general partnership
- A type of business agreement where all partners share equal responsibility for the company's debts and obligations, irrespective of how much capital each partner contributes
- In a general partnership, even if a partner contributed a small amount of capital, they would be fully responsible for the company's debts.
- They formed a general partnership, understanding each one of them is expected to share equally in the firm's debts, no matter how much individual investment they made.
- When starting a business as a general partnership, every partner should be aware that they can be held entirely accountable for all the financial liabilities incurred, regardless of their personal capital input.
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