What must a firm do to change its business entity from a general partnership to a limited liability company?

To change a business entity from a general partnership to a limited liability company (LLC), the firm must apply for a new license and pay the specified fee. This process involves officially creating a new legal entity under state law, as LLCs are governed by different regulations than general partnerships. The formation of an LLC requires filing Articles of Organization with the appropriate state authority and adhering to state-specific requirements for LLCs.

This transition is significant because it affects the liability and tax structure of the business. A general partnership does not offer personal liability protection for its partners, while an LLC provides limited liability, protecting the owners' personal assets from business debts and claims. Thus, establishing a new legal entity is necessary to ensure compliance with these laws.

Simply notifying the state or merging with another company doesn't fulfill the specific requirements for a change in business structure. Forming a corporation instead is also not necessary unless that is the desired structure, as the correct approach in this scenario is specifically to form an LLC.