How to Start a Business in Nebraska

With its low business costs and tax-friendly policies, Nebraska is an ideal place to turn your entrepreneurial dreams into reality. The state's supportive environment makes it easier for you to focus on what matters most—growing your business!

We'll guide you through the steps, from understanding legal requirements to setting up your operations. Use our comprehensive guide to confidently start your business and navigate the journey ahead.

Steps to start a business in Nebraska

Create a business plan

Develop a detailed business plan outlining your objectives, strategies, market analysis, financial projections, and operational plans. This document is important if you plan to seek financing and helps keep your business goals on track.

For guidance, consider reviewing the essential steps for starting a small business. Depending on your specific industry, you may find it helpful to use tailored templates, such as a restaurant business plan, coffee shop business plan, or salon business plan.

Choose your business structure

Selecting the right legal structure is important since it can affect your personal liability, tax obligations, and how you raise capital. In Nebraska, there are four common options:

• Sole Proprietorship: Owned by one individual but doesn't offer personal liability protection.
• Partnership: Owned by two or more people, with personal assets not protected against business liabilities.
• Limited Liability Company (LLC): Provides liability protection for personal assets and offers tax flexibility.
• Corporation: A separate legal entity offering liability protection but involving more regulations and requirements.

Register your business with the state

After choosing a structure, make your business official through registration:

• LLCs: File a Certificate of Organization online or by mail. The filing fee is $100 online or $110 by mail.
• Corporations: File Articles of Incorporation. Fees vary based on authorized shares.
• Sole Proprietorships and Partnerships: If operating under a trade name, file an Application for Registration of Trade Name and publish it in a local newspaper.

You'll need to appoint a registered agent with a physical address in Nebraska to receive legal documents on your behalf.

Obtain necessary licenses and permits

Depending on your industry and location, you may need specific licenses or permits:

• State licenses. Certain professions require state licensing, such as healthcare, construction, or childcare services. Check with the Nebraska Department of Labor or relevant state agencies, and review Nebraska labor laws to understand the specific regulations affecting your business.
• Local permits. Contact your city or county clerk's office to learn about local requirements like zoning permits, health permits, or signage permits.

Obtaining all necessary permissions ensures you're operating legally and avoids potential fines.

Set up business finances

Proper financial setup is crucial. Here’s a quick breakdown of the process:

• Obtain an EIN. Apply for an Employer Identification Number (EIN) through the IRS website. You’ll need this number for tax reporting and opening business bank accounts.
• Open a business bank account. Maintain clear records and protect your personal assets by separating your personal and business finances.
• Implement accounting practices. Keep your business finances in check and stay tax compliant by using an accounting software or hire a professional accountant.

Comply with Tax Requirements

Stay on top of your tax obligations:

• Register for State taxes. Sign up with the Nebraska Department of Revenue for relevant taxes like sales tax or income tax withholding.
• Understand your tax responsibilities. Depending on your business activities, you may need to collect sales tax, pay use tax, or withhold employee income tax.
• Consider professional help. Reduce the hassle of navigating requirements and maximize deductions by consulting a tax professional. You can also review tax tips for small businesses to help you manage your tax responsibilities effectively. Understanding the intricacies of tax compliance for small businesses is essential to avoid penalties and keep your business running smoothly.

Obtain business insurance

Protect your business from unexpected events by acquiring a business insurance:

• General Liability Insurance. Covers legal claims against your business.
• Professional Liability Insurance. For service-based businesses, covers claims of negligence or harm resulting from your services.
• Workers' Compensation Insurance. Required if you have employees; covers medical expenses and lost wages for work-related injuries.

Build your team

If you're ready to hire your first employee:

• Understand employment laws. Familiarize yourself with federal and state laws regarding wages, hours, and workplace safety.
• Set up payroll. Run payroll and ensure your employees are paid on time by using e reliable payroll software. Consider reviewing this payroll setup guide to streamline the process.
• Create an employee handbook. Promote a positive work environment by outlining your company's policies, procedures, and expectations.

Market Your Business

Promote your new venture effectively to grow your small business:

• Create a marketing plan. Identify your target audience and develop strategies to reach them effectively.
• Build an online presence. Develop a professional website and use social media to engage with your customers.
• Network locally. Participate in community events, join local business groups, and connect with other entrepreneurs.

Registering your business in Nebraska

Registering your business in Nebraska is important for legitimizing your operations and providing legal protections. It allows you to officially establish your business name, gain access to financial services, and build credibility with your customers!

Proper registration ensures compliance with state laws, so you can avoid potential fines and legal issues in the future. For more information on keeping your business licensed, consider the key areas you need to cover.

Decide on your legal entity

Choosing the right legal entity is a foundational decision that affects every aspect of your business—from day-to-day operations to taxes, to how much of your personal assets are at risk. The legal structure you select determines your ability to raise capital, the taxes you'll pay, and the personal liability you face.

Common legal entities in Nebraska include:

• Sole Proprietorship. Simple to establish, offering complete control to the owner but no separation between personal and business liabilities.
• Partnership. Involves two or more people sharing ownership, profits, and liabilities, with personal assets potentially at risk.
• Limited Liability Company (LLC). Offers liability protection by separating personal assets from business assets and provides tax flexibility.
• Corporation. A more complex structure that provides the strongest protection from personal liability but involves more regulations and administrative requirements. You’ll also be subject to corporate income tax rates ranging from 5.58% to 7.81%.

Consider your business goals, the level of acceptable risk, and consult with a legal professional or business advisor to select the entity that best aligns with your needs.

File formation documents

After selecting your legal entity, file the appropriate formation documents with the Nebraska Secretary of State:

• LLCs: Submit a Certificate of Organization.
• Corporations: File Articles of Incorporation.
• Sole Proprietorships and Partnerships: May need to register a trade name (DBA) with the county clerk.

Additional tip: Choose a unique business name but make sure it complies with Nebraska naming requirements. You can search the Nebraska Business Entity Database to check name availability.

Apply for an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the IRS to businesses operating in the United States. It's essential for:

• Tax purposes. The EIN is used to identify your business for all federal tax filings.
• Hiring employees. If you plan to hire staff, you're legally required to have an EIN for reporting employee taxes.
• Opening business bank accounts. Most financial institutions require an EIN to open a business bank account.
• Establishing business credit. An EIN helps establish a business credit profile separate from your personal credit.

Applying for an EIN is free and can be done quickly through the IRS website. Having an EIN not only keeps your Social Security number more private but also adds legitimacy to your business.

Register for state taxes

Complying with state tax requirements is important for legal operation and financial health. In Nebraska, registering for state taxes ensures you're correctly collecting and remitting taxes, avoiding penalties, and keeping your business in good standing.

You'll need to register with the Nebraska Department of Revenue if your business will:

• Have employees. You'll need to withhold state income taxes and pay unemployment insurance tax.
• Sell taxable goods or services. You must collect and remit sales tax on taxable items.
• Rent or lease tangible personal property. Sales tax applies to rental or lease transactions.
• Provide taxable services. Certain services are subject to sales tax under Nebraska law.

Registration can be completed online through the Nebraska Tax Application. Proper registration ensures you understand your tax responsibilities from the start, helping you manage cash flow and avoid surprises during tax season.

Choosing and registering a business name

Selecting the right name is a key step in establishing your business identity.

Conduct a name availability search

Ensure your desired business name is unique and meets Nebraska's naming guidelines. Search the Nebraska Secretary of State's Business Entity Database. Check for federal trademarks that might conflict with your chosen name.

Reserve your business name (Optional)

If you're not ready to register your business but want to secure your name, you can reserve it for up to 120 days by filing a name reservation with the Nebraska Secretary of State.

Register your trade name with the State

If you plan to operate under a name different from your legal business name, register a trade name (also known as a "doing business as" or DBA) with the Nebraska Secretary of State. This ensures your business complies with state laws and informs the public of your company's true identity.

Complying with ongoing requirements

Running a business isn't just about getting started; it's about maintaining compliance with federal, state, and local regulations. Complying with ongoing requirements is essential to:

• Maintain good standing. Failure to meet state requirements can result in penalties, fines, or even dissolution of your business entity.
• Avoid legal issues. Staying compliant reduces the risk of lawsuits and legal disputes.
• Build trust. Compliance demonstrates professionalism and builds trust with customers, partners, and investors.
• Stay eligible for funding. Lenders and investors often require proof of compliance before providing financing.

By keeping up with reporting obligations, tax filings, and license renewals, you ensure your business operates smoothly and avoids unexpected setbacks.

File biennial reports with the State

Nebraska requires LLCs and corporations to file biennial reports to maintain good standing:

• LLCs: File by April 1 of odd-numbered years, with a $10 filing fee plus $3 for online filing.
• Corporations: File by March 1 of even-numbered years, with fees varying based on paid-up capital.

Maintain accurate business records

Keep detailed records of all financial transactions, tax filings, and corporate documents:

• Income and expenses
• Bank statements
• Tax returns
• Meeting minutes (for corporations)
• Operating agreements or bylaws

Accurate records help you manage your business effectively and ensure compliance with regulations.

Renew licenses and permits annually

Many licenses and permits issued by state and local authorities are valid for a limited time and require renewal, often annually. Renewing your licenses and permits is critical because:

• Legal operation. Operating without valid licenses or permits can result in fines, penalties, or forced closure.
• Insurance coverage. Some insurance policies may not cover incidents if your business is not properly licensed.
• Reputation management. Having current licenses demonstrates legitimacy and reliability to customers and clients.
• Compliance with changes. Renewal processes often require updating or verifying information, ensuring your business complies with any new laws or regulations.

Set reminders and keep records organized so you can go through the renewal process without a hassle. Staying proactive helps prevent lapses that could disrupt your business activities.

Start your Nebraska business today

Starting a business in Nebraska is an exciting opportunity, thanks to the state's supportive environment for entrepreneurs. By following these steps and staying compliant with state regulations, you're on your way to turning your vision into reality.

As you focus on growing your business, let Homebase help you manage your team more efficiently. From scheduling and time tracking to HR compliance, Homebase provides the tools you need to streamline operations and empower your employees. With Homebase handling the administrative tasks, you can dedicate more time to what truly matters—building your business's success.

Get started with Homebase today and take the first step toward a smoother, more productive business journey.