Entrepreneurship is exciting—the thrill of developing a winning product or service, bringing that idea to life, and making life better for your clients—it’s fun. But unfortunately, it’s not free. Long story short: starting a business has a price tag. LLCs are no exception.
If you’re hoping to start an LLC in Nebraska, you’ll quickly learn that you’ll have a pretty long list of fees for forms, licenses, and applications that you’ll need to get started. Some of those are optional fees, and some are unavoidable. In this guide, we’ll walk you through all the costs you can expect when starting a Nebraska LLC. By the end, you’ll have a clear picture of how your new business will impact your wallet.
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What’s the least amount I have to pay to form an LLC in Nebraska?
If you’re crunching the numbers before diving right in, good on you! Planning ahead is a surefire way to start your business off on the right foot. But let’s make one thing clear: the phrase “cost to start an LLC” is a bit deceptive. That’s because you don’t want to get stuck focusing on the “day one” expenses of business.
That’s right—when budgeting for start-up costs, you need to account for the costs you’ll pay today and the costs you’ll pay a year or two down the road.
So let’s talk start-up costs and ongoing costs for your Nebraska LLC. But to keep things simple, here we’ll cover the non-negotiable costs. Later on, we’ll talk about services that are nice to have (but you can live without if you have to).
NE LLC Start-up costs
There are two primary start-up costs in Nebraska. The most important one is the Articles of Organization. The fee is $100. But whether that cost seems like pocket change or an expense you’ll need to budget for, it’s an unavoidable one. After all, the Articles of Organization is what officially forms your business in the state. Without it, you’re not a recognized business.
A lot of Nebraska LLCs will also need to get licenses in order to run a compliant business. For starters, there are general business licenses, but you won’t get them at the state level. Instead, Nebraska allows its cities and counties to require general licenses if they so choose. So you’ll need to check with your local government to learn if a license is required in your industry.
Then there are professional and occupational licenses to consider. Depending on your industry, you might be required to apply for a license from one of the state’s many regulatory boards. The Licensing Division is a great place to start your search (unfortunately you’ll have to do your own research to learn which apply to you).
Since there is such a big variety of local and professional licenses, it’s impossible for us to list all of the application fees here. But it’s reasonable to expect that you’ll have to pay an application fee for each license.
Ongoing costs for an LLC in NE
If your business lasts (and we’re confident it will), then you’ll have several ongoing costs. These include license renewals, annual reports, and taxes. Let’s dig into those prices and fees.
License renewals
Thankfully, you don’t have to worry about renewing a state general business license, but you might have to renew your local or professional licenses. Each Nebraska licensing board and each county has its own policies for renewals, though, so we can’t really list them here. This guide would be tedious if we did. When you obtain your licenses, we recommend taking note of the renewal requirements for your industry and your location so none of the fees surprise you.
Annual taxes
In Nebraska (and any state, for that matter), one of the biggest annual costs you’ll have will be taxes. And one of the biggest taxes is the state income tax. If you’re taxed as a corporation, you’ll pay a rate ranging between 5.58% and 7.81%. The individual rates between 2.46% and 6.84%. So long story short, the size of your tax burden will depend on your taxation structure and your income totals.
If you’re involved in retail sales, you’ll need to collect and pay the state sales tax. Nebraska charges 5.5%, but individual cities and counties are allowed to add surcharges. So it’s not uncommon for the sales tax to be as high as 7% or more.
Last but not least, there may be some miscellaneous taxes your business will be subject to. For example, Nebraska has unique taxes for lodging, occupation taxes, and more. But we won’t go into too much detail here; learn more about these taxes at the Nebraska Department of Revenue.
Annual report
Most states require LLCs to file some version of an “annual report,” or a document that informs the state about the current standing of your business. This document is usually required in addition to annual tax reports, since it usually includes information about your business address, members, your registered agent, and so on.
In Nebraska, the annual report is due by April 1, and there’s a $15 fee each time you file (plus a $3 convenience fee for credit card processing). If you file on time, then that’s all there is to it. But if you file after that date, you’ll also need to pay a late fee. Businesses that file after June 1 will be labeled as delinquent. That’s a bad place to be, since getting reinstated as a compliant business is a serious hassle. So it’s well worth the effort to file on time.
What are the discretionary costs to form a Nebraska LLC?
When you’re starting your business, your budget is usually pretty tight. Prioritizing costs can get tricky. The costs we listed above are unavoidable. Well, technically, you can avoid them, but you’ll be heavily penalized if you do. And there’s not much point to spending all that money on starting a business only to knowingly let it be dissolved because you didn’t pay your ongoing costs.
But if you can help it, doing the “bare minimum” is probably not the best way to start your business. There are plenty of discretionary costs you can pay for certain services that make life easier. Here, we’ll dig into those costs—and why you might consider paying them.
1. Name reservation application
Naming things can be a bit tricky; after all, sometimes inspiration is a little lacking! And since Nebraska doesn’t allow you to use a name that someone else has already claimed, you have to work even harder to pick one that’s unique, memorable, and just right for your business.
It’s a multi-step process, really: you have to brainstorm name ideas, choose just the right words, meet state name requirements, and of course, ensure that the name isn’t already in use (you can check using a Corporate & Business Search).
If you’re like a lot of people, you probably want to ensure that your hard work doesn’t go to waste once you’ve created the perfect name. So you have to lay claim to your new business name. You can do so either by filing your Articles of Organization, or by filing an Application for Reservation of Limited Liability Company Name. You should only file this form if you’re not yet ready to file your Articles. Otherwise, you’d be wasting your hard-earned cash. Nebraska requires a $15 fee for this application, but it protects your chosen name for 120 days.
2. Obtaining a Trade Name
Wait—didn’t we just cover business names? Yes. But there’s a distinction: your business name, which you’ll write in on your Articles of Organization, is the legal name of your business. A trade name, sometimes called a DBA, an assumed name, or a fictitious name, is like a nickname for your business. For example, your legal name might Joseph Smith, but your friends call you Joe for short. Joe is a perfectly valid name, but you can’t put it on legal paperwork. You’d have to legally change your name to do so.
A Trade Name acts kind of like a nickname for your business; some LLCs and corporations also use Trade Names to establish new product lines or new “businesses” under the LLC “parent company.” But regardless of why you use a Trade Name, if it differs from your legal name, you need to register it before you can use it.
Quick note: if you want to register your Trade Name, you first need to ensure that it’s available for you to use. Nebraska does not allow you to use a name if it matches or contains a name that’s already in use. That restriction is a bit picker than some other states.
Once you’ve determined that your name is available, you can register it by filing an Application for Registration of Trade Name. There’s a $100 fee for this application, but thankfully, your registration doesn’t need to be renewed for ten years.
That said, long before you renew, you’ll need to publish a notice of your trade name. Essentially, you’ll publish an ad in a local newspaper to let the public know that you’re using your name. This must be done within 45 days of registering your name. After you’ve done so, you should file an affidavit with the Secretary of State, alerting them to the fact that you’ve fulfilled the requirement. For more information on this process, check out our guide to Nebraska Trade Names.
3. LLC formation services
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Paperwork is a massive hassle. And unless you’re starting an LLC to help other Nebraskans with their paperwork, odds are you don’t want to deal with much paperwork yourself.
The bad news? Paperwork is an unavoidable part of starting a Nebraska LLC: the Articles of Organization, the annual report, license applications—the list goes on and on. The good news? You can hire an LLC formation service to do the pesky paperwork for you.
Of course, there’s some cost involved. And while there are a lot of great LLC formation services, they aren’t all created equal. And they all have different price points.
Many LLC formation services offer a wide variety of options, with ZenBusiness offering packages starting at $49. You can also take a look at other well known services like LegalZoom, Northwest, and Incfile that have other types of pros.
These services are completely optional; you can DIY your Nebraska LLC formation. But many entrepreneurs find the time saved is worth the money. If you do opt to hire a service, please make sure you take the time to understand what you’re buying. Some services charge one-time fees, and others tack on “free services” that will cost you next year. If you don’t read the fine print, you can get slapped with unexpected service fees. And surprise bills are never fun.
4. NE Registered agent services
Nebraska law clearly states that every LLC must designate a registered agent to act as a middleman between your business and the state. Long story short, the registered agent accepts service of process (and any other official communication from the state) on your behalf.
Technically, this is another thing you can DIY; Nebraska allows you to serve as your own registered agent. However, in our opinion, it’s worth the expense to hire a registered agent.
Why? For starters, a registered agent’s address becomes part of the public record; anyone in the state can find that address. That leads to spam mail (sometimes worse). Plus, a registered agent must be present at the registered address during all standard business hours. If you serve as your own, you’d be tied down to your location constantly. A registered agent service prevents those annoyances. A service will also help you keep track of annual filing requirements, license renewals, and more.
These services typically charge an annual fee. For example, annual fees for our top 4 Nebraska registered agent services range from $99 to $299 per year depending on the service you choose. That said, some offer the first year free if you use them as an LLC formation service.
Quick Note: If you need to later down the line, you can always change your registered agent.
5. Expedited filing fees
In Nebraska, it usually takes about 9 business days (upon receipt) for the Secretary of State to process your documents. Granted, that time can vary based on order volume, but they’ll usually approve or reject your Articles in just over a week.
If that sounds like too long to wait, Nebraska allows you to expedite your filings for a $50 fee. That cuts your processing speeds down to 2 business days. Since that expediting fee isn’t unreasonable, it may be worth the extra expense to expedite your filings, but patience works, too. You can let your budget and your timetable be the deciding factors.
6. Business attorneys
Starting a business is a complicated process. And it’s a legal one. We do our best to make the process seem less daunting with guides like this one. But at the end of the day, we can’t write a guide that would cover every single question every business will ever face. That’s because your business is unique.
Business attorneys, however, can talk you through all the nuances of forming and running your business. In many cases, the advice of an attorney can save you thousands by helping you avoid expensive legal mistakes.
However, the upfront costs of hiring a business attorney can be pretty pricey. For example, many attorneys charge per hour, with rates ranging between $150-$350. Others offer “LLC formation packages” for flat rates that fall between $500-$2000. And of course, those fees vary based on the attorney’s experience, location, and so on.
If you’d like to hire one, we recommend checking out sites like Avvo.com. Their database is nearly comprehensive, so it’s a great way to search Nebraska business lawyers. You can also narrow results by location, cost, overall satisfaction rating, and more. It’s the best place to look to find the right legal consultation for your business.
Conclusion
Long story short: starting a Nebraska LLC can be a pretty pricey endeavor. If you look at each cost separately, it doesn’t seem too bad (even the $100 for the Articles of Organization is pretty manageable). But when you add them all up or tack on some additional services, the total price tag grows pretty quickly. Thankfully, since you’ve read this guide, you know what you’re up against. And sometimes, knowing is half the battle—and now you’re armed with all the information you need to budget the start-up costs so you can start your Nebraska LLC off on the right foot. We wish you and your new business the best!