What is generally true about the liabilities of both general and limited partners?

In a partnership, general and limited partners have distinct roles and consequently different levels of liability. General partners have full personal liability for the debts and obligations of the partnership, meaning they can be held personally responsible beyond their initial contributions. This personal liability persists regardless of how much they invested in the business.

In contrast, limited partners typically have liability that is restricted to the amount of their investment in the partnership. They are not personally liable for the debts of the business beyond their contributions, provided they do not participate in managerial decisions, as their status relies on remaining passive investors.

This distinction in liability is essential, as it defines the level of risk each partner assumes in the business structure. Understanding these dynamics is crucial for anyone involved in or considering entering a partnership, particularly in the context of financing and operational decisions in agribusiness.