Which type of partner in a limited partnership has limited liability?

In a limited partnership, the type of partner that has limited liability is the limited partner. A limited partner's liability is typically restricted to the amount they have invested in the partnership, offering them protection from being personally liable for the debts and obligations of the partnership beyond their investment. This characteristic makes limited partners attractive for investors who wish to contribute capital without risking their personal assets.

In contrast, general partners assume full responsibility for managing the partnership and have unlimited liability, meaning that they can be held personally liable for the partnership's debts. The managing partner designation refers to individuals who actively manage the business, which typically correlates with the role of a general partner, thus sharing that unlimited liability. A sole proprietor, while operating a business independently, does not enjoy limited liability and is personally liable for all business debts.

Understanding the roles and liabilities within partnerships is essential for real estate professionals, as it influences investment strategies, risk management, and how partnerships are structured.