What characterizes a limited partnership?

A limited partnership is characterized by having at least one partner with limited liability. In this structure, there are two types of partners: general partners and limited partners. General partners manage the business and have unlimited liability, which means they are personally liable for the debts and obligations of the partnership. On the other hand, limited partners contribute capital and receive income, but their liability is limited to the amount they invested in the partnership. This means their personal assets are generally protected from the partnership's creditors, distinguishing limited partnerships from general partnerships, where all partners bear full liability.

The correct answer highlights this key feature of limited partnerships, emphasizing the necessity of having at least one partner whose liability is limited. This distinction is critical in understanding how different partnership structures operate and the implications for liability and investment responsibilities among partners.