Which statement is true about liability to third parties for acts in the ordinary course of business in a general partnership?

Which statement is true about liability to third parties for acts in the ordinary course of business in a general partnership?

• A. All partners are liable jointly and severally for acts in the ordinary course of business, with partnership assets first, then personal assets.
• B. Only general partners are liable; limited partners are exempt.
• C. The partnership is liable, and partners have no personal liability.
• D. Creditors have priority over partnership assets.

Answer: (A)

In a general partnership, partners have joint and several liability for acts done in the ordinary course of business. This means a third party can sue the partnership as an entity or pursue any one partner for the full amount of a partnership obligation or tort. The partnership’s assets are used first to satisfy the claim; if those assets aren’t enough, the creditor can go after the personal assets of any partner to cover the remaining debt. This setup keeps each partner personally responsible for the partnership’s obligations, reflecting the shared involvement and authority typical in a general partnership. The other statements don’t fit because partners do have personal liability, and there isn’t a separate limited-partner structure in a general partnership; also, creditors don’t have priority over partnership assets—the partnership’s assets must be exhausted first before touching personal assets.

In a general partnership, partners have joint and several liability for acts done in the ordinary course of business. This means a third party can sue the partnership as an entity or pursue any one partner for the full amount of a partnership obligation or tort. The partnership’s assets are used first to satisfy the claim; if those assets aren’t enough, the creditor can go after the personal assets of any partner to cover the remaining debt. This setup keeps each partner personally responsible for the partnership’s obligations, reflecting the shared involvement and authority typical in a general partnership. The other statements don’t fit because partners do have personal liability, and there isn’t a separate limited-partner structure in a general partnership; also, creditors don’t have priority over partnership assets—the partnership’s assets must be exhausted first before touching personal assets.