A family limited partnership (FLP) is not uniquely different from a limited partnership except that the participants are generally limited to family members and an FLP is often structured to receive special estate tax treatment. However, I personally haven’t created a limited partnership in years. Why?
A limited partnership is required to have one or more limited partners, and one or more general partners. The general partners have UNLIMITED liability for the partnership debts, so any time you create a limited partnership, the general partners potentially face a high risk of exposure.
By comparison, NONE of the participants of a limited liability company (LLC) have any obligation to pay the LLC’s debts. Additionally, all of the advantages of a limited partnership can also be obtained using an LLC. Thus substituting the LLC in place of an FLP adds the advantage of liability protection.