For businesses seeking recognition as separate legal entities, Nebraska law allows them to undergo the process of incorporation. As a separate entity from the owners, the business is then considered to be acting on its own when it buys and sells property, assents to contracts and exercises legal rights. The office of the Secretary of State is the agency that receives applications for incorporation in Nebraska, and they must be completed in conformity with specific guidelines.

Benefits of Incorporation in Nebraska

Advantages of incorporation are many. The primary benefit is that the liabilities of the business can only be satisfied by the assets specifically invested into the company by the owners. Had the business instead remained a collection of the owners' personal assets, the personal property of the stakeholders could be liquidated to pay the liabilities of the business, if it runs into financial problems. A corporation may also find it easier to finance itself through loans, allowing creditors in the Douglas County area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Lastly, a corporation's ownership stake is divided into equal slices or "shares" of stock, which make investments in the business much easier to transfer.

Costs of Incorporation

These advantages come at a price. First, incorporation in Nebraska may require a filing fee. Second, a corporation pays taxes just like any other entity. Disbursements to the owners of the corporation are also taxed as individual income, so this means earnings may be taxed twice. But this double taxation can be avoided with proper planning and help from a local Douglas County lawyer.