Which statement correctly reflects the liability of partners in a general partnership?

Which statement correctly reflects the liability of partners in a general partnership?

• A. Owners have unlimited liability that is joint and several
• B. Owners have limited liability to their investment
• C. Liability is limited to the assets of the partnership
• D. No liability exists

Answer: (A)

In a general partnership, partners bear unlimited personal liability for the partnership’s debts and obligations. That liability is joint and several, meaning creditors can pursue any one partner for the full amount or all partners together, and the partners who pay the full amount can seek reimbursement from the others. This reflects that partners act as agents of the partnership, and actions or debts incurred by the business bind all partners. Because there’s no separate liability shield, personal assets can be at risk if the partnership’s assets aren’t enough to cover the obligations. This contrasts with structures that offer limited liability, such as corporations or limited partnerships, where individual partners’ personal assets aren’t automatically at risk for business debts.

In a general partnership, partners bear unlimited personal liability for the partnership’s debts and obligations. That liability is joint and several, meaning creditors can pursue any one partner for the full amount or all partners together, and the partners who pay the full amount can seek reimbursement from the others. This reflects that partners act as agents of the partnership, and actions or debts incurred by the business bind all partners. Because there’s no separate liability shield, personal assets can be at risk if the partnership’s assets aren’t enough to cover the obligations. This contrasts with structures that offer limited liability, such as corporations or limited partnerships, where individual partners’ personal assets aren’t automatically at risk for business debts.