| a partnership in which each of the partners is fully liable for the firm's debts. |
| general partnership n. A partnership in which each of the partners is liable for all of the firm's debts, and the actions of one partner are binding on each of the other partners. |
General Partnership
A arrangement by which partners conducting a business jointly have unlimited liability, which means their personal assets are liable to the partnership's obligations.
Investopedia Commentary
Since all partners have unlimited liability, even innocent partners can be held responsible when another partner commits inappropriate or illegal actions. This fact alone demonstrates how an investor should heed caution when deciding on whether to become a general partner.
Related Links
The Basics Of Corporate Structure
Basic Investment Objectives
See also: Corporation, Joint Venture, Limited Liability, Limited Liability Company, Limited Risk, Master Limited Partnership, Silent Partner, Sole Proprietorship, Strategic Alliance
general partnership