There are certainly business situations for which Limited Partnership is a "good fit" (for example, if real estate is involved). But that's beyond scope of this article.

So, back to my original question:

How do you move from world of Unlimited Liability to Limited Liability? By forming a "C" Corporation, an "S" Corporation, or a Limited Liability Company.

Having made such a bold statement, let me also say this: I am a firm believer that when it comes to this Choice of Entity issue, one size does not fit all!

So let me add a strong disclaimer:

There certainly are situations where a "C" Corporation, an "S" Corporation, or a LLC is not appropriate.

But generally speaking, for many Small Biz Owners and Self-Employed People, one of these three entities is often times best fit.

If you want protection of limited liability, you've got to choose one of these three entities. Remaining a Sole Proprietor or a General Partnership just doesn't make much sense -- you are putting yourself, your family, and all your personally owned assets at risk.