Many self-employed Nebraska residents are eager to start their businesses. The simplest and most rational solution to this issue is to join the ranks of sole proprietors.
Organizing and managing a business in this format is the least difficult in America and has no service pitfalls. Although, future business owners will have to adhere to certain norms. Also, be prepared that you will have to face some restrictions regarding the functions of your sole proprietorship.
So, the main task of this manual is to help you answer the essential question – is the business format of an individual enterprise right for you? And, of course, we will tell you which aspects to pay attention to while opening a sole proprietorship and how to set up a business structure in this vein properly.
The Proper Way To Start Business As The Nebraska Sole Proprietor
There is no algorithm for organizing the business work of an individual entrepreneur in Nebraska as for LLC. In addition, the state does not charge additional service fees for the formation or management of this type of business or company. Are you looking to become an individual business owner and start a sole proprietorship in Nebraska? – Just start working!
Though, you still have to go through several additional legal formalities. These service stages are optional. Although many sole proprietors prefer not to neglect them, compliance with these formalities guarantees the legal protection of their interests.
Applying For DBAs
Almost every company and business owner prefers doing business as a DBA. There are many benefits to running a business under an assumed name compared with an entity or LLC. We are talking primarily about creating the business image of your company. Potential clients and consumers will find this approach more professional and give you more confidence. It turns out that a company that uses the real name of its owner is often not competitive.
Let’s clarify that a company owned by sole proprietors can use the DBA to open and manage a business bank account. Customers will appreciate it as one more advantage in favor of the business owner, so they feel more comfortable.
For more information on the rules for applying a trading name, you can use our full instructions.
Clarification & Compliance with Tax Requirements
You can run your business in this format and not hire third-party employees. In this case, you do not need to obtain an EIN (Federal Tax Identification Number) because your Social Security number will replace it. Of course, it would be correct to take care of your confidentiality and still use the EIN and not the SSN.
The nature and the structure of the business activity of individual entrepreneurship determine the list of tax requirements that the state will put forward (as with LLC).
Nebraska is different in that depending on the type of business you do, you will have specific types of tax deductions that you will be required to pay at the end of the year.
The most common types of tax deductions are those related to the sale and use of goods and services, but there are also many other types of tax deductions. To familiarize yourself with the list of taxes that may apply to your line of business, you should go through the process of registering your sole proprietorship by contacting the Nebraska One-Stop Business Registration Center.
Business Licenses & Permits
The state of Nebraska does not require licensing to start a business in the area but based on your occupation, you may need to use other types of licenses and/or permits that allow you to conduct the type of business you are engaged in. These requirements will allow you to operate in compliance with all requirements imposed by state authorities.
Nebraska, like most states, has a wide range of licensing options.
Factors affecting your choice of which option is right for you include: the type of business you are in, the type of product or service you are selling, and local laws. To determine which licensing option is right for you, you may want to consider using a platform provided by the Nebraska Department of Labor called NebraskaAccess.
Other specific licensing and permits may be necessary elements based on local regulations, building permits, zoning, and other restrictions.
Among other things, inquire about whether your business requires other licensing or local permits.
Some cities do not require additional permits, while others require every business to obtain extra special certificates. To make sure your business meets all the conditions of the state where you intend to do your business, you should go to your local government a website and find out the regional licensing requirements that will apply to you.
Nebraska Sole Proprietor: The Notion & Essence
A sole proprietor is not a legal entity! But any corporation and limited liability company (LLC) has this status. As a sole proprietor, you run the business alone (register and manage it on your behalf). It is worth noting that this gives the business owner advantages, though, imposes additional obligations and responsibilities on him.
Make Sure to Pay Attention to the Following Three Aspects
There are obligations to pay taxes to the state
A business owner and an individual entrepreneur are the same people. It means that filing tax returns is not a requirement, as with an entity or LLC. You need to declare your income and expenses and fill out the declaration of an individual;
Business owners who are registered as sole proprietors have the right to enter into contracts on their behalf, unlike an entity. Also, receiving profit from clients, in checks they can indicate their name in the recipient column;
Flexible terms of business management
The advantage difference between individual entrepreneurship and any entity is the ability to combine work and personal assets. Whereas corporations and LLCs must separate personal assets from company assets. It has several positive and negative aspects. For example, if you have financial difficulties, creditors can seize or confiscate your personal property (house, car, etc.). In the case of corporations and LLCs (or any entity), creditors do not have this freedom, as their powers only apply to business assets.
Of course, the structure of doing legal business as a sole proprietor is greatly simplified while in Nebraska. You don’t even have to pay any commission fees provided for the entity or LLC. At the same time, based on the nature and structure of the business activity that you conduct, you will all have to go through a series of entity stages.
The issues of taxation, obtaining licenses, and permits require more detailed consideration. Also, pay attention to the possibility of obtaining and using DBA. These aspects are vital, as their omission can result in unnecessary legal penalties for you.
We have prepared this manual so that you can think over the structure of your business to the smallest detail. Manage it correctly and get more legal profit!