In a limited partnership, under what condition could a limited partner lose her limited liability?

In a limited partnership, limited partners are primarily investors who enjoy limited liability protection, meaning they are not personally responsible for the debts and obligations of the partnership beyond their investment. However, this protection can be jeopardized under certain circumstances that expose them to the same liabilities as general partners.

A limited partner could lose her limited liability if she becomes too involved in the management of the partnership. Specifically, if she assists in making decisions regarding the operations or the acquisition of properties, this level of involvement can classify her as a general partner in the eyes of the law. When a limited partner takes on roles typically reserved for general partners, such as making strategic business decisions or managing daily operations, it is seen as stepping outside the bounds of her limited role and thus jeopardizes her liability protection.

In contrast, investing more than the minimum requirement or withdrawing her investment do not directly impact her limited liability status as long as she does not engage in controlling aspects of the partnership's operations.