The limited liability company combines the limited liability advantage of a Corporation with the protection of your ownership interest.  Yet, there are essential reasons you should prefer a Limited Liability CO. (LLC) or corporation to the Limited Partnership:

– As with an S corporation, you can avoid double taxation with a Limited Liability Company.  And, the Limited Liability Company can avoid the C-Corporation’s corporate income tax, should you so choose.  Income from the Limited Liability Company can be singly taxed to its members, as with a partnership.  You may also avoid state corporate franchise tax by using an LLC.

– Importantly, you incur no personal liability with a limited liability company.  As with a corporation, LLC managers and members are personally protected from the creditors of the LLC, even when the members actually manage the company

-In contrast, general partners of a Limited Partnership are personally liable for partnership debts.  Moreover, the limited partners of a Limited Partnership cannot participate in managing the partnership without incurring personal liability for partnership debts.

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