General partner (GP)
What is a general partner?
A general partnership is an arranged between parties who jointly have unlimited liability. A general partner is a member in such a partnership and who has a hands-on role in managing the business day to day. They have personal responsibility for business debts if the business can't pay its liabilities.
Where have you heard about general partners?
If you have set up business with at least one other person, you will probably have considered becoming a general partner and creating a partnership agreement to confirm the details of your relationship, such as doctors setting up a practice together.
What you need to know about general partners.
General partners usually bring specialised knowledge to the partnership, and the partners will shares contacts. Business development and growth is something that the partners can all work on as they share management responsibilities.
A general partner can act on behalf of the whole business, even without other partners' say-so. But they may be held jointly liable with the other partners and their personal assets liquefied, if the business has financial obligations that it cannot meet. This is called unlimited liability.
General partners are also liable for the partnership's legal obligations including personal injury cases.
Business profits and losses are shared equally between the partners, unless the partnership agreement states otherwise.