What is the liability status of limited partners in a limited partnership?

In a limited partnership, the liability status of limited partners is characterized by their protection from personal liability beyond their investment in the partnership. This means that they are not personally responsible for the debts and obligations of the partnership. Their financial risk is limited to the amount they have invested in the business. This structure encourages investors to participate without risking their personal assets.

Limited partners typically do not partake in the day-to-day operations or management of the business, which helps maintain their limited liability. If they were to take on more active roles, they could potentially lose this protection and be held liable for additional debts of the partnership. Therefore, the correct answer reflects the fundamental principle of limited liability for limited partners in a limited partnership arrangement.