Liability in a General Partnership

The video tutorial explains the concept of general partnerships, focusing on the shared liability among general partners. It highlights the financial risks involved, especially when the business lacks sufficient assets to cover judgments. The tutorial also discusses the potential personal liability of partners, including the risk to personal assets. Additionally, it covers the risks associated with employee actions, such as accidents, which could lead to the partners being liable for damages.

What is a key characteristic of liability in a general partnership?

• Only the managing partner is liable.

• Liability is shared equally among all general partners.

• Only the partnership entity is liable.

• Liability is limited to the amount invested.

If a general partnership is sued for more than its assets, what can happen?

• The partners can declare bankruptcy.

• The partners are not affected personally.

• The lawsuit is automatically dismissed.

• The general partners may be personally liable for the excess amount.

How can a general partner recover a portion of a judgment paid?

• By negotiating with the creditor.

• By increasing their investment in the partnership.

• By collecting a percentage from other general partners.

• By suing the other partners.

What is a significant risk for general partners regarding employees?

• Employees can dissolve the partnership.

• Employees can take over the partnership.

• Partners can be liable for damages caused by employees.

• Employees can sue the partners directly.

What happens if a company vehicle driven by an employee causes an accident?

• The accident is ignored if minor.

• Only the employee is liable.

• The company and general partners could be liable.

• The vehicle insurance covers all damages.