In which type of partnership is liability limited to the amount invested?

In a limited partnership, one or more partners have limited liability, which means their financial responsibility for the debts and obligations of the partnership is limited to the amount they have invested in the business. This structure offers a protective feature for limited partners, as they are not personally liable for the debts beyond their investment, unlike general partners, who have unlimited liability and are fully responsible for the partnership's debts.

This arrangement encourages investors to contribute capital to a business without the risk of losing more than their investment. It allows individuals to partake in business ventures while protecting their personal assets. In contrast, sole proprietorships and general partnerships do not provide this kind of liability limitation, which exposes their owners and partners to greater risk. Therefore, the defining characteristic of a limited partnership is the limited liability afforded to those partners, making it the correct answer for this question.