What is the maximum liability for a limited partner in a limited partnership?

In a limited partnership, a limited partner's liability is generally capped at their initial investment in the partnership plus any unpaid amounts they have committed to contribute. This means that if the partnership incurs debts or obligations, the limited partner is only responsible for the amount they initially invested and any additional financial commitments that they have not yet fulfilled, which would typically relate to capital contributions agreed to in the partnership agreement.

This maximum liability structure is designed to protect limited partners, who typically have a hands-off role in the management of the business, from being held personally liable for the debts of the partnership beyond their investment. This distinct characteristic is what creates the appeal of a limited partnership structure for investors who want to limit their risk while still participating in the potential profitability of the venture.

In contrast, choices that suggest unlimited liability, or liability strictly confined to contributions, do not accurately reflect the legal protections afforded to limited partners. Limited partners benefit from having their risk restricted in this way, making option C the most accurate representation of their maximum liability in a limited partnership context.