Which form of partnership provides partners with limited liability based on their investment?

A limited partnership is designed to offer different levels of liability and involvement among its partners. In such a partnership, there are two types of partners: general partners and limited partners. General partners manage the business and are personally liable for its debts and obligations, while limited partners contribute capital and share in the profits but are not involved in the daily operations of the business.

The key feature of the limited partnership structure is that limited partners enjoy limited liability protection, which means they are only liable for the partnership's debts up to the amount of their investment. This structure encourages investors to participate in business ventures without taking on the same level of personal risk as general partners.

The other options do not provide a similar arrangement of liability. In a general partnership, all partners have unlimited liability, meaning they are fully accountable for all debts and obligations of the partnership. A sole proprietorship is owned and operated by a single individual who maintains full personal liability without any limits. A joint venture, while it can share risks and profits, does not provide the specific limited liability structure that defines limited partnerships.

Thus, the limited partnership is the correct answer because it uniquely allows for partners to limit their liability based on their investment in the business.