Which part of a limited partnership has restricted liability?

In a limited partnership, the limited partner holds restricted liability, which is a key characteristic of this type of business organization. Limited partners are typically not involved in the management of the partnership and their liability for the debts and obligations of the partnership is limited to the amount of their investment in the partnership. This means that if the partnership incurs debt or faces lawsuits, the limited partner’s personal assets are generally protected beyond their initial investment.

In contrast, the general partner in a limited partnership has unlimited liability, meaning they can be held personally responsible for the debts and obligations of the partnership. The managing partner also falls under this category unless they are specifically designated as a limited partner. Therefore, the distinction between the types of partners in a limited partnership is crucial for understanding their respective levels of liability, making the limited partner the correct choice for having restricted liability.