What defines a limited partnership?

A limited partnership is characterized by having at least one general partner and one or more limited partners. The general partner holds full responsibility for the management of the partnership and assumes unlimited liability for the debts and obligations of the partnership. In contrast, limited partners typically contribute capital and share in the profits but do not participate in day-to-day management. Their liability is confined to the amount of their investment in the partnership, which provides a safety net in terms of personal financial risk.

This structure allows for a combination of active management by the general partner and passive investment from limited partners. Hence, the answer regarding the necessity of at least one general partner reflects the defining feature of a limited partnership, ensuring that the framework remains intact for business operations and risk distribution.

The other choices do not align with the definition of a limited partnership; for instance, limited partnerships can have multiple partners, but there must be at least one general partner present. The notion that all partners are equal in responsibility is contrary to the essential characteristics of a limited partnership, where the general partner has greater obligations and liabilities. Furthermore, limited partnerships do indeed have limited partners, who play a crucial role in the structure, and there is no requirement for a specific minimum number of partners beyond the one general partner that