Which key aspect differentiates a general partnership from a limited partnership?

A general partnership is characterized by all partners having unlimited liability, meaning they are personally liable for the debts and obligations of the partnership. In contrast, a limited partnership includes both general partners, who manage the business and have unlimited liability, and limited partners, who primarily invest and have liability only up to the amount of their investment.

This distinction—where general partners bear full financial responsibility for the partnership's liabilities while limited partners enjoy protection from personal liability beyond their contributed capital—clearly differentiates a general partnership from a limited partnership.

The idea that only general partners manage the business is true but does not encapsulate the essential difference in liability between the two types of partnerships. Similarly, the statement that all partners have limited liability in both types is inaccurate because, in a general partnership, all partners possess unlimited liability. Lastly, the notion that limited partnerships cannot have more than two partners is incorrect, as limited partnerships can have multiple general and limited partners, without any strict cap on their number. Thus, the key aspect of liability in distinguishing between the two types of partnerships lies in the varying levels of financial responsibility among the partners.