Which type of partnership allows one or more partners to be passive investors?

In a limited partnership, there is a distinction between general partners and limited partners. General partners manage the day-to-day operations of the business and have full liability for the partnership's debts and obligations. In contrast, limited partners are typically passive investors who contribute capital to the partnership but do not have any role in managing the business. Their liability is limited to the amount of their investment. This structure allows limited partners to invest in a venture while minimizing personal risk, making it an attractive option for those seeking to invest without being involved in management.

The other options do not provide for passive investment in the same way. A general partnership requires all partners to actively participate in management and share liability. A joint venture typically involves a temporary partnership for a specific project where all parties are usually active participants. A sole proprietorship has only one owner who is fully responsible for all aspects of the business, making it impossible for passive investment in that structure.