Starting a business in Nebraska can be an exciting endeavor. However, there are several steps that must be undertaken in order to be able to legally open your doors. Depending on your type of business, there may be federal, state and local agencies that will need to be contacted, each with its own set of requirements and paperwork. It is a very good idea to assemble a number of individuals who can offer legal, financial and tax advice so that the choices you make are informed and tailored for your particular business and situation. The Small Business Administration states that most new businesses fail because they lacked adequate planning or proper preparation. Many new business owners get into trouble with taxes, registration issues or fail to obtain the necessary licenses. The following will offer you the necessary information to help you plan the start of your new business in Nebraska.
Determining Your Nebraska Business Structure
One of the first things you are going to have to decide is how you will organize your business. There are many types of structures, but the most popular structures are sole proprietorships, limited liability companies, S Corporations and general partnerships. Sole proprietorships are for businesses that will not be hiring employees and is owned by one person. General partnerships are like sole proprietorships, for the most part, but allow for more than one person to own the business. Limited liability companies will allow you to have more than one owner but to limit the liability to your personal finances if something happens to the business. S Corporations will allow you the most flexibility as far as whether to hire employees or not, tax deductions that will be applicable and limiting liability. When registering your business, even if it is a home-based business or online business, you will be required to choose a structure. The structure tells the state and federal government how to tax you.
Choose Your Nebraska Business’s Name
Before ordering signs and business cards, you will first need to be sure that the name you would like to use is available. It is easy to check the name’s availability in Nebraska by going to the Secretary of State’s online platform and completing a simple search. If it is available, you should go ahead and reserve that name. It costs an additional fee, but this makes sure that when you get around to filing the business registration papers, your name is still available. It will only reserve it for 120 days.
Obtain a Federal Employer Identification Number in Nebraska
Most businesses will need to get a Federal Employer Identification Number (FEIN). This is an ID number separate from your Social Security Number. You will also need this number in order to register with the Nebraska Department of Revenue if you intend to sell items, hire employees or charge sales tax.
Register with the Nebraska Department of Revenue
If your business will be hiring employees, selling products, renting personal property or charging sales tax, then you will need to register with the NE Department of Revenue (DOR). You will be asked to provide your FEIN number. However, you may not have to register with the DOR if you do not have any employees, are a service provider and do not offer products. Once registered, you will be issued a Nebraska state identification number. This is for the state taxes. It will take approximately two weeks to process.
Taxes and Legal Paperwork for New Nebraska Businesses
If your business is a sole proprietorship, then the paperwork is light. You will only have to register the business and check to see if there are any local licensing or zoning requirements. However, almost all other business structures will need to pay attention to the registration that is required. Based on the type of business you own, you may also be required to obtain extra licenses and permits. A complete list of those businesses requiring additional permitting and licenses is kept on file via the NE Secretary of State Business Licensing division.
If you plan to hire employees, then you will need to set up payroll deduction/withholding, and obtain the necessary W4 forms. You are also required to have new hires fill out an I-9 which verifies the employee’s eligibility to work in the U.S. Most businesses are also required to obtain unemployment insurance if they have employees. This can be done through the UIconnect platform. Some business types are exempt from this, so make sure when on this platform to confirm your business type is required to file.
Zoning may also be an issue for you as you begin the startup process in Nebraska. Not all areas in a town or city are zoned for all types of commercial enterprises. This is true even for businesses operated solely online or from a home office. Each county in Nebraska has jurisdiction over its own zoning ordinances, and you can check your particular zoning codes with the county clerk’s office. Many counties also require additional licensing or permits to operate a business within the area.