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LSDefine

Simple English definitions for legal terms

general partner

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A quick definition of general partner:

A general partner is a person who is part of a business with one or more other people. They share the profits and are responsible for any losses. General partners can use their own money to finance the business and can take their money out at any time by ending the partnership. Each partner has the power to make decisions for the business, but they can also be held responsible for any mistakes made by other partners. If a partner does something wrong and causes a problem for someone outside of the partnership, the whole partnership is responsible. However, if someone knows that a partner doesn't have the power to make a decision and they go ahead and do it anyway, the partnership isn't responsible.

A more thorough explanation:

A general partner is a person who is part of a business with one or more other people. The purpose of the business is to make a profit, and this creates a general partnership. General partners have unlimited personal liability, which means they can be held responsible for the actions of other general partners. They use their own personal resources to finance the partnership, which makes it easy for them to get money. They can also withdraw their investment at any time by ending the partnership.

Each general partner has the power to make decisions for the partnership. For example, they can buy things that the partnership needs for its business. All general partners have equal control and voting power, but they can change this if they want to.

If one general partner does something wrong during the normal course of business, the other partners can be held responsible for it. This means that if the partnership has to pay a penalty or loses money because of one partner's mistake, all the partners are responsible for paying it back. However, if the partner who made the mistake didn't have the authority to make that decision, and the other person knew that, then the partnership isn't responsible for it.

John and Jane are general partners in a bakery. They both put in money to start the business, and they both make decisions about what to sell and how to run the bakery. One day, John accidentally puts too much salt in the bread dough, and all the bread tastes terrible. The bakery has to throw away all the bread and loses a lot of money. Because John is a general partner, Jane is also responsible for paying back the money the bakery lost. However, if John had made the bread without Jane's knowledge and she didn't give him permission to do it, then she wouldn't be responsible for the loss.

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