Starting a Professional Corporation in Nebraska 2024: Ultimate Guide

by
How to Start a Professional Corporation in Nebraska

Licensed professional? Level up your business with Nebraska professional corporation! Enjoy unique benefits like Nebraska LLC, such as limited liability, tax perks, and a polished image. Our step-by-step guide unravels the essentials for smooth compliance and the right fit. LLCBase has your back with expert guidance, so make an informed decision and triumph in Nebraska with your professional corporation today!

This guide will review the requirements for starting a professional corporation in Nebraska, explore the advantages and disadvantages of this business structure, and help you determine if it is the right fit for your business goals.

Start a Professional Corporation

What is a Professional Corporation

A Professional Corporation (P.C.) is a unique type of corporation designed for licensed professionals, such as doctors, dentists, lawyers, architects, and accountants. Forming a P.C. allows licensed professionals to offer their services through a corporate structure, providing them with the benefits of a traditional corporation, such as limited liability protection and tax advantages. Forming a professional corporation in Nebraska is a popular choice due to the thriving professional landscape and business-friendly environment. When starting a professional corporation, choose a reliable formation service in Nebraska.

The primary purpose of Nebraska Professional Corporation is to protect its owners from personal liability for the corporation’s actions. The shareholders’ personal assets are protected if the professional corporation faces legal issues. Moreover, Nebraska professional corporations can offer certain tax benefits, such as deducting employee benefits and operating expenses. These advantages make forming a professional corporation an attractive option for many professionals in Nebraska.

Recommended: Hire a formation service to make your dream a reality! Choose the best for a seamless professional corporation setup in Nebraska. We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

Who Can File Under Professional Corporation Laws

Under Nebraska Professional Corporation laws, only certain licensed professionals are eligible to form a professional corporation. The specific professions allowed to form a P.C. may vary slightly by state, but in Nebraska, the following professionals can typically form a professional corporation:

  • Physicians and Surgeons
  • Dentists
  • Chiropractors
  • Optometrists
  • Podiatrists
  • Certified Public Accountants
  • Architects
  • Engineers and Land Surveyors
  • Psychologists
  • Marriage and Family Therapists
  • Clinical Social Workers
  • Professional Clinical Counselors
  • Veterinarians
  • Attorneys
  • Speech-Language Pathologists
  • Pharmacists
  • Registered Nurses
  • Physical Therapists
  • Occupational Therapists
  • Acupuncturists

Each profession has its governing licensing board, which sets specific rules and regulations for forming and operating a professional corporation. It is essential to check with the relevant board and state laws to ensure that your profession is eligible to form a professional corporation and to understand the specific requirements associated with your profession.

Launching a professional corporation in Nebraska? Get in touch with the best LLC formation services in Nebraska for expert guidance and support tailored to your unique venture. Let their skilled assistance pave the way for seamlessly setting up your professional corporation, so you can focus on growing your business!

LLC Services

Rating & Pricing

Top Features

Learn More

#1 Editor's Choice
Legalzoom

$0 + State Filing Fee

  • Free LLC Formation

  • Various Legal Services

  • Attorney Advice

Learn More

$299 + State Filing Fee

  • Single Package

  • Flat Pricing

  • Legal Services

Learn More

Structure of a Professional Corporation

  • Shareholders: Nebraska Professional Corporation’s shareholders must be licensed professionals in the same field as the corporation’s purpose. For example, if a professional corporation is formed to offer legal services, all shareholders must be licensed attorneys. This requirement ensures that the professional corporation’s management comprises qualified individuals with relevant expertise.
  • Directors: The directors of a professional corporation in Nebraska are responsible for overseeing the corporation’s operations and making high-level decisions. The directors must also be licensed professionals in the same field as the corporation’s purpose. The number of directors required depends on the specific licensing board’s regulations, but typically a minimum of one director is needed.
  • Officers: The officers of Nebraska Professional Corporation manage the professional corporation. Officers typically include a President, Secretary, and Treasurer. However, additional officers can be appointed as needed. While not all officers must be licensed professionals, the President must hold a valid license in the same field as the corporation’s purpose.

Starting a Professional Corporation in Nebraska: A Guide

Here is a detailed guide to starting a professional corporation in Nebraska that you should follow.

Step 1: Appointment of Registered Agent

The first step in forming a Professional Corporation is appointing Registered Agent in Nebraska. This individual or company will act on behalf of the corporation, receiving official notices and legal documents. The agent must have a physical address in Nebraska and be available during regular business hours.

We compiled the list of the best registered agent services in Nebraska to help you choose the one you can rely on.

Step 2: Choosing the Name of the Corporation

Selecting a name for your Nebraska Professional Corporation is crucial. The name must be unique and appropriate, including the words “professional corporation” or the abbreviation “P.C.” It must also comply with the rules and regulations of the governing licensing board and should not be confusingly similar to an existing corporation’s name.

Recommended: Lock down your ultimate business name confidently with the name reservation by a reliable business formation service. Effortlessly scope out name options with just a few clicks! We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

Step 3: Drafting of By-laws

By-laws are the internal rules and regulations governing the management and operations of the professional corporation. These should include provisions related to the appointment of directors, issuance of shares, and any restrictions imposed by the licensing board.

Step 4: Appointment of Board of Directors

The board of directors oversees the management and operations of the Nebraska Professional Corporation. Directors must be licensed professionals in the same field as the corporation’s purpose.

Step 5: Conduction of Board Meetings

Regular board meetings are essential for maintaining the proper functioning and compliance of the professional corporation. The by-laws should specify the frequency, notice requirements, and procedures for conducting these meetings.

Step 6: Issuance of Corporate Shares

Shares represent ownership in the corporation. The professional corporation must issue shares to its shareholders, who must be licensed professionals in the same field. Share issuance should comply with the by-laws and any restrictions imposed by the licensing board.

Step 7: Comply with State Requirements

Forming Nebraska Professional Corporation requires compliance with specific state requirements, such as obtaining necessary permits and licenses, paying fees, and adhering to rules and regulations the governing licensing board sets forth.

Need trustworthy guidance on business licenses, permits, and compliance? Look no further than the best business attorneys in Nebraska who are adept at navigating your specific industry’s legal ins and outs. With their friendly support, you can confidently and seamlessly manage your business requirements!

Step 8: Filing of Statement of Information

Nebraska professional corporations must file an annual report with the Nebraska Secretary of State. This document includes essential information about the corporation, including its name, address, Registered Agent, and directors.

Step 9: Getting Tax Permits from the State

The professional corporation must obtain the necessary tax permits from the Nebraska Department of Revenue, such as an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

Step 10: Opening of a Bank Account

Finally, open a separate bank account for the Nebraska Professional Corporation to maintain proper accounting and financial records.

Fees Associated with Professional Corporation in Nebraska

Here are some of the most common fees when starting a professional corporation in Nebraska.

  • State Laws and Regulations: To form a professional corporation in Nebraska, it is crucial to comply with the state laws and regulations governing professional corporations. The Nebraska Revised Statutes Chapter 21 and the specific licensing board’s regulations for each profession outline the requirements and restrictions for professional corporation formation. Before starting the process, professionals should consult with their licensing board to ensure they meet the necessary qualifications.
  • Incorporation Process: Once the licensing requirements are met, the next step to form a professional corporation in Nebraska is to draft and file the Articles of Incorporation with the Nebraska Secretary of State. This document includes essential information about the corporation, such as its name, address, purpose, and number of authorized shares. Filing the Articles of Incorporation requires a filing fee currently $100 for most professions. However, it is essential to check with the Nebraska Secretary of State for the specific fee associated with your profession.
  • Naming Requirements: You must follow specific rules when choosing a name for a Professional Corporation in Nebraska. The name must include the words “Professional Corporation,” “P.C.,” or “Prof. Corp.” Additionally, the name cannot be misleading or too similar to an existing corporation’s name. Conducting a name search with the Nebraska Secretary of State is recommended to ensure the chosen name is available. This search is free, but reserving a name before filing the Articles of Incorporation requires a reservation fee of $15 online and $15 mail.
  • Articles of Incorporation: The Articles of Incorporation is a critical document for forming a professional corporation in Nebraska. It outlines the corporation’s essential information, such as the name, address, purpose, and number of authorized shares. The Articles must also include a statement that the corporation is a professional corporation and the specific profession it practices. Once completed, the Articles of Incorporation must be filed with the Nebraska Secretary of State, accompanied by the appropriate filing fee.
  • Additional Fees and Costs: In addition to the filing fees mentioned above, forming Professional Corporation in Nebraska may involve other costs, such as:
    • Annual Report: professional corporations must file an initial Statement of Information with the Nebraska Secretary of State every April 1st of filing the Articles of Incorporation. The filing fee for this form is $5.
    • Licensing and Permit Fees: Depending on the specific profession, the governing licensing board may require additional licensing and permit fees.
    • Registered Agent Fee: Hiring of Registered Agent service will likely involve an annual fee of $50 – $150, which can vary depending on the service provider.
    • Legal and Accounting Fees: Forming a professional corporation may involve consulting with attorneys and accountants, which can result in additional professional fees.

Advantages of a Professional Corporation

  • Limited Liability Protection: One of the main benefits of a professional corporation is its limited liability protection to its shareholders. This means the shareholders’ assets are protected from the corporation’s debts and liabilities.
  • Tax Benefits: Professional Corporations enjoy specific tax benefits, such as deductions for business expenses and the ability to retain earnings within the corporation.
  • Business Credibility: Operating as a professional corporation can enhance the credibility and reputation of the professional services, demonstrating a commitment to compliance and professionalism.
  • Continuity of Operations: A professional corporation has a perpetual existence, ensuring the continuity of operations even if the shareholders or directors change.

Disadvantages of a Professional Corporation

  • Complexity and Cost of Formation: Forming a professional corporation can be more complex and costly than other business structures, such as sole proprietorships or partnerships.
  • Ongoing Compliance Requirements: professional corporations must adhere to ongoing compliance requirements, including regular board meetings, filing annual reports, and maintaining proper records.
  • Limited Flexibility in Management: professional corporations may need more flexibility in management, as the board of directors must consist of licensed professionals in the same field.

Taxation of Professional Corporations

Here are the taxes that your professional corporation must pay in Nebraska:

Federal income tax

A professional corporation in Nebraska is subject to federal income tax on its net earnings. However, a P.C. can elect to be taxed as an S corporation, which allows the corporation’s income, deductions, and credits to pass through to the shareholders. This can result in significant tax savings by avoiding double taxation.

State taxes

Nebraska Professional Corporation is also subject to state taxes, such as the Nebraska franchise tax, which is based on the corporation’s annual net income. Additionally, depending on the nature of its operations, the professional corporation may be subject to other state and local taxes, such as payroll and sales taxes permit in Nebraska.

Tax deductions and exemptions

A professional corporation in Nebraska can take advantage of various tax deductions and exemptions, such as deductions for employee benefits, operating expenses, and depreciation. These deductions can help reduce the corporation’s taxable income, ultimately leading to tax savings for the P.C. and its shareholders.

Alternatives to Professional Corporations in Nebraska

If you decide that a professional corporation is not for you, then you might consider the following alternatives.

  • Sole Proprietorships: A simpler business structure is where an individual operates the business under their name without limited liability protection.
  • Partnerships: Two or more individuals join to operate a business, sharing profits, losses, and responsibilities.
  • Limited Liability Companies (LLCs): A hybrid business structure that combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership.
  • S-corporations: Starting an S Corp in Nebraska avoids double taxation by allowing income, losses, and deductions to pass through to the shareholders’ personal tax returns.

FAQs

What is a Professional Corporation?
A Professional Corporation (PC) is a type of business structure that specifically provides services in a licensed professional capacity, such as medical, legal, or accounting.
Can anyone form a Professional Corporation in Nebraska?
No, only licensed professionals in Nebraska can form a Professional Corporation.
What professions are eligible to form a Professional Corporation in Nebraska?
Licensed professionals such as lawyers, doctors, architects, accountants, and engineers can form a Professional Corporation in Nebraska.
What are the benefits of forming a Professional Corporation in Nebraska?
Some benefits are limited liability protection, tax advantages, and flexibility in business structure.
Does creating a PC require drafting special articles of incorporation in Nebraska?
Yes, drafting special articles of incorporation and filing them with the Nebraska Secretary of State is required for forming a PC.
How much does it cost to incorporate a Professional Corporation in Nebraska?
The filing fee in Nebraska for a professional corporation is $200.
Are Professional Corporations required to pay state taxes?
Professional Corporations in Nebraska are required to pay state corporate taxes.
Are PCs liable for franchise tax in Nebraska?
Yes, Professional Corporations in Nebraska are required to pay annual franchise taxes.
How long does it take to create a Professional Corporation in Nebraska?
The process of forming a Professional Corporation in Nebraska can take two weeks to a month to complete.
Is it necessary for Professional Corporations in Nebraska to carry insurance policies?
It is not required by law, but having insurance is a good practice for minimizing liability risk.
Do PCs have to register with the Nebraska Department of Insurance to operate?
No, Nebraska professional corporation laws do not require PC’s to register with the Department of Insurance.
Can foreign PCs operate in Nebraska?
Yes, foreign Professional Corporations are authorized to conduct business in Nebraska but need to be authorized to do so by filing with the Nebraska Secretary of State.
Can a Professional Corporation convert into an LLC in Nebraska?
Yes, Professional Corporations in Nebraska can be converted into LLCs.
Are Board of Directors mandatory for Professional Corporations in Nebraska?
No, Professional Corporations in Nebraska do not require a method of supervision base on the board of directors.
Can a shareholder in a Nebraska Professional Corporation be held liable for the corporation’s actions?
Generally speaking, no, the shareholders’ limited liability status protect them. However, in certain cases, courts might decide that a shareholder must assume personal liability if corporation liability isn’t sufficient to fullfil.
Is it possible to run a sole proprietorship and a Professional Corporation simultaneously in Nebraska?
No, according to Nebraska law, you cannot run a sole proprietorship and be a member of a Nebraska Professional Corporation at the same time.
Can a minority share own the majority of shares in a Professional Corporation in Nebraska?
Yes, a Nebraska PC allows minority shareholders to own the majority of shares granted that the business licenses are in order and agreed-upon on corporate arrangements through shares agreement.
Is there a requirement for age limit of PC shareholders in Nebraska?
There are no age minimum age requirements to become the shareholder of a Professional Corporation in Nebraska
Is it okay to elect an out-of-state registered agent for a Nebraska Professional Corporation?
Yes if you use a registered agent service. Nebraska law requires all domestic and Nebraska-registered foreign corporations to have a registered agent in NE.
Can a Professional Corporation owned by foreigners operate in Nebraska?
Yes, foreigners or non-US citizens are authorized to own Professional Corporations in Nebraska.
Does Nebraska resolve Professional Corporation disputes?
Nebsraska provides professional mandate supervision over the specific professions and professions only but not into invoiced disputes.
Is a Professional Corporation a good choice for avoidance of malpractice cases?
A PC cannot get compensated, but Individual team members avoid personal clains and each other been liable for malpractice evidence.
How frequently do Nebraska Professional Corporations need to have regular meetings?
Only if required thru organization by-lawns.
Can a professional’s spouse participate a Nebraska PC if they’re unlicensed?
Nebraska laws prohibit spouses help participation while the the professional who consent doing the duties currently in advantage position.
Does Nebraska give allowance for telecommuting in a professional corporation setup, especially during pandemic?
Yes, until the conclusion of Governor Rickett’s ‘Force Four’ order implementing certain statutory Requirements, all initially nondomesticPC’s, would knowingly interact with government, during the public necessity facilities.
Can licensed professionals run a general partnership in Nebraska?
No, according to Nebraska law, licensed professionals can’t operate a general partnership since they lack liability limitations.
Is there any difference in requirements for an accounting versus a legal Professional Corporation in Nebraska?
There are regulations and standards related to accounting and legal professions that related requirements for Nebraska PC setup.
Can three different professions unite their hands and establish a Multi-professional Professional Corporation in Nebraska?
Generally speaking, Neberaska does offers the ability for several professions to unitedly operate when granted specific licenses as LLC or COR.
Is there any exception where a Professional Corporation isn’t incumbent to get additional specialties of the same area?
There is no law in place right now for recommending successive meeting for license-required Speciality-based on new ongoing ones.
Does Nebraska Business Act regulate how profits are split among PC memberos?
Nebraska Business Corporation laws do not stipulate requirements over profit shares.
As a PC, Are you required to hold an initial public offer?
No, As a professional corporation (based in Nebraska or another state), you’re not under an obligation to hold an initial public offering (IPO) such as a normal C-corportation based on state criteria.
Is my PC regarded as a sole proprietorship in my taxations in Nebraska?
No, a Nebraska Professional Corporation (PC) is not considered a sole proprietorship for income-tax purposes, nor is it handled on your personal income points.

Also Read

How to Save Money While Forming Nebraska Professional Corporation

First and foremost, it’s crucial to plan ahead and do thorough research before diving into the process of forming a professional corporation. By carefully researching the requirements and regulations in Nebraska, you can avoid costly mistakes and unnecessary expenses down the road. Make sure to familiarize yourself with the specific requirements for professional corporations in your industry, as they can vary widely depending on the nature of your business.

Additionally, consider seeking out free or low-cost resources to help guide you through the process of forming your professional corporation. Many states offer online resources and guides that can walk you through the necessary steps, saving you time and money on expensive legal fees. Furthermore, reaching out to local small business organizations or networking groups can provide valuable insights and advice that can help streamline the process and minimize expenses.

When it comes to hiring professionals to assist with the formation of your professional corporation, be sure to shop around and compare prices before making a decision. While it may be tempting to hire the first attorney or accountant you come across, taking the time to gather multiple quotes can help you find a provider that fits within your budget. Consider negotiating fees or asking for a discount, particularly if you are a first-time entrepreneur or are forming a small-scale professional corporation.

Taking advantage of online tools and resources can also help save money when forming your professional corporation. Many websites offer DIY options for creating legal documents, such as articles of incorporation, that can save you significantly on legal fees. Additionally, consider utilizing cloud-based software for record keeping and bookkeeping, which can be more cost-effective than traditional methods and offer greater convenience and accessibility.

Finally, consider forming a professional corporation with like-minded individuals or colleagues to pool resources and share the costs. By partnering with others in your industry, you can distribute the financial burden of forming a corporation while leveraging each other’s skills and experience. Additionally, forming a corporation as a group can bring added benefits in terms of expertise and networking opportunities that can help propel your business to success.

In conclusion, saving money while forming a Nebraska professional corporation is possible with careful planning, thorough research, and strategic decision-making. By utilizing free resources, shopping around for professional services, and exploring collaborative options, aspiring business owners can minimize expenses and set themselves up for success. Remember, every dollar saved during the formation process is a dollar that can be reinvested back into your business for continued growth and prosperity.

Conclusion

Nebraska Professional Corporation can offer several benefits for licensed professionals. However, it is essential to carefully consider the proper structure and compliance requirements before proceeding. Seeking professional guidance in forming a professional corporation can help ensure a smooth process and enable professionals to focus on providing their services. Visit LLCBase for more information about starting a professional corporation in Nebraska.

Leave a Comment