Search Legal Terms and Definitions

n. 1) usually one of the owners and operators of a partnership, which is a joint business entered into for profit, in which responsibility for management, profits and, most importantly, the liability for debts is shared by the general partners. Anyone entering into a general partnership (the most common business organization involving more than one owner) must remember that each general partner is liable for all the debts of the partnership. Furthermore, any partner alone can bind the partnership on contracts. Example: Joe Doright and Sam Sleazeball are partners in a retail store. Sleazeball runs up a large American Express card bill in the name of the company while on a toot in Las Vegas, contracts for purchase of $30,000 worth of dresses which are out of fashion, and then takes off with a girlfriend for Tahiti. Doright is responsible for the entire debt. 2) in the 40 states which recognize limited partnerships, the managing partner or partners operate the partnership and are liable for its debts beyond the value of the investments by limited partners. The general partners usually receive a management fee and share in profits. Limited partners are prohibited by law from participating in management, can lose more than their investments, and get less than the general partners from unusually high profits.