Limited Liability Companies ("LLC"), rather than limited partnerships, have become the planning tool of choice for owners of real estate seeking to protect themselves from liability. What if you have an existing partnership and you want to convert to an LLC? The discussion below applies to all partnerships, general or limited.
As background, generally a member of an LLC is not personally liable for damages arising from activity inside the LLC. On the other hand, a general partner of a limited partnership is personally liable for damages arising from activity inside the partnership. Take this example: