Which description accurately defines a limited partnership?

• A. No liability for any partner.
• B. All partners have equal management rights.
• C. At least one general partner with management/liability and one limited partner with investment/liability shield.
• D. A corporation with limited liability.

Answer: (C)

A limited partnership features two distinct roles: general partners who run the business and have unlimited personal liability for the partnership’s debts, and limited partners who contribute capital and enjoy liability limited to their investment while typically not participating in management. The description that says there is at least one general partner with management responsibility and unlimited liability, together with at least one limited partner who provides capital and has liability shield, matches this structure exactly. It captures the core division of control and risk that defines a limited partnership.

Other descriptions don’t fit. A structure with no liability for any partner would resemble a corporation’s shield but isn’t how a limited partnership operates. Equal management rights would ignore the distinction between general and limited partners, since limited partners generally do not have management authority to preserve their liability protection. Finally, a corporation with limited liability is a different type of entity altogether, not a partnership.