Final answer:
Limited partners in a limited liability partnership are not personally liable for partnership debts beyond their investment, unlike general partners who have unlimited personal liability.
Step-by-step explanation:
Limited partners typically do not have personal liability for partnership obligations in a limited liability partnership (LLP). In an LLP, the liability of limited partners is restricted to their investment in the business, protecting personal assets like homes, cars, and personal bank accounts from business failures or lawsuits.
Unlike a general partnership, where each partner is personally liable for all the business's debts, which may involve the loss of personal assets, a limited partnership offers protection.
However, in a general partnership, not only are profits shared among partners, but there is also shared personal liability. This means each partner is liable for the actions of the others, and the departure or death of one partner can dissolve the partnership.
This differs from the structure of a corporation where shareholder liability is limited to their invested capital, and the business can continue irrespective of changes in the shareholders.
A limited partnership thus offers the benefit of sharing in the profits without the risk of unlimited personal liability, providing a safeguard for silent partners and those who prefer not to be involved in the day-to-day operation of the business.