When forming a limited partnership, who among partners typically qualifies as a limited partner?

When forming a limited partnership, a limited partner is typically defined by their role in the partnership, specifically their investment and liability exposure. A limited partner is someone who contributes capital to the partnership but does not participate in its day-to-day management and operations. This structure allows the limited partner to have limited liability, meaning they are only liable for the debts of the partnership up to the amount they invested.

In this context, the correct answer emphasizes the importance of the type of contribution a partner is making, with capital contributions being the primary characteristic of a limited partner. Unlike general partners, who are actively involved in managing the partnership and bear unlimited liability, limited partners must refrain from any management activities to maintain their limited liability status.

Limited partners cannot rely on contributions of services or office equipment because those do not qualify them within the limited liability framework established by partnership law. Such contributions do not provide the necessary financial backing expected from a limited partner. Therefore, it's essential to recognize that the critical characteristic of a limited partner hinges on their financial investment rather than their involvement in management or provision of non-monetary resources.