Taxation:

• LLC must file a federal income tax return (IRS Form 1065: http://www.irs.ustreas.gov)
• A pass through entity, the LLC itself is not taxed
• LLC net income/loss is attributed directly to its members
• Members may have to pay self-employment taxes and make estimated tax payments on their share of LLC income
• Each member reports their share of company income/loss on their individual tax return (IRS Form 1040, Schedule E)
• LLC must withhold income taxes and FICA from employee wages
• LLC must pay FUTA on its share of social security for employees

Operating Agreement:

• Strongly recommended but not required by law
• Defines members obligations and duties to each other and the company