In a general partnership, are all partners liable for the entire debt of the company regardless of ownership percentage?

In a general partnership, all partners are not liable for the entire debt of the company strictly in proportion to their ownership percentage. Instead, partners share joint and several liability for the obligations of the partnership. This means that each partner is personally liable for the entire amount of the partnership's debts, which can create significant financial risk.

While partners may agree to allocate profits and losses in specific percentages based on their ownership or contributions, in the eyes of the law, any partner can be held responsible for all debts incurred by the partnership. This principle underscores the importance of trust and communication among partners because one partner's mismanagement can lead to financial consequences impacting all partners, regardless of their ownership percentage or level of involvement in the business decisions.

The other options can be seen in context: some may suggest that liability is limited to certain debts or is contingent on when a partner joins, but the fundamental structure of a general partnership dictates that all partners bear full responsibility for the debts, making it essential for each partner to be aware of the financial obligations of the partnership.