Which type of partnership limits liability to the amount invested by limited partners?

A limited partnership is specifically structured to provide a distinct separation of liability among its partners. In this arrangement, there are both general partners and limited partners. General partners manage the business and are personally liable for the partnership’s obligations, whereas limited partners typically serve as investors who contribute capital but do not partake in day-to-day operations. Their liability is restricted to the amount of their investment, safeguarding their personal assets from the partnership's debts and liabilities.

This structure is particularly advantageous for investors who wish to limit their risk exposure in a business venture while still providing essential capital. It encourages investment, as parties can engage in the partnership without exposing themselves to the full liability of the business.

Other types of partnerships, such as a general partnership, do not provide this protection, as all partners share unlimited personal liability. Non-profit partnerships are oriented towards charitable purposes without the profit motive, usually not fitting the standard definition of liability as it applies in business contexts. A joint venture, while similar in some respects to partnerships, is typically a temporary partnership formed for a specific project and does not inherently limit liability in the way a limited partnership does.

Understanding the structure and implications of a limited partnership is crucial in real estate and other business ventures, particularly for those who wish to