In a traditional partnership, what describes liability for debts and obligations?

• A. Each partner has unlimited personal liability; contractual debts are jointly liable; tort liability is joint and severable.
• B. Each partner has limited liability proportional to capital contribution.
• C. The partnership bears all liability with no personal liability for partners.
• D. Partners are liable only for negligence, not for other debts.

Answer: (A)

In a traditional general partnership, partners have unlimited personal liability for the debts and obligations of the partnership. This means creditors can pursue each partner’s personal assets to satisfy the partnership’s debts. For contractual debts, liability is joint and several, so a creditor can sue any one partner for the full amount and then seek contribution from the others. For torts, liability is also typically joint and severable (joint and several), so a partner can be liable for the full damages arising from the partnership’s activities or from the actions of other partners in the course of the business. This description best captures how liability operates in a traditional partnership.

The other options don’t fit: liability isn’t limited to a partner’s capital contribution, and partners aren’t insulated from personal liability in a general partnership; nor is the partnership itself solely liable with no personal liability, or liability limited to negligence alone.