What distinguishes a Limited Partnership from a General Partnership?

A Limited Partnership is characterized by its structure, where at least one partner must act as a general partner, who manages the business and bears full liability for the partnership's debts. The other partners, known as limited partners, primarily contribute capital and are usually investors who have limited liability, meaning they are only liable for the debts of the partnership up to the amount of their investment. This distinction allows limited partners to benefit from the business without being involved in its day-to-day operations or being exposed to unlimited personal liability.

The remaining options do not capture the essence of what makes a Limited Partnership different from a General Partnership. In a General Partnership, all partners are general partners, sharing equal responsibility for management and liability. Sharing profits unevenly can occur in any partnership structure depending on the partnership agreement, but it is not a defining characteristic of Limited Partnerships. Finally, the statement that it does not involve any investments is inaccurate, as Limited Partnerships are typically formed exactly to pool investments from the limited partners.