In the context of partnerships, which statement is true regarding limited partners?

Limited partners play a unique role in the structure of partnerships, particularly in limited partnerships where there are both general and limited partners. The statement regarding limited partners being only liable for the amount they have invested is true and reflects the key characteristic that defines a limited partner's status.

In a limited partnership, limited partners contribute capital to the business but do not engage in day-to-day management or operations. Their liability is restricted to their investment in the partnership; this means they cannot lose more than what they contributed, protecting their personal assets from the partnership's debts and obligations. This limited liability is a significant reason why individuals may choose to become limited partners, as it allows them to avoid the risks associated with unlimited liability that general partners face.

Understanding the role of limited partners is essential, especially when assessing the balance of risk and control within a partnership. Their limited liability encourages investment while safeguarding personal resources, defining the approach and functioning of businesses structured as limited partnerships.