What is a 'General Partnership'

A general partnership is an arrangement by which partners conducting a business jointly have unlimited liability, which means their personal assets are liable to the partnership's obligations.

BREAKING DOWN 'General Partnership'

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.

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RELATED FAQS
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    Learn the differences between general partnerships and limited liability partnerships; each type has unique traits, benefits ... Read Answer >>
  2. Can I buy insurance to reduce unlimited liability in a partnership?

    Find out why it is important to safeguard your general partnership in the even that one member becomes disabled, dismembered ... Read Answer >>
  3. What is the difference between a silent partner and a general partner?

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    Read about some of the important differences between general partnerships, limited partnerships and joint venture arrangements ... Read Answer >>
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