Question:
What is meant by "Unlimited liability of a partner"?
What is meant by "Unlimited liability of a partner"?
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Unlimited liability in partnerships emphasizes the importance of careful decision-making and monitoring financial risks, as personal assets can be at stake.
Updated On: Nov 5, 2025
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Solution and Explanation
Unlimited liability of a partner means that if the partnership firm's assets are insufficient to pay off its debts, the partners are personally liable to cover the shortfall. This liability extends to their personal assets, ensuring that creditors can recover their dues even if the firm's resources are inadequate.
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