The
Definition Of

Unlimited liability

Each partner is personally and individually liable for all partnership liabilities. Creditor’s claims attach first to partnership assets. If these are insufficient, the claims then attach to the personal resources of any partner, irrespective of that partner’s equity in the partnership. Because each partner is responsible for all the debts of the partnership, each partner is said to have unlimited liability.

Share it:

More from this Section

  • Times interest earned
    Times interest earned provides an indication of the company’s ability to meet interest payments as they come due; computed by dividing income before interest...
  • Just-in-time (JIT) inventory
    Just-in-time (JIT) inventory is a inventory system in which goods are manufactured or purchased just in time for use.
  • Footing & cross-footing
    Totaling the columns of a journal and proving the equality of the totals is called footing and cross-footing a journal.
  • Inventory Systems
    A merchandising company keeps track of its inventory to determine what is available for sales and what has been sold. Companies use one of two systems to account for inventory...
  • Current liability
    A current liability is a debt that a company can reasonably expect to pay (1) from existing current assets or through the creation of other current liabilities...
  • Direct labor variance or total labor variance
    The direct labor variance or total labor variance is the difference between the actual hours times the actual rate and the standard hours times the standard rate for labor.
  • Direct material quantity standard
    The direct material quantity standard is the quantity of direct materials that should be used per unit of finished goods. This standard is expressed as a physical measure...