In a traditional partnership in some ways they face the same risk as a sole proprietorship – full liability for the actions of the owners. In the case of the partnership it is “joint and separate liability”, so a partner is potentially liable for all the actions of all partners. For an individual partner the risk is probably higher in a partnership as they are reliant on the actions of the other partners. This is especially the case if one of the partners has a higher “propensity to risk”. There are business structures like limited liability partnerships available in some countries that reduce the risk of partners and of course limited liability companies.
Lew
Lead developer of Business Plan Quick Builder and BizzLink
Notes
- Inspired by our response to Quora question
- Photo by Cytonn Photography
