A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

Question

Business

Jaxon Thomas

13 May, 11:31

A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

+5

Answers (1)

Know the Answer?

Saniyah Mahoney · Answer 1

Answer: Yes it is true that A general partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.

Explanation:

In the case of the general partnership, all the partners have unlimited liability and the same authority. Here the term unlimited liability means that they are personally responsible for the debts of the firm. It means their personal properties like their cars, houses, etc will also be taken into consideration for paying back the debts. So whether the partner was involved directly or not in any debt transaction he will be liable for it.

There is an equal distribution of authority in general partnership. So this type of partnership is possible only in the case of small organizations but not in case big concerns.