Simple questions about LPARs

Hello,

I am looking into virtualizing AIX 7.1 on our p7 machine that already has AIX 7.1 installed on it. I have a few questions about them:

1) In order to gain LPAR functionality, do I need to purchase PowerVM software?

2) I read that LPARs are managed from locally attached graphical workstations called HMCs. Is HMC a physical device I need to connect to my system?

3) Can I create LPARs on my current system without losing my current OS? Or will I have to reformat my disks before starting?

Thank you in advance!