A limited partnership provides protection against personal liability for its investors who are limited partners, but exposes its general partners to full liability for debts and lawsuits.
The general partners control the firm and have authority to bind each other in contracts. The limited partners are like shareholders in a corporation, such that their maximum liability is no more than their investment. The partnership agreement defines how dividends are distributed to the limited partners.
Only limited liability partnerships confer limited liability on all the partners.
Noted that limited partnerships (LPs) must also explicitly disclose their "LP" status when dealing with others.
The limited partners can lose their liability protection if they begin to manage or control the firm as though they were general partners.