General Partner Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of General Partner, written in plain English, along with examples of how it is used.
What is General Partner?
(n) General Partner is the person who has agreed or entered in to an agreement to share the liabilities or debts owned by the partnership firm.
History and Definition of General Partner
A general partner is a person who enters into a partnership with one or more persons to carry on a business as co-owners, with the intent of making a profit. In this partnership, each partner shares in the management of the business and is personally liable for the partnership's obligations. The general partner takes an active role in the business, and as such, is responsible for its debts and liabilities.
General partnerships have existed for centuries, with records of them dating back to Ancient Rome. Throughout history, general partnerships have been used to enable individuals to share resources and take on risks together, allowing them to undertake ambitious ventures that would be impossible for a single person to accomplish alone.
Examples of General Partner
- Two lawyers decide to create a law firm together as general partners. They each contribute time and money to the partnership, and share the profits and losses equally. They are both liable for the debts and liabilities of the firm.
- A group of investors form a limited partnership to invest in a real estate development project. One investor is the general partner, responsible for managing the project and making day-to-day decisions. The other investors are limited partners, who do not participate in the management of the project and whose liability is limited to their investment.
- A family partnership is formed to run a small business, with the siblings as general partners. Each sibling contributes to the business, and they share the profits and losses equally. If the business were to incur any debts or liabilities, each sibling would be personally liable.
Legal Terms Similar to General Partner
- Limited Partnership: A partnership where there is one or more general partners who are personally liable for the partnership's debts and one or more limited partners whose liability is limited to their investment.
- Joint Venture: A business relationship between two or more parties who agree to combine resources for a specific project or limited period of time.
- Sole Proprietorship: A business structure where the individual owner is personally liable for the debts and obligations of the business.