organization along with required fees by the Nebraska Secretary of State’s office.

Complete the Certificate of Organization: File the Certificate of Organization with the Nebraska Secretary of State to form your LLC.

Submit: Submit the completed form to the Nebraska Secretary of State via the Corporate Document Delivery System.

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Notice of Organization

Publish: Publish a Notice of Organization in a legal local newspaper of general circulation for three consecutive weeks.

Obtain: Request an Affidavit/Proof of Publication from the newspaper, which serves as proof that you have published the notice.

Submit: Within 45 days from the date your trade name is registered, send a copy of the Affidavit/Proof of Publication to the Nebraska Secretary of State.

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Operating Agreement

An Operating Agreement is an internal document outlining the rights, responsibilities, and operational procedures for an LLC, serving as a governing document for management, ownership structure, capital contributions, profit/loss distribution, and decision-making processes. While examples are available online, it is recommended to consult a legal professional to ensure the Operating Agreement is tailored to the specific LLC’s needs and complies with applicable state laws.

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Additional Requirement 

To understand your tax obligations as a business owner, consult the Business Tax section of the Business Formation eGuide. This resource covers both federal and state tax registration processes and requirements. Key steps include acquiring an Employer Identification Number (EIN) from the federal government and a Nebraska Identification Number (Form 20) from the state. Additionally, familiarize yourself with self-employment taxes, as they will likely apply to your situation.