Able and Baker had a partnership and in that capacity incurred debt. If they convert to an LLC their old debt will be subject to the insulation from personal liability that characterizes the LLC.

Question

Quizplus · Accepted Answer

While the creation of an LLC can limit personal liability for future debts, it typically does not provide retroactive insulation for past debts incurred by a partnership. The creditors who provided the original debts could still hold Able and Baker personally liable for repayment.

Able and Baker Had a Partnership and in That Capacity