What happens to the personal liability of partners in a partnership?

In a partnership, partners share personal liability for the debts and obligations of the business. The principle of joint and several liability means that each partner can be held individually responsible for the full amount of the partnership's debts, as well as collectively responsible with the other partners. This means that a creditor can pursue any one partner for the entire debt, regardless of the specific contributions or shares of investment each partner has in the partnership. This characteristic of partnership law ensures that creditors have access to the full resources of all partners, not just a single partner’s share.

This form of liability highlights the importance of trust and shared responsibility among partners, as each partner’s financial situation can impact the others. In contrast to limited liability entities, partnerships expose each partner to more significant financial risk, making it essential for partners to understand their potential personal exposure when entering into a partnership agreement.