Nebraska Splits the Money Equally and Gives Nobody Automatic Authority
Nebraska adopted the uniform act in 2010 and codified it at Neb. Rev. Stat. §§ 21-101 to 21-197. Two defaults in that act drive most of the value of writing an operating agreement, and both cut against what founders assume.
The first is money. Read § 21-133(a) and you find that every distribution a Nebraska company makes ahead of dissolution goes out in equal shares among its members and its dissociated members. Nothing in the sentence looks at who funded the business, nothing looks at the percentages on the cap table, and nothing confines the payment to people who are still involved. Somebody who walked away eighteen months ago is still on the list, still taking the same slice as the founder.
The second is authority. Section 21-126(a) says a member is not an agent of the company solely by reason of being a member. In older statutes every member could bind the company by walking into a supplier and signing. Nebraska switched that off and replaced it with a public filing, the statement of authority in § 21-127, which is how a Nebraska company tells the world who may sign. If nobody files one and the operating agreement does not say, a counterparty has no easy way to check.
What the uniform act supplies where the agreement is silent
Equal distributions under § 21-133(a), including to dissociated members. Member management by default under § 21-136(a), with each member holding equal rights under § 21-136(b)(2) and a majority deciding ordinary matters under (b)(3). Consent of every member for an act outside the ordinary course under § 21-136(b)(4), and consent of every member to amend the agreement under (b)(5). No agency power by virtue of membership under § 21-126(a). And no right to demand a distribution in anything other than money under § 21-133(c).
Why one owner in Nebraska still writes it down
Section 21-129(a) keeps company debts off the members, and § 21-129(b) adds that the mere failure to observe particular formalities relating to the exercise of the company's powers or the management of its activities is not a ground for imposing liability. That removes the weakest argument against a sole owner. It does not remove commingled funds, thin capitalisation or a company held out as the owner personally, and it does nothing about § 21-129(c), which makes a member, manager or employee with the duty to collect or pay over company taxes personally liable for a wilful failure to do so. The agreement, the capital account and a separate bank account are the record that answers the rest. Our single-member LLC guide covers the detail.
Does Nebraska Require One, and What Are the Limits
No requirement. Nebraska is not among the states, headed by California, Delaware, Missouri, Maine and New York, whose statutes tell members they must adopt an agreement. Section 21-110(a) simply says that to the extent the agreement does not provide for a matter, the Nebraska Uniform Limited Liability Company Act governs it.
Section 21-110(b) then lists eleven things the agreement may not do. It may not vary the company's capacity to sue and be sued in its own name, vary the applicable law, vary the power of a court under § 21-120, eliminate the duty of loyalty or the duty of care, eliminate the contractual obligation of good faith and fair dealing in § 21-138(d), unreasonably restrict the information rights in § 21-139, vary the power of a court to decree dissolution in the circumstances in § 21-147(a)(4) and (5), vary the winding up requirement, unreasonably restrict a member's right to bring an action under §§ 21-164 to 21-169, restrict the merger approval rights of a member who will take on personal liability, or restrict the rights of a person who is not a member.
Nothing is filed. The Secretary of State records the certificate of organization, the biennial report, statements of authority and later filings. There is no operating agreement form, no submission channel and no fee, because there is no filing. The Nebraska filings that do carry a fee are formation, the biennial report, certificates of amendment, dissolution and reinstatement.
What Belongs in a Nebraska Operating Agreement
Nebraska operating agreement at a glance
| Item | Nebraska position |
|---|---|
| Statutory requirement | None anywhere in §§ 21-101 to 21-197 |
| Form required | The act names none, so put it in a signed document |
| Filed with the State | Never. It forms no part of any charter record |
| State fee to adopt | $0. Nothing is submitted, so nothing is charged |
| Governing act | Nebraska Uniform Limited Liability Company Act, Neb. Rev. Stat. §§ 21-101 to 21-197 |
| Custom drafting | $99 flat |
Ten clauses do the work. In Nebraska the first job of most of them is to replace an equal share with a real one.
1. Members, interests and a percentage that means something
Name every member and every percentage, then say expressly that distributions follow those percentages. Without that sentence § 21-133(a) splits distributions equally and the cap table describes nothing. Section 21-130 covers how a person becomes a member.
2. Contributions and liability for them
Section 21-131 sets the form a contribution may take and § 21-132 sets liability for a promised contribution, including that an obligation is not excused by death or disability and that it may be compromised only by consent of all members. Record cash, property and services with agreed values and set out capital calls, notice periods and dilution.
3. Member managed or manager managed, in the act's own words
Members run the company unless the document says otherwise, and § 21-136(a) is fussy about how it says otherwise: the agreement has to state expressly that the company is or will be manager-managed, that it is or will be managed by managers, or that management is or will be vested in managers, or use words to similar effect. Naming somebody the president does not do it. Use the statutory phrasing, then spell out what the manager may decide alone, how long the appointment runs and what it takes to end it.
4. Voting weight and the unanimity outside the ordinary course
Fix votes to percentage interests if that is the intention, then deal with § 21-136(b)(4): an act outside the ordinary course may be undertaken only with the consent of all members. In a five member Nebraska company that is five vetoes over a loan, a lease or a new line of business. Define the ordinary course and set a workable threshold.
5. Distributions, and getting off equal shares
Write the sharing ratio, the timing and the reserve, and address dissociated members expressly, because § 21-133(a) keeps them inside the equal split. Section 21-134 limits distributions and § 21-135 imposes liability for an improper one, so a reserve clause protects the managers as well as the balance sheet.
6. Transferable interests and admission
The transferable interest is defined at § 21-140 and its movement is governed by § 21-141, with a transferee taking cash rights and nothing else. Lock the transfer down, give the remaining members first refusal, and keep admission behind a consent vote. There is a second reason to bother: a transfer of an entire interest is one of the grounds on which the other members may expel somebody under § 21-145(4)(B), so a loose transfer clause manufactures a fight.
7. Dissociation, wrongful dissociation and what a leaver is owed
Section 21-144 covers a member's power to dissociate and wrongful dissociation; § 21-145 lists the events, including express will to withdraw, expulsion under the agreement, unanimous expulsion in defined circumstances, judicial expulsion for wrongful conduct or persistent breach, death, and bankruptcy in a member-managed company. Section 21-146 sets the effect. The act does not force a buyout, so write the price and terms yourself.
8. Dissolution, oppression and the lesser remedy
Section 21-147(a) dissolves the company on an event the agreement states, on the consent of all members, after 90 consecutive days with no members, or on a court order. Subsection (a)(5) covers managers or controlling members acting illegally, fraudulently or oppressively in a way directly harmful to the applicant, and subsection (b) lets the court order a remedy other than dissolution. Subsections (c) to (e) allow a dissolution to be rescinded by consent of all members.
9. Federal tax election and the person who signs it
Pin down the federal classification in the document: default partnership treatment, an S election on Form 2553, or corporate treatment on Form 8832. Say who executes the election and who serves as partnership representative in an audit. Nebraska adds one more name to that list, because § 21-129(c) puts personal liability on whoever is charged with collecting or remitting company taxes if the failure to do so is wilful. The federal rules themselves are set out in the IRS guidance for limited liability companies.
10. Amendment threshold and dispute resolution
Section 21-136(b)(5) requires consent of all members to amend the agreement unless you provide otherwise, so set a threshold you can reach. Add mediation and a valuation formula, keeping in mind that § 21-110(b)(9) stops you from unreasonably restricting a member's right to bring an action under §§ 21-164 to 21-169.
Form your LLC
If you would rather not do this yourself, we prepare the articles, check name availability with the state, and file it for you. Or keep reading and file it on your own. This guide covers everything you need either way.
Section 21-127: Nebraska Publishes Who Can Sign
Because § 21-126(a) removes agency power from membership itself, Nebraska needs another way to tell counterparties who may bind the company, and § 21-127 supplies it. A limited liability company may deliver a statement of authority to the Secretary of State for filing. The statement must include the company name and the street and mailing addresses of its designated office. It may state the authority, or limitations on the authority, of all persons holding a position, and it may state the authority or limitations of a specific named person, in each case both to execute an instrument transferring real property held in the company's name and to enter into other transactions on behalf of the company.
Subsection (b) sets out how a statement is amended or cancelled, and § 21-128 provides a matching statement of denial for a person named in one who disclaims the authority. A statement of authority affects only the power of a person to bind the company as against people who are not members, so it is an outward facing document. The internal allocation of authority still lives in the operating agreement, which is why the two should be drafted together and updated together.
For a company that buys, sells or mortgages Nebraska real property, the statement is worth filing on day one. For everyone else, the practical substitute is a clear signing authority clause in the agreement plus a members resolution the bank can keep on file.
Charging Orders Under Section 21-142
Subsection (a) lets a court enter a charging order against the transferable interest of a judgment debtor for the unsatisfied amount of the judgment. The order is a lien and requires the company to pay over any distribution that would otherwise go to the debtor. Subsection (b) allows a receiver of those distributions with power to make the inquiries the debtor might have made, and any other orders needed to give the charging order effect.
Subsection (c) caps how far that protection goes. Once a creditor demonstrates that the payments coming through a charging order will not clear the debt in a reasonable period, a Nebraska court is permitted to foreclose the lien and sell the interest. Whoever buys at that sale takes economics alone, never membership, and holds subject to § 21-141. Two escape hatches sit in subsections (d) and (e): the debtor may kill the charging order by paying the judgment and filing the satisfaction, or the company or the untouched members may pay the creditor out and step into the creditor's shoes. Exemption law survives under subsection (f), and subsection (g) closes the section by declaring it the only route a judgment creditor has to that interest.
Exclusive, with foreclosure available on a showing. That is materially weaker than Nevada, where NRS 86.401(2)(a) rules out foreclosure entirely and names single owner companies, and it is stronger than Montana, where § 35-8-705(3) permits foreclosure at any time without a showing. In Nebraska the drafting response is to make the showing hard: restrict transfers, keep admission behind unanimous consent, and make distributions discretionary above a stated reserve so there is no predictable stream to measure.
Duties Under Section 21-138
Under § 21-138(a) loyalty and care run from every member of a member-managed company to the company itself and to the other members. Subsection (b) breaks loyalty into three obligations: hold as trustee anything of value picked up through the company's activities, through the use of its property or by taking a business opportunity that belonged to it; stay out of transactions where you are acting for someone whose interest runs against the company; and do not compete with it while it is still trading.
Subsection (c) sets the duty of care, subject to the business judgment rule, as acting with the care a person in a like position would reasonably exercise in similar circumstances and in a manner the member reasonably believes to be in the best interests of the company, with a right to rely in good faith on competent and reliable sources. Subsection (d) requires members and managers to discharge duties consistently with the contractual obligation of good faith and fair dealing. Subsection (e) gives a fairness defence to a self dealing claim, and subsection (f) lets all the members authorise or ratify, after full disclosure of all material facts, a specific act that would otherwise breach loyalty. In a manager-managed company subsection (g) shifts those duties onto the manager.
Section 21-110(b)(4) and (5) then set the wall: an agreement may not eliminate the duty of loyalty, the duty of care or the contractual obligation of good faith and fair dealing, subject to the qualifications in the following subsections. So the useful Nebraska drafting is narrow and specific: name the categories of activity that will not count as disloyalty, name the approval mechanism, and use the § 21-138(f) ratification route for anything unusual.
Banks, Lenders and the Package They Want
A Nebraska bank opening a business account asks for the filed certificate of organization, the EIN letter, identification for each beneficial owner and either the operating agreement or a members resolution naming the authorised signers. Federal customer due diligence rules require the bank to identify and certify the beneficial owners of a legal entity customer, and the membership schedule is what makes those percentages checkable.
In Nebraska the signing question is sharper than elsewhere because of § 21-126(a). A lender documenting a farm operating line, an implement dealer financing equipment or a title company handling a quarter section will want either a filed statement of authority under § 21-127 or a clean authority clause in the agreement supported by a resolution. Getting that in place before the loan committee meets saves a week.
Keep the signed agreement with the file a buyer or a lender will ask for: the certificate of organization, the current registered agent designation, a recent certificate of good standing, any trade name registration, and the paperwork from any state where you have qualified as a foreign company.
What Happens With No Agreement: the Nebraska Risk in Dollars
Nebraska imposes no penalty. The equal shares rule does the damage quietly, and it repeats every year.
Take an Omaha company with four members. One contributed $480,000, two contributed $60,000 each and the fourth contributed a book of business valued at nothing on the books. The company distributes $400,000 in year four. Section 21-133(a) splits it equally at $100,000 each. Against a pro rata split the major contributor is roughly $200,000 short in that single year, and the clause that would have fixed it is one sentence.
Now add a departure. A member dissociates under § 21-145(1) and the company keeps distributing. Because § 21-133(a) includes dissociated members in the equal split, that former member keeps taking $100,000 a year from a business they no longer work in, and the act does not require the company to buy them out. Over five years that is $500,000 leaving the company for nothing.
Finally the veto. Section 21-136(b)(4) requires the consent of all members for any act outside the ordinary course. A member with a ten per cent interest can block the purchase of a $1.2 million facility or a merger. When that ends in court, a § 21-147(a)(5) petition with the subsection (b) alternative remedy costs each side $60,000 to $200,000 in fees and appraisal, and the business runs on hold while it is argued.
Five Mistakes Nebraska Filers Keep Making
Mistake 1: A template that assumes distributions follow percentages
The standard clause recites that profit follows membership interests, which is exactly right in a state whose fallback is pro rata. Nebraska's fallback is not. Section 21-133(a) divides everything into equal shares, and a form that never names the Nebraska Uniform Limited Liability Company Act hands the other side an argument about whether a broad recital can override a specific statutory rule.
Mistake 2: The sole owner who relies on § 21-129(b)
Failure to observe particular formalities is not a ground for liability in Nebraska, which is genuinely helpful. It says nothing about commingling, thin capitalisation or the tax responsibility in § 21-129(c). The agreement, the capital account and a separate bank account are what carry the rest.
Mistake 3: Letting a dissociated member stay inside the distribution split
Section 21-133(a) shares distributions equally among members and dissociated members. Unless the agreement suspends distributions on dissociation and sets a buyout, a former member remains a permanent claim on the company's cash.
Mistake 4: Sending it to the Secretary of State
Nothing is submitted, so nothing is charged, and the Division has nowhere to put it. The document Nebraska genuinely wants on the public record is a § 21-127 statement of authority. Companies that mix the two up expose their ownership terms and still leave the counterparties guessing about who may sign.
Mistake 5: Assuming a member can sign for the company
Section 21-126(a) says a member is not an agent solely by reason of being a member. A supplier contract signed by a member with no authority clause, no resolution and no filed statement of authority is a dispute waiting for a counterparty who cares.
Three Nebraska Companies in Practice
Example: a grain handling business in Grand Island
Platte Valley Grain Handling LLC had three members. One financed $540,000 of legs, bins and a scale; the other two brought labour and a customer list. With no agreement, § 21-133(a) split the first $240,000 distribution equally at $80,000 each. The agreement they signed set distributions at 70, 15 and 15 until the capital was returned, added a tax distribution and defined the ordinary course so equipment purchases under $150,000 no longer needed unanimity.
Example: a veterinary clinic in Kearney
Buffalo County Animal Clinic LLC saw a member dissociate under § 21-145(1) after a move out of state. Because dissociated members stay inside the equal split in § 21-133(a), she continued to receive about $85,000 a year from a clinic she no longer worked in, and nothing in the act required a buyout. The successor agreement suspended distributions from the date of a dissociation notice and required a purchase at three times trailing earnings over 60 months.
Example: a commercial roofing contractor in Lincoln
Salt Creek Roofing LLC signed a $340,000 subcontract through a member who was not a manager and had no written authority. The general contractor's counsel found § 21-126(a), asked for a statement of authority under § 21-127 and found none on file. The job was delayed three weeks while the company filed a statement and adopted an agreement with a signing authority schedule and dollar thresholds.
How File.Business Drafts Nebraska Operating Agreements
Every Nebraska agreement we draft starts by displacing § 21-133(a) and dealing with dissociated members, then defines the ordinary course so § 21-136(b)(4) does not give a small holder a veto. We add a signing authority schedule that lines up with any statement of authority filed under § 21-127, a dissociation buyout the act does not supply, transfer restrictions that keep a § 21-142 purchaser outside the membership, and duty carve outs drawn narrowly enough to survive § 21-110(b). Included with Nebraska LLC formation or available separately.
Free templates against drafted agreements
A free template is workable for a single owner Nebraska company with no outside money, provided the distribution language is checked against § 21-133. It is a poor trade for anything else, because the equal shares rule, the dissociated member problem and the agency rule in § 21-126 are exactly the points templates do not address. At $99 the drafted version costs less than an hour of Nebraska counsel. Read operating agreement essentials and LLC against S corporation next.
Nebraska operating agreement questions
Is an operating agreement required for a Nebraska LLC?
No. The Nebraska Uniform Limited Liability Company Act, sections 21-101 to 21-197, does not compel members to adopt one. Section 21-110(a) says only that where the agreement is silent, the act governs. The defaults are unusual enough that most Nebraska companies should still adopt one, starting with the equal shares distribution rule in section 21-133.
How are distributions split in a Nebraska LLC with no agreement?
Down the middle, and former owners are included. Section 21-133(a) directs that every distribution ahead of dissolution goes out in equal shares among the members and the dissociated members alike. The size of anyone's capital contribution is irrelevant to the calculation, and somebody who dissociated years ago keeps drawing the same slice until a written term stops them.
Do I file the operating agreement with the Nebraska Secretary of State?
No. The charter record in Lincoln holds the certificate of organization, the biennial report and filings such as a statement of authority under section 21-127. An operating agreement is not one of them. The Division publishes no form for it, accepts no submission of it and charges nothing, because it is a private contract among the members. Sign it, date it and file it in your own records.
Can a member sign contracts for a Nebraska LLC?
Not automatically. Section 21-126(a) provides that a member is not an agent of the limited liability company solely by reason of being a member. Authority has to come from the operating agreement, a members resolution, or a statement of authority filed with the Secretary of State under section 21-127, which may state the authority or limitations of a position or of a named person.
What is a Nebraska statement of authority?
It is a public filing under section 21-127. The statement gives the company name and the street and mailing addresses of its designated office, and may state the authority, or limitations on authority, of all persons holding a position or of a specific person, both to transfer real property held in the company's name and to enter into other transactions. Section 21-128 provides a matching statement of denial.
Can a creditor foreclose on a Nebraska member's interest?
Only on a showing. Section 21-142(c) lets a court foreclose the charging order lien and order the sale of the transferable interest where distributions under the charging order will not pay the judgment debt within a reasonable time. The purchaser obtains only the transferable interest and does not become a member. Section 21-142(g) still makes the section the exclusive remedy for satisfying a judgment from that interest.
Can a Nebraska operating agreement waive fiduciary duties?
Not eliminate them. Section 21-110(b) forbids an agreement from eliminating the duty of loyalty, the duty of care or the contractual obligation of good faith and fair dealing in section 21-138(d). What the agreement can do is narrow specific duties within the limits the act allows, and section 21-138(f) lets all the members authorise or ratify, after full disclosure of all material facts, a specific act that would otherwise breach loyalty.
Need a custom Nebraska Operating Agreement?
File.Business drafts Nebraska-specific Operating Agreements at $99 flat: customized for single-member or multi-member structure, ownership percentages, capital contributions, tax election preferences, and management structure. Includes member-signature template and document-vault storage.
Doing this in Nebraska specifically: Nebraska operating agreement drafting covers the clause set, the sections each clause displaces and how the document should line up with a statement of authority. None of it is filed with the State.
Every section cited here was read on the Nebraska Legislature's own statute pages. The act is amended periodically; confirm the current wording before relying on it.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
