Final answer:
In a partnership liquidation with no capital deficiency, all liabilities can be covered and each partner can get back their initial investment, protecting personal assets in a limited liability partnership.
Step-by-step explanation:
When a partnership is undergoing liquidation, and it is stated that there is 'no capital deficiency,' this means that the assets of the partnership are sufficient to cover all the liabilities of the business, as well as to return the full amount of capital initially invested by each partner. In other words, after selling off all assets and paying off all debts, each partner will receive back at least their initial capital contribution. In a limited liability partnership, this situation is especially significant because it means that the partners' personal assets are protected and they are not at risk of loss beyond their investment into the partnership.