(b) That's wrong. Just as partners in a general partnership are entitled to a share of the firm's capital and profits, so too they are liable for the firm's debts and other obligations that are incurred while they are a partner. The liability is described as joint, meaning that each partner is liable for the debt.

These debts are normally paid out of the partnership assets, and if the partnership is trading successfully, these will be sufficient. However, if there are insufficient partnership assets to pay the debts, then the individual partners must contribute further assets of their own towards the payment of these debts. The extent to which each partner must contribute depends on what they have agreed, failing which, they must contribute equally.

The personal liability of partners to contribute to business losses when these losses exceed the partnership assets is a major risk. It means that, even if a partner has agreed initially only to contribute some of their assets to the partnership, their remaining personal assets might also be lost if the business goes seriously wrong.

In Edward's case, for example, his family home would be potentially at risk.