Benefits of a Corporation
Forming a corporation can help protect your personal assets if your business is sued or falls behind on its financial obligations. In addition, a corporation can help you avoid personal liability if someone files a lawsuit against one of your business partners or employees. There may also be tax savings and other benefits should you choose to incorporate.
Requirements for Incorporating in Nebraska
Preparing Your Articles of Incorporation
A Nebraska corporation is formed and begins its existence when you file articles of incorporation with and pay a fee to the Secretary of State. The following is the minimum information that must be included in the articles of incorporation:
- Name of the corporation
- Names and addresses of incorporators
- Registered agent and registered office
- Stock structure
- If the corporation is registered or intends to register as an investment company, the articles must list any provision eliminating or limiting the annual shareholders’ meeting requirement.
A corporation can offer different types of stock, called classes or series. These classes can offer different rights to their shareholders, for example some classes of stock may offer voting rights while others do not.
Regarding stock structure, the follow applies:
- If there is only one class of stock, the articles of incorporation must list the total number of shares authorized and the par value of each share. Par value is the minimum price that must be paid for a share.
- If there is more than one class of stock, the articles must list the number of shares authorized in each class, the par value of the shares in each class and a designation for each class. Before shares are issued in a class, the articles must state the rights, limitations and preferences for those shares.
Naming Your Corporation
Before submitting your incorporation papers, it is advisable to make sure the corporate name you have chosen is available for use in Nebraska. Formal name availability requests must be submitted by mail or fax to the Secretary of State, although you can perform a preliminary search of business names online. Another option is to use an online entity name check service.
A corporate name can be reserved for 120 days by filing an application with the Secretary of State.
Your corporation name must adhere to the following requirements:
- It must contain the words “corporation,” “incorporated,” “company” or “limited,” or the abbreviations “corp.,” “inc.,” “co.” or “ltd.”
- It cannot be the same as or deceptively similar to any business entity name on file with the Secretary of State, unless the business entity using the name consents in writing.
An incorporator is responsible for filing the articles of incorporation with the Secretary of State. The following requirements apply when specifying incorporators:
- Your corporation must have at least one incorporator.
- An incorporator may be a person or an entity.
- Incorporators’ names and addresses must be listed in the articles of incorporation.
- If the initial directors are not listed in the articles of incorporation, the incorporators must elect directors. They may also approve bylaws and appoint officers. Once the directors have been chosen, the incorporators have no further duties.
Directors oversee the corporation’s activities and set broad goals and objectives for the corporation. Directors have a fiduciary duty, which means they must exercise good business judgment and act in the best interests of the corporation.
The following guidelines apply when specifying directors for your company:
- There may be one or more directors.
- Each corporation sets its own limit on the number of directors it will have. The number of directors should be stated in the articles of incorporation or bylaws.
- The articles of incorporation or bylaws may also establish eligibility criteria for directors.
Specifying a Registered Agent and Registered Office
A registered agent receives legal documents and notices on behalf of the corporation and forwards them to the corporation. The registered office is the agent’s business address.
The following requirements apply when specifying a registered agent and registered office:
- The articles of incorporation must list the registered agent’s name and the registered office street address, which must be in Nebraska.
- A registered agent can be an individual who is a resident of Nebraska or a corporation that is incorporated in or authorized to do business in Nebraska.
- The registered office address must be identical to the registered agent’s business office.
Stating a Corporate Purpose
All corporations formed in Nebraska have a purpose of engaging in any lawful business. You do not need to provide any additional purpose in the articles of incorporation.
Determining Incorporation Bylaws
Bylaws are an internal document that describes the way a corporation will operate. They may include provisions for regulating and managing the affairs of the corporation, including provisions for electing directors and conducting shareholders’ meetings. Bylaws are part of a corporation’s records and are not filed with the Secretary of State.
The following requirements apply when determining your company’s bylaws:
- Bylaws are required and may initially be adopted by the incorporators or directors.
- Bylaws cannot contain anything that violates the law or is inconsistent with the articles of incorporation.
Costs of Incorporating in Nebraska
The Nebraska Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.
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