Which parties typically have limited liability in a partnership?

In partnership law, limited partners are specifically designed to have limited liability, which means their financial responsibility for the debts and obligations of the partnership is limited to the amount they have invested in the partnership. This is a key feature of limited partnerships, where at least one partner must be a general partner with unlimited liability, while others can be limited partners who typically do not engage in the active management of the business.

Limited partners enjoy the benefit of reduced risk compared to general partners, who face unlimited liability for business debts, meaning their personal assets could be at risk if the partnership fails. Therefore, the distinction between limited and general partners is crucial.

The inclusion of all partners or managing partners in the options does not reflect the actual structure of limited liability partnerships. General partners assume full responsibility for the partnership's obligations, while managing partners may also be general partners unless specified otherwise in the partnership agreement. Thus, the correct focus is on limited partners, who are the ones afforded limited liability within this context.