What is a true statement about partnerships?

In a partnership, one of the defining characteristics is the nature of liability. Partners can indeed be held personally liable for the debts of the partnership. This means that if the partnership cannot pay its debts, creditors have the right to pursue the personal assets of the partners for payment. This exposure to personal liability differentiates partnerships from other business structures, such as corporations, where shareholders typically enjoy limited liability.

Partnerships operate on the principle of shared responsibility, which encompasses both profits and losses. The liability of partners can also include obligations incurred by their fellow partners in the course of conducting partnership business, reinforcing the notion of joint and several liabilities.

This principle is a crucial aspect for individuals considering entering a partnership, as it highlights the importance of trust and mutual agreement among partners regarding financial obligations and potential risks associated with their business operations. Therefore, understanding the implications of personal liability is essential when evaluating the overall structure and risk associated with partnerships.