If you've started selling your homemade jewelry online or running personal training sessions out of your garage, you've likely formed a sole proprietorship already—and you're not alone. When an individual starts a business (sells goods or services) and they haven't filed any legal documents with their state officially registering the business, then they've automatically created a sole proprietorship.
A sole proprietorship is low maintenance. It doesn't typically require you to file any creation documents or submit renewal filings or fees, and you can usually report your income on your personal tax return. But sole proprietors are personally liable for the business's debts and obligations, so you might need to dip into your personal funds to satisfy any debts your business can't pay.
In Nebraska, you can establish a sole proprietorship without filing any legal documents with the Nebraska state government. Though no action is required to legally create a sole proprietorship, you should follow four simple steps to start your business:
For more information, read our article on how to start a business in Nebraska.
In Nebraska, a sole proprietor can use their own legal name or a trade name—also sometimes known as an "assumed business name" or "doing business as" (DBA)—to conduct business. If you plan to use an assumed name or trade name for your business, state law requires that the name be distinguishable from the name of any other company currently registered with the state. (Neb. Rev. Stat. § 87-209 (2023).)
It's also a good idea to choose a name that's not too similar to another registered business to avoid trademark infringement. Under trademark law, your trade name can't be used by someone else in a way that would cause confusion among consumers. So, if you use a name that's the same as or too similar to someone else's trademark and you both provide similar goods or services, then you could be infringing on their trademark. If you find a competitor company already exists with a similar name, then it's best to choose another name.
For example, suppose you want to operate a food stand under the name Husker Spicy Corn Dogs. Across town, another food stand does business under the name Husker Dogs. You probably wouldn't be able to use your name because it's too similar a name to the other food stand and it would confuse customers.
To make sure your business name is available, you should run a search in the following government databases:
For more information, read our FAQ on how to choose and register a business name.
If you use a business name that's different from your legal name, Nebraska requires you to register your trade name. For instance, suppose Wally West wants to sell engraved jewelry under the name Flash of Red. He would need to register his trade name, Flash of Red, because it's different from his legal name.
To register your trade name, complete an Application for Registration of Trade Name. You can either mail the completed form to the Secretary of State or file online. The filing fee is $100 for online filing and $110 for paper filing.
You'll also need to publish your trade name application with a local newspaper. The publisher will provide you with an affidavit of publication. You'll need to send a copy of the affidavit to the Secretary of State within 45 days of the date your trade name is registered. You need to renew your trade name registration every 10 years. (Neb. Rev. Stat. § 87-210 and following (2023).)
Depending on your business activities, you could need to apply for business or professional licenses. In Nebraska, sole proprietors aren't required to obtain a general business license but you might need to apply for other licenses and permits for your business.
Nebraska provides a comprehensive website on business licenses that includes information and resources on how to apply for and renew various licenses and permits, such as for liquor, health and human services, and agriculture. You can walk your business through the state licensing process online with Nebraska's one-stop portal. You can filter for category and agency to find the licenses, permits, and registrations that could apply to your business.
You might also need to comply with local regulations, building permits, and zoning laws. Check with your city and county governments for more information.
Sole proprietors who wish to have employees need to obtain an EIN. This is a nine-digit number issued by the IRS for tax reporting purposes. All businesses with employees are required to report wages to the IRS using their EIN. You can register for an EIN online with the IRS.
Sole proprietors without employees aren't required to have an EIN. Instead, you can use your Social Security number to report taxes. Nevertheless, you might want to obtain an EIN. Some banks require an EIN to open a bank account, and having an EIN can reduce the risk of identity theft.
In Nebraska, businesses are required to report taxes and file various employee reports. You might need to use your EIN when registering your business to report taxes through the Nebraska Department of Revenue (DOR).
You should consider taking the following additional steps once you've started your sole proprietorship:
To find out how to form a sole proprietorship in any other state, see our 50-state guide to establishing a sole proprietorship.
You might not need to submit paperwork to start a sole proprietorship in Nebraska. But your specific circumstances could require you to file forms at the state and local level and comply with various rules and regulations. As a business owner, it's important to understand what steps you need to take to legally start and operate your sole proprietorship.
If you have business experience and only need to meet a few requirements to establish your sole proprietorship, you can probably do the work yourself. But if you need specific guidance or run into a complicated issue when starting your business, you should talk to a small business lawyer. They can help you register your business name, file your taxes, and obtain licenses and permits.