What characterizes a limited partnership?

A limited partnership is specifically characterized by its structure, which includes both general and limited partners. General partners have management authority and bear unlimited liability for the debts and obligations of the partnership, while limited partners contribute capital and have their liability restricted to their investment in the partnership. This unique combination allows for a more flexible operation, where limited partners can invest without being involved in the day-to-day management or facing personal financial risk beyond their initial investment.

In contrast, options that suggest all partners have equal management rights or require unanimous agreement for decisions do not align with the framework of a limited partnership, as such arrangements typically grant management control primarily or solely to general partners. Similarly, the notion that only one partner is liable for the debts misrepresents the liability structure, as both partner types play critical roles, but only general partners carry full liability for the partnership's obligations. Therefore, the presence of both general and limited partners is the defining feature of limited partnerships.