Identification

• An LLC is taxed as a partnership or a corporation. State laws do not impose a statutory requirement for employees. In other words, an LLC can operate at any time with or without employees. Owners are not considered employees.
  
  

Function

• To operate an LLC, a distinguishable business name must be registered with the secretary of state's office. The operating agreement must explain how you plan to operate your LLC as well as the number of employees you expect to hire and in what capacity. Departments or employees who will manage the day-to-day operations of your company should be designated. Articles of organization identify your business name, statement of purpose and owner contact information. They should be filed with your secretary of state's office. Apply for a Federal Employer Identification Number (FEIN), which identifies your business. Your LLC's FEIN will appear on any check issued to an employee.
  
  

Size

• An LLC can merge with another LLC to form a larger company. Both companies -- represented by their respective board of directors and shareholders -- will record an operating agreement and file it along with a certificate of merger at the secretary of state's office. The operating agreement covers such issues as employee training, employee retention and employee salary levels. The new LLC and its employees will operate under a new business model and file federal and state taxes under the newly formed LLC's business name.
  
  

Warning

• LLC owners receive full personal liability protection from business debts and liabilities. However, an LLC owner can be held personally liable if he engages in fraudulent, illegal or reckless behavior that injures the public or company employees. In such cases, the LLC owner can be sued for damages.