Sole Proprietorship Business Formation

Sole Proprietorship Business Formation

A Sole Proprietorship is a business structure wherein a business owner retains absolute ownership. This business structure is the most basic but bears greater personal risk than other business structures. A Sole Proprietorship does not require formal documents to establish business formation. 

Key points:

  • The business is not legally separated from the owner and the business owner accepts the obligation of all debts and liabilities incurred by the business.
  • Establishing a sole proprietorship requires minimal requirements, with no need to register the business with the State of Nebraska.
  • The owner shoulders unlimited liability. A business owner’s personal assets and business assets can be used to resolve the remaining debts of the business.
  • The owner is entitled to receive the entirety of the business’s profits.

Register the Business Name/Proof of Publication

Sole proprietors can use their legal name or implement a different trade name/doing business as (DBA) designation. Requiring the registration of trade names or DBA helps in recognizing who owns the business. The selected name must be unique from other business names registered within Nebraska.

Complete an Application for Registration of Trade Name form provided by the Nebraska Secretary of State’s office.

Submit the completed form either by mailing it to the Secretary of State or filing it online through their website.

You must publish a Notice of Your Trade Name in a local newspaper.

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

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’s office.

Additional Steps

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.