Choosing a Limited Liability Company structure for your business entity is a good choice. LLCs are rapidly gaining popularity among business owners because they provide tax benefits that you simply can’t get with a corporation. Plus, they offer personal asset protection which provides business owners with a lot of peace of mind. But what steps do you have to take to form an LLC, and how long does it take? We’ll answer all of these questions and tell you a bit about doing business in the state of Nebraska in our complete guide.
Discovering Nebraska
Nebraska shares borders with Iowa, Missouri, Kansas, South Dakota, Colorado and Wyoming. It’s mostly a plains state, with hills, sand, boulders, gravel and a type of windblown sediment called loess, as well as valleys, canyons, wetlands, and lakes. The Badlands in the northwest is an unusual place where the rocks have been formed into mushroom-style shapes due to the wind whipping across the sandstone. There aren’t tons of natural resources in the state, but the ones that are there are plentiful. First, Nebraska is called “the breadbasket of America” because it’s home to the High Plains Aquifer, which is an underground water source, which makes Nebraska’s soil highly fertile and helps produce a lot of crops. There’s also a lot of gas and petroleum in the state.
Economic Overview of Nebraska
The GSP (Gross State Product) of Alaska is $126.4 billion, and it’s had a growth rate of 16.5k% from 2018-2023. The industries that are biggest in the state according to revenue are Meat, Beef & Poultry Processing, Corn, Wheat & Soybean Wholesaling, Natural Gas Distribution, Life Insurance & Annuities, and Property, Casualty & Direct Insurance. The companies that hire the most people in Nebraska are the University of Nebraska, Walmart Inc., Berkshire Hathaway Inc., CHI Health, and Offutt Air Force Base. And the 5 sectors that contribute the most to the state’s overall Manufacturing, Agriculture, Forestry, Fishing & Hunting, Finance & Insurance, Real Estate & Rental & Leasing, and Healthcare & Social Assistance.
Business Environment in Nebraska
If you pay attention to the different surveys and ratings lists that feature Nebraska, it can be difficult to determine the quality of Nebraska’s business environment. But we’ve combed through the information and we’ll clear the confusing numbers up for you.
Usnews.com ranks Nebraska as #39 in terms of Business Environment, #16 for Growth and #3 for Employment. It’s #5 for Infrastructure. It’s also #17 on the list for Affordability and #20 for Economic Opportunity. It reportedly has a cost of living index of 91.8 compared to the national number of 100.0, and a poverty rate of 10.8%, as opposed to the national average of 12.8%.
On the other side of things, CNBC rated the state as #8 for Business Friendliness, #36 for workforce, #35 for Infrastructure, #34 for Economy, #19 for Cost of Doing Business, and #40 for Access to Capital. Those are some different numbers.
When it comes to infrastructure, 18% of the roads are in poor to fair condition, 8.3% of the bridges in the state were considered structurally deficient in 2021, and there are 152 high hazard dams in the state. The Bipartisan Infrastructure Law of 2023 has granted $110k for the Gordon Municipal Airport, which sounds great until you realize there are 9 different airports in the state.
The reason Business Environment is so up in the air in ratings is because yes, there are programs in place to assist new businesses. But access to capital in the state is lacking, and there’s no real one-stop shop for applications, funding or other business services. Plus, no one seems to know what the ecosystem builders in the state really want- even them. There isn’t any clear, unified goal among them, so it can be hard to determine if your business or project fit the goals of the investors and program managers.
State-Specific Regulations and Incentives for Forming an LLC in Nebraska
Here’s a look at the regulations and incentives that help businesses in the state of Nebraska.
- ImagiNE Nebraska Act: This is a program that provides a variety of incentives for projects, which include investment credits, wage credits, sales/use tax refunds, and even personal property tax exemptions.
- Economic Redevelopment Areas: Projects in these areas that create a minimum of 5 new jobs that pay 70% of the state’s average wage, invest $250,000- $1 million could receive a 4% investment credit, as well as a 6% wage credit.
- Manufacturing Growth & Expansion (Rural): Manufacturing projects in rural areas could qualify for a 4% wage credit and a 4% investment credit if they create a minimum of 5 new jobs paying 70% of the county’s average wage, and invest at least $1 million. They also qualify for an additional 3% investment credit if the investments are over $10 million.
- Manufacturing Growth & Expansion (Urban): This has the same benefits and qualifications as the Manufacturing Growth & Expansion (Rural), with the exception that the project must be located in an urban area, and at least 10 jobs must be created.
- Growth & Expansion: Projects in the state at large that create a minimum of 10 jobs at 90% of the state’s average wage, with an investment of $1 million could receive a 4% investment credit and a 4% wage credit.
- Quality Jobs: With this program, companies get a 5% wage credit if a project creates a minimum of 20 new jobs that pay 100% of the state’s average wage. If the project pays 150% of the state’s average wage, the project can receive an additional 2% wage credit, and another 2% wage credit if they pay more than 200% of the average state wage.
- Modernization: If a project in the state infests a minimum of $50 million and pays 150% of the state’s average wage then it could qualify for a 100% sales/use tax refund as well as a personal property tax exemption on data center and processing equipment.
Pros and Cons of Establishing an LLC in Nebraska
There are both advantages and disadvantages to owning a business in Nebraska.
There’s a low cost of business in Nebraska, and a low cost of living. Right now, corporate income tax rates in the state are 5.58%, personal income tax rates are between 2.46%-6.64% and the state sales tax rate is 5.5%, with local sales tax rates maxing out at 2%. On top of that, in 2023 a tax cuts package was passed that will cut corporate and personal income tax rates by 3.99% by 2027.
Products in Nebraska move. It’s a major transportation hub. You can move products in Nebraska in just a couple of days to either coast really, no matter whether you choose to ship them by train or truck. Speaking of trucks, Werner Enterprises, one of the top 10 trucking companies in the nation, is headquartered in the state. And the broadband infrastructure is being upgraded, as well.
Because 100% of Nebraska’s power is supplied by local utility companies, energy costs in the state are low. And 20% of that power comes from renewable resources.
There are disadvantages, as well.
Because of the 1.90% unemployment rate, it can be insanely hard to fill positions and hire new employees in Nebraska. Of course, a low unemployment rate is great for the state, in general, but it’s bad for businesses.
Access to capital is difficult to obtain in Nebraska. One report says that some of the ecosystem builders in the state don’t bother with meeting with business owners at all. 11% of them have 0 interaction with entrepreneurs. And another 22% of them meet with only 7 or more business owners per month.
There’s no one method for obtaining assistance, either. There’s not a one-stop shop for applications and information, like Kansas and Pennsylvania have. And there isn’t a way to get entrepreneurs in contact with investors.
These ecosystem builders don’t have a clear goal in mind, either. And while that may seem like a minor disagreement and something that shouldn’t even be mentioned, it can be a real pain when you’re starting out. There’s a limited number of funds allocated to these people to help businesses with, and if they disagree over where to spend it, it could cause confusion over whether your project should be worthy of the assistance.
Procedure of Establishing an LLC in Nebraska
LLC formation is a complicated process that many people don’t understand. But we’ll break it all down in this section of the guide.
Necessary Documentation for Filing an LLC in Nebraska
There are a number of documents required for filing an LLC in Nebraska. You didn’t think there would only be one, did you? Here are the documents you’ll want to have beforehand.
Certificate of Organization: The very first, and most important, form you need to pick up is your Certificate of Organization. This provides the Secretary of State with information about your company, like your business name, address, purpose and duration, your registered agent’s information, a list of LLC members and their contact information, and whether your LLC is managed by members or managers. You’ll likely be required to submit this form in duplicate, so be sure to make two copies!
Operating Agreement: Many states, Nebraska included, don’t legally require businesses to create operating agreements, but they do highly advise that you create one anyway. You’ll very likely pull it out a lot during the early days of your company because it’s a detailed set of instructions about how your business will operate, and an agreement about the roles and compensation of LLC members. Some information that’s typically included in an operating agreement includes the names, roles and contact information of each LLC member, the contributions of LLC members and their ownership shares, an explanation of the distribution of profits and losses, voting rights and meeting schedules, and detailed instructions on how to add or remove members, and what should happen if a member dies.
Name Reservation Form: To ensure that no other business in the state of Nebraska can use your business name, you must submit an “Application for Reservation of Limited Liability Company Name” form. And while the name of the form is a mile long, it’s not complicated, although it can only be filed by mail in Nebraska.
Employer Identification Number (EIN): Another form you need to pick up is one for an Employer Identification Number, or EIN. An EIN not only identifies your business on tax forms and government documents, it’s necessary if you hire employees or open a business bank account. This is an easy form to fill out, too, and you can get your EIN for free by applying on the IRS website.
Initial Report: Businesses in Nebraska are required to file a Biennial Report, as the name suggests, every 2 years. The first one is sent along with your Certificate of Organization, and it’s called your “Initial Report”.
Publication Notice: New LLCs in Nebraska are required to publish a “Notice of Organization” that runs for three consecutive weeks in an approved newspaper, somewhere in the area of your LLC’s business address. (If your LLC doesn’t have a principal business address, then use a newspaper in your registered agent’s area.) After your notice has run for 3 weeks, you’re required to file an “Affidavit of Publication” with the Nebraska Secretary of State.
Business Licenses and Permits: Depending on the type of goods and services you provide, and your business location, you’ll need to get a variety of business licenses and permits, and maybe some different types of business insurance. Check with city and county clerks to find out which permits and licenses you need, and find out about state licensing requirements from the Nebraska State Business Licensing website.
Tax Registration: You’ll need to register your business with the Nebraska Department of Revenue and have these registrations on-hand when you file for your LLC.
Legal Requirements for Starting an LLC in Nebraska
There are 5 main steps you need to take to form an LLC in Nebraska. Here’s a step by step guide to LLC formation.
- Get a Certificate of Organization Form: Because your Certificate of Organization is essentially an application to get your LLC, the first step of LLC formation is getting your hands on this form. (It’s sometimes called an Articles of Organization form, but in Nebraska it’s mostly referred to as a Certificate of Organization form.) Luckily, you can obtain one from the Nebraska Secretary of State
- Choose an Appropriate Business Name: Business names have legal requirements, such as being unique to your business. You can’t use a name if any other business in the state is already using it. But you can quickly perform a search of the business name database on the Secretary of State’s website. Furthermore, your LLC must have “Limited Liability Company”, or some abbreviated version of the words in its name (like “LLC”.) Once you’ve chosen a business name that isn’t already in use and meets all of the legal requirements, you must also file an Application for Reservation of Limited Liability Company name form.
- Choose Your Registered Agent: LLCs are required to have registered agents in Nebraska. A registered agent is someone who agrees to receive legal notices, such as service of process, as well as mail from government agencies on behalf of your company. You have two options when it comes to designating a registered agent: pick someone you know and trust for the role (like a friend or family member), or hire a professional registered agent service. Many business owners choose professional registered agent services due to the fact that registered agents play a critical role in ensuring that businesses maintain their good standing status with the Secretary of State.
- Choose Your Address: Your business address and personal address should be two entirely separate things. This is because your business address is listed on the public record, which can create security problems if you’ve chosen to use your personal address as your business address. You could ask your registered agent for permission to use their address, or get a virtual office or address instead.
- Sign and File Your Certificate of Organization: Once you’ve made sure that all of the information on the form is accurate, it’s time to sign on the line and submit it to get your LLC. Alternatively, if you don’t want to be listed as your company’s LLC Organizer, or don’t want to deal with the hassle of filling out and filing the document yourself, you could hire an LLC formation service.
Time Frame for Establishing an LLC in Nebraska
How long does it take to get an LLC in Nebraska? We’ll break down everything you need to know about LLC formation time frames in this section.
How Long Does the Initial Paperwork Take in the State of Nebraska?
Approval times take about a week if you choose to file by mail, or 2-3 business days if you file online.
Processing Times in the State of Nebraska
Processing time takes 2-3 business days for both mail (plus mail time for mail filing) and online filing.
Common Delays in the LLC Formation Process in Nebraska
Here are some things that can cause delays in the LLC formation process in the state.
The Time of Year: Both the end of the year and the beginning of the year are high-volume filing periods, and it causes processing delays while the clerks go through all the filings. If you file during these times, you can expect delays.
Non-Business Days: You shouldn’t file on or near holidays or the weekend. Why? Well the Secretary of State’s office will only process filings on business days, so filing on or near weekends or government holidays means you’ll have to wait until they get to your filing.
Documentation Errors: If your documents contain errors, are missing information, or even don’t contain the correct number of copies, then the Secretary of State will likely reject your application. If that happens, you’ll have to fill it out again and re-submit it. That can certainly slow down your formation!
Expedited Processing for LLC Formation in Nebraska
If you want the fastest possible formation times, then expedited filing is your best option. We’ll give you all the information you need about expedited processing in the state.
What Are the Expedited Options Available?
There’s only one expedited option available in Nebraska, and not many people know about it. The Secretary of State offers expedited processing on walk-in filings. But to get this option, you actually have to travel to Lincoln.
Additional Costs for Expedited Services in Nebraska
Ordinarily you have to pay an extra fee for expedited services, but Nebraska does not charge a fee for expedited processing on walk-in filings. That’s right, it’s free!
Comparing LLC Formation Time Frame in Nebraska with Other States
There are all sorts of reasons for comparing formation times between states. For one thing, how will you know how fast or slow your state’s time frames are if you don’t? And if you’ve considered a foreign LLC, then you definitely need to know how other states compare.
Brief Comparison with Key States
Nebraska has processing times of 2-3 business days on both mail and online filings, as well as an unspecified expedited processing option on walk-in filings, which are sort of a rarity.
Since we don’t actually know how fast Nebraska’s expedited processing is, we’ll just give you some of the fastest processing times out there. West Virginia, Nevada, Montana, Michigan and Delaware all have 1 hour expedited processing times. A handful of states have immediate processing if you file online. And Ohio and Kentucky have 1 day processing on mail filings.
Conversely, it takes 7 days in Maryland and 5 days in Arizona for expedited filing. Online filings in Washington take 12-14 days, 13-15 days in Texas, and 14-16 days in Arizona. As for mail filings, they take 4-8 weeks in Texas, 4- 6 weeks in Oregon, 5-8 weeks in Maryland, and 8 whole months in New York.
Why is Nebraska a Favorable Place for Forming an LLC?
Nebraska is a good state to start an LLC because it has a low cost of living, a low cost of business, low energy costs, and because of its location transportation in the state to any other state or coast is relatively easy and quick.
