Texas Real Estate Principles 1 Practice Test 2026 - Free Real Estate Practice Questions and Study Guide

The correct choice identifies limited partners as individuals who contribute capital to a partnership but do not participate in the day-to-day management or operations of the business. This structure offers a level of protection to their personal assets since their liability is usually limited to the amount they invested in the partnership.

Limited partners primarily invest in the business with the understanding that they will not take part in decision-making processes. This allows them to benefit financially from the partnership without the risks associated with active management. Their role is to provide financial support and, in return, they typically receive a share of the profits.

While general partners manage the business and are fully liable for its debts, limited partners enjoy the benefits of limited liability. Silent partners, while similar in that they do not take part in management, can sometimes be active in specific areas or have a different level of investment involvement, which can blur the distinction. Therefore, the characteristic of limited partners, particularly their limited say in operations while still providing capital, clearly identifies them as the correct answer.