How is the liability of a limited partner defined?

A limited partner's liability is specifically defined as being limited to the amount they invest in the partnership. This means that if the business incurs debt or faces legal action, a limited partner's financial responsibility is capped at their initial investment in the partnership. They do not have the same level of liability as general partners, who can be held personally liable for business debts beyond their investment. This structure allows for a more secure investment environment for limited partners, encouraging individuals to invest without the risk of losing personal assets.

The other definitions present liabilities that do not accurately reflect the unique status of limited partners. Unlimited liability and personal liability are more applicable to general partners, while liability for operational failures may not be a direct concern for limited partners unless they engage in management activities that could compromise their limited status.