In a general partnership, what is the liability of the partners?

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Multiple Choice

In a general partnership, what is the liability of the partners?

In a general partnership, partners bear personal responsibility for the debts and obligations of the business. There’s no liability shield, so each partner is personally liable, and the liability is unlimited. Creditors can pursue any partner for the full amount, and that partner may then seek contribution from the others. This is known as joint and several liability. Only after the partnership’s assets are exhausted would personal assets be at risk, and partners can later pursue one another for their shares of the debt. This differs from limited liability arrangements where owners aren’t personally on the hook for the business’s debts.

In a general partnership, partners bear personal responsibility for the debts and obligations of the business. There’s no liability shield, so each partner is personally liable, and the liability is unlimited. Creditors can pursue any partner for the full amount, and that partner may then seek contribution from the others. This is known as joint and several liability. Only after the partnership’s assets are exhausted would personal assets be at risk, and partners can later pursue one another for their shares of the debt. This differs from limited liability arrangements where owners aren’t personally on the hook for the business’s debts.

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