property
general partnership
A general partnership is a business owned by two or more people who share management, profits, and losses. Each general partner has unlimited personal liability for the partnership's debts and can usually bind the partnership in contracts. In many states a partnership may hold title to real estate in the partnership name. Profits generally pass through to the partners for tax purposes.
- Exam tip
- The tested contrast is liability: general partners have unlimited personal liability, while limited partners risk only their investment and do not manage.
- Example
- Three friends form a general partnership to buy a fourplex. When the partnership cannot pay a $90,000 contractor bill, the contractor can pursue any partner's personal assets.
Related terms & state variants
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Last verified: 2026-10-23