Do you own a limited liability company (LLC) created in a state other than Nebraska, but you want to expand your business to the Cornhusker State? If so, you’ll need to qualify your foreign LLC in order to transact business in Nebraska.
What is a foreign qualification and how do foreign LLCs function within the state of Nebraska? In this guide, we’ll answer these questions and more.
Rocket Tip: If you’d rather hire an online service to handle this process for you, many of the best LLC services can handle it for you.
What Is a Foreign Qualification?
A foreign qualification enables your limited liability company to do business in the state of Nebraska. It doesn’t matter which state you originally formed your business in ― or in other words, the state your domestic LLC is located in ― as the qualification process to register a foreign LLC in Nebraska is the same regardless of where your domestic LLC is based.
The confusion surrounding foreign qualification usually centers on what it means to “do business” in a state outside of your primary state. This gets especially problematic considering some states don’t strictly define what it means to transact business in that state. Nebraska state law does not define “doing business” in the state.
What Qualifies as ‘Doing Business’ in Nebraska
Though all foreign entities are evaluated on a case-by-case basis to determine if their activities qualify as “doing business,” there are certain activities that generally qualify in Nebraska. You’ll usually need to form a foreign LLC in Nebraska if your business pursues any of the following activities in this state:
What Does NOT Qualify as ‘Doing Business’ in Nebraska
Meanwhile, the state of Nebraska has adopted the Revised Model Act (with one additional provision), which outlines activities that do not qualify as “doing business.” According to Nebraska state law, following activities do not require foreign qualification in the state:
Acting as a foreign corporate trustee to the extent authorized under section 30-3820.”
How to Get Foreign Qualification in Nebraska
If you want to foreign qualify your LLC in Nebraska, you’ll need to file an Application for Certificate of Authority for Foreign Limited Liability Company. This one-page form will require the following information before being submitted to the Secretary of State:
If you wish to file for the Certificate of Authority online, you can do so here.
Filing Fee: $100 (+$10 for certificate), with the check made payable to the “Nebraska Secretary of State.”
What Is the Penalty for Not Getting Foreign Qualification in Nebraska?
There is one major penalty for failing to qualify a foreign LLC in Nebraska. If you transact business as a foreign entity without acquiring a Certificate of Authority, you will be unable to bring forward a lawsuit against a third party in a Nebraska court. This means that individuals and businesses could fail to honor contracts with your business, and you wouldn’t be able to do much about it legally.
Should I Hire a Business Service Provider to File My Nebraska Foreign Qualification?
If you don’t want to handle your foreign qualification on your own, you have options. Some entrepreneurs choose to hire a lawyer to prepare and file their Certificate of Authority, which can be a good option if you’re concerned about getting the job done right. However, attorney’s fees can be quite expensive.
The other option is to hire a business service provider like Incfile or ZenBusiness to register your foreign LLC with the state of Nebraska.
These companies can typically get your foreign qualification done for a fraction of the price of an attorney. This is our preferred route if you don’t want to go with the DIY option.
The process for getting a foreign qualification in the state of Nebraska isn’t particularly complicated compared to some other states. The entire process can be done online, and only requires one form and payment. In addition, Nebraska’s rules and regulations regarding which LLCs need to foreign qualify are considerably looser than many states. Still, this isn’t a process that should be overlooked, because the penalties for not qualifying a foreign LLC in Nebraska can be severe ― especially if someone you do business with doesn’t live up to their end of a contract and you’re unable to sue them.
We hope this article managed to answer your questions about obtaining a Nebraska foreign qualification, and we wish you a prosperous business future!