If you’re interested in forming a Nebraska nonprofit corporation, there are several steps you’re required to take. Below, we discuss everything you need to know about how to start your Nebraska nonprofit corporation, from formation to applying for tax-exempt status.
How to Form a Nebraska Nonprofit Corporation
Select your initial directors
The first step of incorporating is to select your initial directors. In Nebraska, a board must consist of three or more individuals. These initial directors will serve on the board until your nonprofit corporation holds its first annual meeting. At that point, your corporation’s members must elect directors.
Choose a name
While selecting the name for your nonprofit corporation is a relatively simple task, there are some limitations you need to be mindful of. In Nebraska, your name must:
- Not contain language that’s misleading
- Be unique and not be similar to any other registered corporation in the state unless authorized by the secretary of state
You can make sure that the name you want to use isn’t already registered by searching the Nebraska Corporate and Business Database online. If the name you want is available you can reserve it with the state for 120 days.
Or, if the idea of paperwork doesn’t appeal to you, use our name reservation service to ensure that no other entity uses your name before your incorporation is complete.
It’s also important to make sure that there are available domain names for your nonprofit corporation’s website. You can use ZenBusiness’s domain registration service to secure your nonprofit’s domain.
Choose a Nebraska registered agent
A registered agent is an individual that you appoint to accept official correspondence and legal documents from the state on your nonprofit’s behalf.
In Nebraska, your registered agent must:
- Be an individual or a corporation that’s authorized to conduct business in the state
- Maintain an office and mailing address in the state
- Be available to accept correspondence during regular business hours
Acting as your own registered agent might sound like the easiest solution. However, being tied to the office during working hours can be annoying. A registered agent also receives legal notices on your behalf, preventing any uncomfortable situations from occurring in front of clients. By working with a registered agent service, you can have an experienced agent handle your paperwork. Consider using ZenBusiness’s registered agent service partners to make sure your legal documents are managed efficiently and forwarded to you in a timely manner.
File Articles of Incorporation with Nebraska
Unlike in most states, Nebraska doesn’t provide an official form for new nonprofit corporations to file their Articles of Incorporation. Therefore, you’re responsible for creating this document and submitting it to the Nebraska Secretary of State.
When you create this document, Nebraska’s Nonprofit Corporation Act requires you to include the following details:
- The name of your nonprofit corporation
- Whether your corporation is a mutual benefit corporation
- The street address of your initial registered office and the name of your registered agent
- The name and address of each of your initial directors
- Whether your nonprofit corporation will have members
- How assets will be distributed should your corporation dissolve (this provision must comply with the state’s nonprofit laws)
Additionally, as a nonprofit corporation, you must include the following statements within your Articles of Incorporation:
- A statement of purpose that meets the IRS’s requirements for tax exemption for nonprofits
- Confirmation that your nonprofit won’t engage in any prohibited political activities
Meet publication requirements according to Nebraska statutes
Nebraska statute 21-19,173 requires you to publish a public notice of incorporation in a local, legal newspaper. This newspaper must circulate in the county where your registered office is located. This notice must include:
- The name of your corporation
- Whether it’s a public benefit, mutual benefit, or religious corporation
- The street address and name of your registered agent
- The names and addresses of your directors
- Whether your nonprofit corporation will have members
You must publish this notice for three consecutive weeks.
Create corporate bylaws
Your corporate bylaws should be created by the board of directors. These bylaws become the official code by which you manage your nonprofit corporation. They should include:
- Procedures for meetings among members and the board of directors
- Details regarding the handling of major decisions
- How funds are distributed to your cause
- Procedures for electing or terminating directors
Hold an organizational meeting for your board of directors
After your Articles of Incorporation are approved, you need to hold your first organizational meeting. This is when you make decisions about banking, term limits, electing directors, and record keeping. This is also a good time to finalize your bylaws and procedures.
Create a system for keeping corporate records
Whether you choose to do it manually or electronically, it’s vital that you keep detailed records of your nonprofit corporation. According to Nebraska law, all corporations must keep permanent records of meeting minutes, accounting, and shareholder information.
Obtain tax ID numbers
You’ll need to apply for your Federal Employment Identification Number (EIN). You can get this for free through the IRS or avoid paperwork and use the ZenBusiness EIN Service.
If your nonprofit will have employees you’ll need a Nebraska State Tax Identification number. Fill out the Nebraska Tax Application form and submit it via fax, online, or mail to apply for one.
Apply for all necessary Nebraska licenses and permits
Depending on the nature of your nonprofit, you might need to apply for special permits and licenses to operate. For example, if you host charity casino nights, you’ll need a license from the Nebraska Department of Revenue’s Charitable Gaming Commission.
As such, it’s important to take time to research what licensing you might require before you conduct business. To determine what licenses you require, take advantage of ZenBusiness’s business license report service.
Apply for tax exemptions
To gain tax-exempt status, you need to apply for 501(c)(3) status. Fill out form 1023, there’s a long-form version and a short one. Fill out the one that best meets your needs. The IRS requires certain language in some cases, so check out the Suggested Language for Corporations and Associations page on the IRS website to make sure you include everything to make your application process as smooth as possible.
As a nonprofit corporation, you’ll also need to obtain tax exemptions from the Nebraska Department of Revenue.
To find out about tax exemptions on the state level read the Nebraska Taxation of Nonprofit Organizations (for Sales and Use, Income, and Withholding Taxes) on the Nebraska Department of Revenue site.
All nonprofit corporations should conduct thorough research into the insurance requirements of their corporation. You’ll need workers’ compensation insurance if you have one or more employees as well as unemployment insurance. However, you may also consider:
- Commercial liability insurance
- Vehicle insurance
- Property insurance
- Director’s and officer’s insurance
Be sure to speak to a qualified insurance agent to determine your insurance needs.
Open a bank account for your Nebraska nonprofit corporation
To collect donations and disburse funds, you’ll require a bank account for your nonprofit corporation. This keeps your personal funds and your nonprofit’s funds separate.
Ready to Kick Start Your Business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or looking to register a domain, our goal is to help you stay on the road to success. Check out our services, and contact us today to see how we can help you grow your company.
Nebraska Nonprofit FAQ
Can the founder of a Nebraska nonprofit receive a salary?
If the founder acts as a director or officer of the nonprofit and provides a service then they may obtain reimbursement for their services as long as it’s reasonable. In this case, they’ll be considered an employee of your nonprofit corporation.
What happens if a nonprofit makes money in Nebraska?
If a nonprofit earns a profit, this income can be used to cover the cost of the corporation’s activities. However, they must be earned from activities related to your corporation’s cause. If money is earned from unrelated activities, it must be reported to the IRS, and income tax must be paid on those earnings.
What kinds of Nebraska businesses can be a nonprofit?
A corporation that helps others through, religious, charitable, educational, scientific, or literary means. There are many specific guidelines you can find here to see if your nonprofit qualifies.
Can Nebraska nonprofits sell products?
Nonprofits can sell products to raise funds for their intended causes.