Who manages the business and is financially liable within a general partnership?

In a general partnership, the individuals who manage the business and carry the financial liability are known as general partners. These partners have the authority to make decisions regarding the operation of the partnership and are fully accountable for the debts and obligations of the business. This means that if the partnership faces any financial challenges or legal issues, general partners are personally liable, which could put their personal assets at risk.

Limited partners, in contrast, typically provide capital to the partnership but do not participate in day-to-day management, limiting their liability to the extent of their investment. Stockholders are associated with corporations, not partnerships, and their liability is limited to the amount they invested in shares. Directors are involved in the governance of a corporation and do not participate in the management of a partnership. These distinctions are critical in understanding the roles and responsibilities within different business structures.