One of the first steps you should take if you want to start a Nebraska limited liability company (LLC) is to set a budget. But figuring out exactly how much you need to pay can be tricky.
That’s why we wrote this article about the expenses associated with forming an LLC in Nebraska.
By the time you reach the end of this article, you will know:
- The cost of starting a Nebraska LLC
- Additional expenses you should consider
- How to choose the right formation method for your LLC
Keep reading to learn everything you need to know about Nebraska LLC formation costs.
Total Nebraska LLC Cost – Starting at $165
According to the Nebraska Secretary of State’s Forms and Fee Information, the bare minimum cost of starting a Nebraska LLC is around $165.
This includes three items:
- Nebraska Certificate of Organization filing fee: $100 (online filing only)
- Nebraska Notice of Organization publishing costs: Starting at about $40
- Nebraska Proof of Publication filing fee: $25 (online filing only)
Some LLCs will be required to register with the Nebraska Department of Revenue in order to collect income taxes, but doing so is free of cost. You may also need to obtain professional and local business licenses, the costs of which vary.
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Nebraska LLCs – the Basic Costs
The total cost of forming an LLC in Nebraska will vary based on a few different factors. However, the lowest possible cost is about $165. In the sections below, we’ve explained what your required LLC formation expenses might be.
Certificate of Organization Filing Fee — $100 to $110
A Certificate of Organization is the legal document you will use to officially start your LLC. To form a Nebraska LLC, you must submit a certificate to the Secretary of State. But the process is easier than you might think. All you really need to do is list basic information about your business.
Nebraska does not provide a standard certificate of organization form. Instead, you must make a document that complies with the state’s requirements or hire someone to make one for you.
The filing fee for a Nebraska Certificate of Organization is $100 if you file online and $110 if you file in-office.
Notice of Organization Publishing Costs — Approximately $40 to $250
Nebraska law requires new LLC owners to publish a Notice of Organization after they file their certificate of organization. To do this, you must run an ad for three successive weeks in a legal newspaper of general circulation in the county where your LLC has its registered office.
Most legal newspapers will assess a “per line” fee, and different newspapers will charge various rates. But in general, it usually costs between $40 and $70 to run an ad in smaller counties and between $100 and $250 to publish in larger counties.
Proof of Publication Filing Fee — $25 to $30
Once your ad has run for three weeks, the newspaper should send you Proof of Publication, which is usually an affidavit. You must then file your proof of publication with the Secretary of State. You can submit the document online for a $25 fee or in-office for a $30 fee.
State Tax Office Registration — Free
Nebraska law requires businesses that engage in retail sales, rent or lease tangible personal property, or offer certain taxable services to charge sales taxes. And to collect taxes from your customers, you must register with the Nebraska Department of Revenue.
We recommend that you register online. There are no registration fees or other charges.
Professional Licenses and Business Permits — Variable
Under Nebraska law, businesses need a state-level license or permit to operate in certain industries. You can review Nebraska’s business licensing page to learn about these requirements.
You might also need to obtain a local permit or business license for your LLC. Reach out to your local government for more information.
Nebraska LLCs – Optional Costs to Consider
On top of your mandatory formation costs, you should also consider investing in some extra expenses. While not technically required, incurring these costs can help you start and run your LLC more efficiently.
Expedited LLC Filing Fees — N/A
Nebraska does not offer expedited processing for LLC filings. However, online filings will be processed first. So, if you are in a rush, filing online will speed up the process.
Registered Agent Fee — about $100 per year
Nebraska law says that all LLCs must appoint a registered agent to accept legal documents for the business. You will include your registered agent’s information in your certificate of organization at no additional cost. But if you ever need to change your agent, there is a $25 fee if you file online or a $30 fee if you file a hard copy.
New business owners often name themselves as the registered agent for their LLCs. But many don’t know that doing so can cause problems for them. Registered agents are required to be available during regular business hours to receive papers. Their addresses must also be listed online, which usually leads to a lot of junk mail.
To avoid these issues, we suggest using a professional registered agent service. These businesses only cost about $100 per year, and they will handle all of the registered agent tasks for your LLC.
Check out our Best Registered Agent Services article for some of our recommendations.
Operating Agreement — Variable
An LLC operating agreement is a contract between the members that details how the company will operate. They often include important info such as the rights and responsibilities of each member and the process to join or leave the LLC.
Nebraska does not require LLCs to make operating agreements. Still, we strongly suggest that every new LLC owner have one. Although the law allows you to make your own Nebraska LLC operating agreement, it’s probably not the best idea unless you have prior experience.
One option is to retain an attorney to write an operating agreement for your LLC. This approach will provide you with a premium product that is customized for your business. However, lawyers are expensive. So if you want to save some cash, an LLC formation service can make your LLC operating agreement for as little as $39.
DBA Fee — $100 to $110
Many LLC owners run their businesses under “doing business as” or “DBA” names. A DBA is a name that is used to refer to an LLC that is not its legal name. For instance, entrepreneurs often drop the “LLC” from their business’ official legal name so it will seem less formal.
Nebraska calls DBAs “trade names.” If you want to use a DBA for your Nebraska LLC, you must register a trade name with the Secretary of State.
Name Reservation Fee — $30
If you have picked the name you want to use for your LLC but aren’t ready to submit your certificate of organization, Nebraska allows you to reserve a name for 120 days. This will stop others from taking the name during this time.
You can reserve an LLC name by submitting an Application for Reservation of Limited Liability Company Name to the Secretary of State. Nebraska does not allow you to reserve a name online. So, you must file a paper copy of the form.
Domain Name — about $20 per year
Most business owners want to make a website for their new LLCs. And in order to do so, you will need to buy a domain name. In today’s market, domains are inexpensive and widely available.
We suggest that you purchase your domain name ASAP. This will keep other people from buying it before you. For instance, “domain squatters” will buy the possible domains for a new LLC and then resell them for a much higher price.
You can get a domain from GoDaddy.com or a similar website for approximately $20 to $50 per year. Plus, these businesses often run sales, so you may be able to get one for even less.
Getting an Employer Identification Number (“EIN”) — Free
EINs are 9-digit identification numbers that the Internal Revenue Service assigns to businesses. You can think of your EIN as your LLC’s social security number. Although the law requires some LLCs to have EINs, others do not need to get them.
Even if you don’t have to get an EIN, we suggest that you apply for one. Most banks require an EIN to open a business account. Using an EIN can also protect you from identity theft by keeping your SSN secure.
Foreign LLC Qualification Fees — about $100 per extra state
If you want to expand your company beyond Nebraska’s borders, make sure you plan for some additional costs. You won’t need to form a new LLC in every state where you operate, but you will need to register as a foreign limited liability company.
Foreign LLC filing fees differ among states, but they usually cost about $100 per state.
Writing Formation Costs Off
You can typically deduct your LLC formation expenses from your income taxes as business startup costs. The IRS has provided significant guidance on this issue, so we suggest reviewing the IRS website to learn more.
LLCs are considered to be “pass-through” tax entities unless you choose a different classification. This status lets LLC owners deduct up to $5,000 in startup expenses in the year they start their business.
Megan decides to start a single-member LLC and open a vintage clothing shop in Omaha, Nebraska, which does not have a licensing requirement. Her formation costs are as follows:
- Nebraska LLC Certificate of Organization (online filing): $100
- Operating Agreement: $60
- Nebraska Registered Agent service Fees: $110
- DBA Fee (online filing): $100
- Name Reservation Fee: $30
- Web Domain Costs: $20
As a pass-through entity, the LLC won’t pay any income taxes. Instead, Megan will report her earnings from the LLC and any deductions on her own state and federal income taxes.
Megan’s total formation costs were $420. Before deducting these expenses, her total taxable income was $44,000. However, by deducting her startup costs, she lowers her taxable income to $43,580. This will drop her 2023 federal income tax bill from $5,429 to $5,336.
Even though this is not a substantial difference, business owners who regularly deduct their expenses will realize significant tax savings over time.
Cheapest Way to Start an LLC in Nebraska
When deciding on a formation method for your new LLC, it’s vital that you consider your LLC’s distinct needs. We’ve outlined some of the most popular methods below to help you choose.
Formation Service – $39 + state fees
One option is to hire an LLC formation service to start your business for you. While these services aren’t law firms, they specialize in the business entity formation process.
A business formation service is a practical option for most new LLCs. The benefits of this strategy include:
- They’re easy. In most cases, a formation service will have helped hundreds of people through the exact process you are struggling with now. They have all the documents, information, and expertise you need right on hand.
- They don’t cost much. Because formation services have such a large volume of business, they don’t have to charge their clients that much money.
- They’re reliable. All of the formation services’ products and procedures have been tested hundreds of times over in the real world. That kind of experience should give you peace of mind and confidence going forward.
- They’re fast. Formation services have seen almost every business formation situation already. Chances are, they have many solutions for you that are ready right now before you even know you need them.
However, LLC formation services aren’t the best choice for everyone. This method’s drawbacks include:
- They’re not the best solution for complex LLCs. If you are forming a complicated company or one in a heavily regulated industry, you will have concerns that probably need more focused expertise in that area of business.
- Even if a formation service is a good fit, you can expect upselling. Formation services have to make money too, and some of them may pressure you to buy formation products or business services you don’t need. Even when you are using a formation service, you need to be a smart and informed consumer.
Using a professional LLC formation service can be a great way to set up a business. Check out our Best LLC formation services article for some of our suggestions.
The most dependable option is to hire a lawyer to start your LLC. This approach allows you to receive expert formation services that are customized to your business. Just remember that this approach can be pricey. Attorneys usually bill for their services by the hour, often at a rate of several hundred dollars per hour.
Even though it is expensive, working with a lawyer comes with significant advantages.
- Lawyers help you manage risk. If you are starting a business with complicated legal issues, hiring a lawyer would be the best choice.
- Lawyers offer more customization when you need it. Do you need specific things put in an operating agreement? Is your company going to have a unique ownership structure? You may need an attorney to make sure these issues are handled properly.
But the disadvantages of this approach usually outweigh the benefits for most LLC owners:
- Lawyers cost more than any other option. The price tag alone should convince you that if you don’t need a lawyer, it’s not worth hiring one.
- Finding a lawyer takes a long time. Getting a lawyer who specializes in what you need, costs what you’re willing to pay, and can work with you well is a tall order.
- Lawyers also take longer to form a business than a formation service. Because lawyers are also very careful people, they will generally take much longer to form your company than non-lawyers would. Fortunately, most people don’t need a lawyer. In 90% of cases, a formation service will do just fine.
Do it Yourself
Another option is to start your LLC on your own. Just make sure you account for the value of your time. Any time you spend on LLC formation documents can’t be spent improving other aspects of your business.
The advantages of the DIY formation method include:
- Personal knowledge. A DIY business owner will learn a lot about the process while forming their own business, and they probably will retain that knowledge for years to come.
- It costs less upfront. If you don’t account for the value of your time, a DIY solution is the cheapest option.
But don’t forget to consider the disadvantages of this alternative:
- You’re losing money when you consider how much time it takes to DIY. If you figure out that your time is worth $30 per hour, and you take 20 hours to complete your business formation, you have essentially spent $600 on business formation.
- There’s the risk of making a mistake. DIY business owners can easily make a mistake with all the paperwork that can cost them even more time and money.
- It’s a headache. State workers are very helpful, capable people. But they will also tell you that the laws and rules governing business formation are not easy, and they follow those rules for a living. It’s going to be even harder for you.
Annual Nebraska LLC Fees: How Much Will it Cost to Maintain your LLC?
Nebraska law requires LLC owners to file a biennial report with the Secretary of State on odd-numbered years. You can submit your report online for a $25 filing fee or file a paper report for a $30 fee.
You might also need to occasionally renew your LLC’s state and local business licenses and permits.
Some of your optional costs may also be due annually. For instance, you might be required to pay either of the following:
- Registered agent service fee: approximately $100
- Domain name registration: $20 to $60
How Much are LLC Taxes in Nebraska
Since LLCs are pass-through tax entities by default, they typically aren’t subject to state or federal income taxes. Rather, the LLC’s owners report their profits on their personal income tax returns.
However, some LLC owners elect to have their LLCs taxed as corporations. If you choose to do so, your LLC will be required to pay Nebraska corporation income tax.
Nebraska LLC Formation Costs Quick Links
- Nebraska Online Filing
- Nebraska Forms and Fee Information
- Nebraska Secretary of State
- Nebraska Department of Revenue
- IRS — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
Nebraska LLC Formation Costs FAQs
How much does it cost to start an LLC in Nebraska?
The minimum cost is around $165. But, based on your LLC’s location and industry, it might cost more.
What is the cheapest way to start an LLC in Nebraska?
A do-it-yourself method is the least expensive in terms of money spent. But if you consider the value of your time, the most cost-effective approach is often an affordable LLC formation service.
Do I need to hire an attorney to form an LLC in Nebraska?
No. You won’t need an attorney to start most LLCs. A DIY approach or an LLC formation service will be appropriate for the average LLC.
Can I pay to form an LLC more quickly in Nebraska?
No. If you file online, your filing will be processed first. So, you can simply use this filing method if you want a quick turnaround.