If a limited partner spent more than 500 hours in the company,he/she will be treated as general partner and will lose their limited liability protection.

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This is known as the "safe harbor rule" under the Internal Revenue Code. If a limited partner exceeds the 500 hour threshold, they are considered to be actively participating in the business and can be treated as a general partner, losing their limited liability protection.

If a Limited Partner Spent More Than 500 Hours in the Company,he/she