Which of the following best describes a limited partner?

A limited partner is defined primarily by the nature of their liability, which is limited to the amount of their investment in the partnership. This characteristic distinguishes limited partners from general partners, who generally have personal liability for the debts and obligations of the partnership.

In a limited partnership, the role of the limited partner is typically that of an investor rather than a manager. They do not take part in the management of the business or its day-to-day operations, which further emphasizes their limited exposure to liability. Therefore, the correct description of a limited partner is indeed one who is liable only to the extent of their contributions, ensuring that their financial risk is capped at what they have invested.

In contrast, other choices present descriptions that do not align with this fundamental aspect of limited partnerships. A partner with authority to manage the day-to-day operations is indicative of a general partner, who assumes more active control and associated liabilities. A partner assuming full responsibility for debts corresponds again to a general partner, not a limited one. Lastly, a partner who has no financial stake in the partnership does not meet the fundamental criterion of being a partner, whether limited or general, as they would have no contribution to limit, thus missing the essential definition.