Who manages a limited partnership (LP)?

In a limited partnership (LP), the management and control are typically vested in the general partner(s). General partners play an active role in the day-to-day operations of the partnership and have the authority to manage the business, make decisions, and enter into contracts on behalf of the partnership.

Limited partners, on the other hand, are primarily investors who contribute capital to the partnership but do not participate in its management. Their liability is limited to the extent of their investment, which is one of the features that distinguish them from general partners. Because limited partners do not have the authority to manage the LP, any involvement in management could potentially expose them to greater liability, which contradicts the principle of limited liability that they seek.

This distinction is critical in understanding the structure and function of limited partnerships. In essence, the general partner(s) are responsible for the management, while limited partners provide financial backing without getting involved in the operational aspects of the business. Thus, the correct answer reflects the inherent roles and responsibilities defined within the legal framework governing limited partnerships.