How does a limited partnership typically involve investors?

In a limited partnership, investors typically fall into two categories: general partners and limited partners. General partners are responsible for the active management of the business and have unlimited liability for debts and obligations. In contrast, limited partners are primarily investors who contribute capital to the partnership but do not participate in the day-to-day management or decision-making processes. This structure allows limited partners to enjoy the benefits of investment returns while limiting their personal liability to the amount of their investment.

Because limited partners have no say in the management of the business, this makes them passive investors. They trust the general partners to run the business effectively without involving them in operational decisions. This essential characteristic of limited partnerships aligns with the statement that passive investors have no say in the business, highlighting the distinct roles within this business structure.