Which type of partnership allows for both general and limited partners?

A limited partnership is specifically designed to accommodate both general and limited partners. In this structure, general partners manage the business and have unlimited liability for its debts and obligations. In contrast, limited partners contribute capital but have limited liability, meaning their personal assets are protected from business debts beyond their investment in the partnership. This arrangement allows for a blend of active management by general partners and passive investment by limited partners, making it attractive for those who wish to invest without being actively involved in the day-to-day operations.

In contrast, a sole proprietorship is owned and operated by a single individual, thereby excluding any concept of partnership. A general partnership consists solely of partners who share management responsibilities and liabilities equally, without the distinction of limited partners. A cooperative partnership typically focuses on member benefits and shared resources rather than the limited and general structure found in a limited partnership. Thus, the limited partnership stands out as the correct choice in this context.