How to Form a Nebraska Professional LLC

What is a Nebraska Professional LLC?

The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. In Nebraska, professionals can form an LLC for the purpose of rendering a professional service, which is any personal service to the public which requires a license or other legal authorization. Such services include, but are not limited to, services rendered by certified public accountants, dentists, osteopathic physicians, physicians and surgeons, veterinarians, real estate brokers, associate real estate brokers, real estate salespersons, or attorneys at law.

The Nebraska PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.

PLLCs in Nebraska have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.

An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.

Forming a PLLC in Nebraska (in 6 Steps)

Step One: Choose a PLLC Name

Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:

Legalities

In Nebraska, the name of a professional LLC must adhere to the same naming requirements as all other LLCs in the state. That is, the name must contain the words “limited liability company” or “limited company” or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.” “Limited” may be abbreviated as “Ltd.,” and “company” may be abbreviated as “Co.”

Explanatory Naming

Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”

Do You Like It?

At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.

Name Availability

The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. To check if a name is available, you must submit a written request to the Secretary of State’s office by e-mail at sos.corp@nebraska.gov, fax at (402) 471-3666, or mail at P.O. Box 94608, Lincoln, NE 68509-4608. You can also reserve a name by submitting a request in writing to the Secretary of State. An Application for Reservation of Limited Liability Company Name is available on the Nebraska Secretary of State’s website. The filing fee is $15.00 and the reservation period is 120 days.

Step Two: Designate a Registered Agent

Every PLLC in Nebraska is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.

The registered agent of a Nebraska limited liability company must be an individual who is a resident of Nebraska or an entity with authority to transact business in Nebraska. The registered agent’s office must be identical to the professional LLC’s registered office.

Without a registered agent, you could lose your good standing with the state of Nebraska, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.

Our Recommendation

At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.

Step Three: File Formation Documents with the State

Once you are ready to form your Nebraska professional limited liability company, you will fill out the Certificate of Organization.

This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:

• Name of your professional LLC
• Street and mailing addresses of the initial registered office
• Name and street and mailing addresses of the initial registered agent
• Professional service your professional LLC’s members, managers, professional employees, and agents are licensed or otherwise legally authorized to render in Nebraska
• Any other provisions agreed to by the members of the professional LLC

The Certificate of Organization can be filed online through Nebraska’s Corporate Document eDelivery system or by mail or in person with the Nebraska Secretary of State’s Corporate Department.

Note that before rendering a professional service, your professional LLC must generally also deliver to the Nebraska Secretary of State a certificate of registration issued to the professional LLC by the regulatory body of the particular profession for which the company was formed. The certificate of registration must:

• set forth the name and residence address of every member, manager, professional employee, and agent of the company who is required by law to be licensed to render the professional service for which the limited liability company is formed as of the last day of the month preceding the date of delivery of the certificate, and
• certify that all members, managers, professional employees, and agents of the company who are required by law to do so are duly licensed to render the professional service for which the limited liability company is formed.

If the licensing records of the applicable regulatory body are electronically accessible to the Secretary of State, a certificate of registration is not required. Instead, the professional LLC must deliver to the Secretary of State an application setting forth the names of all members, managers, professional employees, and agents of such limited liability company who are required by law to be licensed as of the last day of the month preceding the date of application and deliver updates to the Secretary of State annually thereafter.

Cost to Form a PLLC

Nebraska charges a filing fee of $100 for the Certificate of Organization plus a recording fee of $5 per page. An additional $2.00 fee per document also applies for online filings.

Processing Time

If you file your Certificate of Organization online, it will be reviewed within 1-2 business days. Filings by mail generally take 3-5 business days to process.

Step Four: Create an Operating Agreement

After you register a PLLC in Nebraska, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.

When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.

An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:

• Individual members’ ownership percentages
• Rights and responsibilities
• Voting powers and meeting guidelines
• Allocation of profits and losses
• Management rules for the PLLC
• Provisions for buying a member owner out, or transferring their shares in the case of illness or death

Step Five: Handle Taxation Requirements

Federal Requirements

The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.

For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.

State Requirements

Your professional LLC will have the same filing status for Nebraska tax purposes as for federal tax purposes. This means that if your professional LLC elects to be treated as a corporation for federal tax purposes, it may be subject to corporate income tax in Nebraska as well. Other state-level taxes may also apply to your professional LLC, depending on its business activities. For more information about taxes in Nebraska, you can visit the Nebraska Department of Revenue’s website. The Department of Revenue also offers a number of online filing and payment options for taxpayers in the state.

Local Requirements

Depending on where in Nebraska your business is located, you may also need to pay some local taxes. You should contact the city and county in which your professional LLC is located to confirm whether any local taxes apply to your business. Contact information and resources for four of the largest cities in Nebraska are available online: Omaha, Lincoln, Bellevue, and Grand Island.

Step Six: Obtain Business Licenses and Permits

Nebraska does not have a state-level general business license. However, you may still need one or more local licenses or permits. You should contact your city and county to confirm whether any licensing requirements apply to your business. You will also likely need to obtain the appropriate license or authorization from the regulatory body overseeing the profession for which your professional LLC was formed. More information about business licensing in Nebraska can be found on the State of Nebraska’s website.

Would You Prefer a Professional Form Your PLLC?

If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.

Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.

Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.

Next Steps: What to Do After Creating a PLLC in Nebraska

Open a business bank account

We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.

Business insurance

Subject to limited exceptions, employers in Nebraska are required to obtain workers’ compensation coverage for their employees. If you intend to hire any employees for your professional LLC, you should visit the Nebraska Workers’ Compensation Court website to learn more about the workers’ compensation requirement and your obligations as an employer. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.

Understand income reporting

Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.

You’ll report your income on an income tax return, though the specific form you use will depend on your professional LLC’s tax status. You can find Nebraska’s various income tax forms on the Department of Revenue’s website.

Understand annual reporting

All LLCs in Nebraska are required to file a biennial report by April 1 of each odd number year. The biennial report will become delinquent if not filed by June 2 of the reporting year. A notice to file the report will be mailed to your registered agent on record, and if you fail to submit the biennial report by the delinquency date, your professional LLC will be administratively dissolved.

Find an accountant

We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.