The supposed simplicity of LLCs can be deceiving.  I see clients and their advisors setting up limited liability companies willy nilly without research into the consequences.  Some of this can be attributed to the fact it is so easy to register an LLC with the Colorado secretary of state.  But registration isn't all that is needed to keep you out of trouble, and registration without considering the consequences can just lead to more trouble.

For example, I have a client who has registered a different LLC for every location where he operates.  He hasn't done anything but register these LLCs and still operates all of his business with only one tax ID number.  Some leases are signed with the location's LLC and some are signed with his "parent" LLC.  It's a mess.

Another client is under investigation with the state Securities and Exchange Commission because she has been promising a number of people "shares" in her LLC.  Of course, there is a basic problem that LLCs don't have shares.  They have membership interests or units instead.  But this isn't just a vocabulary problem. Like this Iowa LLC found when it offered a piece of the company to others,  when you start to offer partial ownership in your company to others, you have to comply with state and federal securities laws.  She didn't even know about them.  "After all, she registered her LLC with the state.  That was easy enough, wasn't it?"   She's lucky she's not in trouble with the federal SEC (at least not yet.)

The more common problem is the LLC registered by John Doe but operated by John and his buddy Jason as partners.  Because the LLC doesn't have any documentation besides the Articles of Organization, there's nothing to show Jason has an interest, or if he does, what his share is.  If there is tax to pay, will it be paid only by John?  If Jason decides to leave, how does he get is investment back? 

Sometimes complying with securities law is as simple as filing a one page form.  Documenting who owns what may be in the operating agreement or a separate contract.  But you won't know the ins and outs of these issues if you think all you have to do is register with the Secretary of State and you're done.