Separate Legal Entity Status

A corporation is a separate legal entity existing under authority granted by Nebraska state law. It has its own identity separate and apart from its shareholders/owners.

Broad Range of Powers

As a separate legal entity, a corporation has the power to act in any way permitted by law and by its own corporate charter. For example, a corporation can enter into contracts, buy and sell both real and personal property, sue and be sued, and can even be responsible for breaking the law (i.e. committing a crime).

Small Claims Court

In Nebraska - as in most jurisdictions, any officer or director or employee can appear in small claims court on behalf of the corporation.

Separate Liability for Corporate Debts

As a separate legal entity, a corporation is responsible for its own debts. Normally, shareholders, directors, and officers are not responsible for corporate liabilities. If the corporation suffers losses, the corporation itself must bear those losses to the extent of its own resources, and not the personal assets of the individual shareholders. In effect, however, shareholders indirectly bear these losses by a decline in the value of the stock they hold in the corporation.

Note however, that shareholders, directors, and/or officers may be held liable for the debts of the corporation where the court imposes "alter-ego liability" or where the individual has personally guaranteed the corporate debt.

Perpetual Duration

A corporation is capable of continuing indefinitely. Its existence is not affected by the death or incapacity of shareholders, directors, or officers of the corporation.

Duration of Corporation Compared to LLC

An LLC has a limited existence. Absent a contrary agreement, a limited liability company (LLC) is dissolved upon the death, withdrawal, or bankruptcy of a member unless the business is continued by unanimous vote of the remaining members. Although the operating agreement can be drafted to avoid such a result, the life of the LLC is still limited to the termination date in the Articles of Organization.

There are also some DISADVANTAGES in INCORPORATING

Corporate Formalities

A corporation can be created only by compliance with Corporation Laws of the State of Nebraska. This requires filing of Articles of Incorporation with the State of Nebraska Secretary of State's Office and payment of the requisite state fees and taxes.

A corporation is required to have a board of directors, corporate officers, annual shareholders meetings, and to maintain separate books and records. Failure to observe such formalities may result in the personal liability of shareholders for corporate debts. However, where the corporation has only one shareholder, the state may not allow that one shareholder to act as director and all officers (President, Secretary, and Treasurer) and still be protected against liability.

To incorporate your business in the State of Nebraska You can either call us at 402-734-0635 (Toll Free - 1-866-734-1911), contact us over the WEB, complete the confidential FORM or complete the button below to actually start the incorporation process.

The Law Office of Patricia Geringer also provides a full range of business legal services - from contract reviews to commercial bankruptcy and liquidation. Call us today. Remember, the first thirty minutes are FREE!