General partnership definition. Analyzing the definition of key term often provides more insight about concepts. General partnersip can be defined as: Partnership in which all partners have mutual agency and unlimited liability for a partnership’s debts. Like a sole proprietorship a general partnership is easy to form but also comes with the cost of liability exposer to the individual partners. A general partnership also need to be careful about the fact that they both partners have agency over the assets and liabilities of the partnership, an ability to make contracts and agreements on behalf of the partnership. The creating of a contract by one partner can obligate the other partner. If a limited partner is added to the partnership the partnership changes from a general partnership to another form.
