What is required for a limited partner to maintain limited liability?

For a limited partner to maintain limited liability, it is essential that they do not participate in the management of the business. Limited partners are typically investors who contribute capital to a partnership but do not have a say in its day-to-day operations. If a limited partner takes an active role in managing the partnership, they risk losing their limited liability status and may become personally liable for partnership debts.

This principle arises from the concept that limited partners should not interfere with the management to ensure their protection under the law. By remaining passive investors, they can enjoy the benefits of limited liability, which protects their personal assets beyond their investment in the partnership.

The other options do not align with the core requirement for maintaining limited liability. Participation in management directly contradicts the principle, and while it is beneficial for limited partners to disclose their status, it does not fulfill the primary requirement of remaining uninvolved in management. Additionally, making significant capital contributions, while important for the partnership's funding, also does not directly affect the limited partner’s liability status if they engage in management activities.