What describes a General Partnership?

• A. Two or more people/entities each of which is legally liable for business
• B. A single owner with limited liability
• C. It is always a corporation
• D. It has no tax reporting requirements

Answer: (A)

In a general partnership, two or more people or entities own and operate the business, and each partner is legally liable for the partnership’s debts and obligations. That means personal liability is shared among the partners, often with joint and several liability, so creditors can pursue any partner for the full amount owed.

This description best captures the core feature that distinguishes a general partnership from other business forms: multiple owners with personal liability for the business.

Why the other statements don’t fit: a single owner with limited liability describes a sole proprietorship (or an entity like an LLC with limited liability), not a general partnership. A general partnership is not a corporation. And partnerships do have tax reporting requirements—they file an informational return and pass through income to partners’ tax returns, rather than having no tax reporting at all.