Which factor best describes the maximum exposure of a limited partner under typical LP arrangements if a claim arises?

Which factor best describes the maximum exposure of a limited partner under typical LP arrangements if a claim arises?

• A. $0
• B. $100,000
• C. $1,000,000
• D. Unlimited

Answer: (B)

Limited partners have liability limited to their invested capital, so their maximum exposure is the amount they have contributed to the partnership. In this scenario, that amount is 100,000, which is the most they could be on the hook for if a claim arises. The other figures don’t fit because zero would ignore the capital already invested, a larger amount would exceed their investment, and unlimited would contradict the principle of limited liability that protects LPs.

Limited partners have liability limited to their invested capital, so their maximum exposure is the amount they have contributed to the partnership. In this scenario, that amount is 100,000, which is the most they could be on the hook for if a claim arises. The other figures don’t fit because zero would ignore the capital already invested, a larger amount would exceed their investment, and unlimited would contradict the principle of limited liability that protects LPs.