Final answer:
The statement 'All partners are personally liable for all the partnership debts' is false for limited partnerships,
where limited partners' liabilities are confined to their investment in the business, as opposed to general partnerships where all partners are fully liable for debts.
Step-by-step explanation:
All of the following are true for both general and limited partnerships, except: c. All partners are personally liable for all the partnership debts.
In fact, one of the main distinctions between a general partnership and a limited partnership is the degree of liability that partners are subject to
In a general partnership, partners share equal responsibility for the business and are jointly and severally liable for the partnership's debts, which can include losing personal assets in bankruptcy or lawsuits.
However, in a limited partnership, general partners manage the business and are fully liable, while limited partners, often known as silent partners, have liability only up to the amount they invested, thus protecting their personal assets beyond that investment.
Both business structures allow partners to share in the profitability of the business and can benefit from complementary skills in management.
They are both subject to fewer regulations compared to corporations, but the risk of personal asset loss is mitigated in a limited partnership.