What is the key feature of a limited partnership?

In a limited partnership, the key feature is that only one partner, typically referred to as the general partner, has unlimited liability for the debts and obligations of the business. This general partner is responsible for the management of the business and faces personal risk if the business incurs debts beyond its assets. The other partners, known as limited partners, contribute capital and share in the profits but their liability is limited to their investment in the partnership. This structure allows investors to participate in the business without risking personal assets beyond their initial contribution, which can be a compelling reason for individuals to become limited partners.

The other options do not accurately describe the nature of a limited partnership. In particular, unlimited liability for all partners does not apply, as in other forms of partnerships, such as a general partnership, where all partners share that risk. Additionally, the ability of partners to alter agreements is not restricted solely to limited partnerships, as agreements can generally be amended if all partners agree. Lastly, the notion that limited partnerships are restricted to small businesses is a misconception; while they often are found in smaller enterprises, they can be used by larger entities as well.